Common use of Exceptions to Adjustment of Exercise Price Clause in Contracts

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b) in respect of Excluded Securities. “Excluded Securities” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Shares or exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted in the discretion of the Board of Directors, as approved by the Company independent members of the Board, pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Closing Date or approved by the independent members of the Board of Directors of or by the Company Company’s shareholders, or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarityy) consultants, the issuance of shares of either directly or pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Purchase Agreement, provided that such securities have not been amended since Board of Directors or by the date of the Purchase Agreement Company’s shareholders; (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend Convertible Securities or recapitalization of Purchase Rights outstanding on the Company (subject to Section 3(a) date hereof), ; and (eV) shares of Common Stock or other securities issued to Persons in connection with any registered a joint venture, strategic alliance or other commercial relationship with such Person relating to the operation of the Company’s business and not for the primary public offeringpurpose of raising equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted by the Board of Directors, the Company pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Closing Date or approved by the independent members of the Board of Directors or by the Company’s stockholders, or (y) consultants, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Company Board of Directors or a majority of by the members of a committee of non-employee directors established for such purpose Company’s stockholders; (for purposes of clarityIV) except as required by subparagraph (c)(ii)(E) above, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with any Convertible Securities or Purchase Rights outstanding on the Purchase Agreementdate hereof; (iiV) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which isin connection with a joint venture, itself strategic alliance or through its subsidiaries, an operating company in a business synergistic other commercial relationship with such Person relating to the business operation of the Company Company’s business and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, equity capital; and (dVI) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization respect to which the Holders consents that no such adjustment shall be made as a result of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringsuch issuance.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b) in respect of Excluded Securities. “Excluded Securities” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with under the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) and Section 4.14 of the Purchase Agreement hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (A) securities purchased under the issuance Securities Purchase Agreement; (B) securities issued upon conversion of the Preferred Shares or exercise of the Warrants; (aC) shares of Common Stock issuable or options issued to (x) employees, consultants, officers or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted by the Board of Directors or a committee thereof, the Company pursuant to any one or more stock option agreementplans, stock option plan incentive plans or equity incentive plan duly adopted restricted stock plans or stock purchase plans in effect as of the Closing Date or approved by the Board of Directors including a majority of the non-employee members Company's independent directors (as such term is defined under Rule 4200(a)(15) of the Nasdaq Market Rules), or (y) consultants or vendors pursuant to options or warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors Directors; provided, that in the case of any such options described in this clause (C) that are issued after the date hereof, only options exercisable for a maximum of 10% of the Company or a majority number of shares outstanding on the members of a committee of non-employee directors established for Closing Date shall be included as "Excluded Securities" (it being understood that such purpose (for purposes of clarity, number does not include any options the issuance of which is not a Dilutive Issuance); (D) except as required by paragraph (c)(ii)(E) above, shares of Common Stock upon exercise issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (E) shares of options granted pursuant Common Stock issued to a stock option agreementPerson in connection with a joint venture, stock option plan strategic alliance or equity incentive plan subsequent other commercial relationship with such Person relating to the date hereof shall also be Excluded Securities), operation of the Company's business and not for the purpose of raising equity capital; (bF) securities upon the exercise or exchange shares of or conversion of (i) any Securities Common Stock issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated acquisition by the Purchase Agreement; and/or (iii) Company of any corporation or other securities entity or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date substantially all of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price assets of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock corporation or other securities issued in connection with any stock split, stock dividend entity or recapitalization of division or business unit thereof occurring after the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringEffective Date.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means ------------------- (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Additional Investment Rights or the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VI) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof and (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Shares or exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted in the discretion of the Board of Directors, as approved by the Company independent members of the Board, pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Issue Date or subsequently approved by the independent members of the Board of Directors or by the Company's stockholders, or (y) consultants or vendors, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Company Board of Directors or a majority of by the members of a committee of non-employee directors established for such purpose Company's stockholders; (for purposes of clarityIV) except as required by subparagraph (c)(ii)(E) above, the issuance of shares of Common Stock upon exercise issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (V) shares of options granted pursuant Common Stock issued to a stock option agreementPerson in connection with a joint venture, stock option plan strategic alliance or equity incentive plan subsequent other commercial relationship with such Person relating to the date hereof shall also be Excluded Securities), operation of the Company's business and not for the purpose of raising equity capital; (bVI) securities upon the exercise or exchange shares of or conversion of (i) any Securities Common Stock issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated acquisition by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price Company of any such securitiescorporation or other entity (including, without limitation, the interests in certain limited partnerships of which the Company or a Subsidiary is a general partner); and (cVII) securities issued pursuant to acquisitions or strategic transactions approved a bona fide firm commitment underwritten public offering. For purposes hereof, approval by the independent members of the Board of Directors shall mean the approval of a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business independent members of the Company and in Board, which the Company receives benefits in addition to the investment of funds, but majority shall include not include a transaction in which the Company fewer than four (4) independent directors (as such term is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (ddefined under Rule 4200(a)(15) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereofNasdaq Market Rules), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities ------------------- purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants to, to be granted in the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Company Issue Date or adopted ----------------------- after the Issue Date by the Board of Directors (or a majority of duly authorized committee thereof) or by the members of a committee of non-employee directors established for such purpose Company's shareholders, or (for purposes of clarityy) vendors, the issuance of shares of either directly or pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since issuances are approved by the date Board of the Purchase Agreement Directors (other than on or a non-discretionary basis pursuant to the pre-existing anti-dilution provisions duly authorized committee thereof) to increase or by the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, Company's shareholders; (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company or other securities a Subsidiary of any Person --------------- or business not for the purpose or with the effect of raising equity capital; (VI) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof; (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital; and (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Board of Directors.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “Excluded Securities” For purposes hereof, "EXCLUDED SECURITIES" means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Additional Investment Rights or the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VI) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof and (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding No adjustment to the foregoing, no adjustment Exercise Price will be made (A) upon the exercise of any warrants, options or convertible securities issued and outstanding on the Issue Date and set forth on Schedule 3(d) of the Securities Purchase Agreement in accordance with the terms of such securities as of such date, except to the extent provided for pursuant to (v) above; (B) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under this Section 3(b) any employee benefit plan of the Company now existing or to be implemented in respect of Excluded Securities. “Excluded Securities” means the future, so long as the issuance of (a) shares of Common Stock such stock or options to employees, officers or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted is approved by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose purpose; (for purposes C) upon conversion of clarity, the Notes or exercise of the Warrants; (D) upon the issuance of shares Common Stock in connection with a subdivision of Common Stock upon exercise of options granted pursuant to a (by any stock option agreementsplit, stock option plan dividend, recapitalization, reorganization, reclassification or equity incentive plan subsequent otherwise) or a combination of Common Stock (by reverse stock split, recapitalization, reorganization, reclassification or otherwise), provided, however, that the holder of this Warrant shall be entitled to the adjustment of the Exercise Price to be made after the date hereof shall also be Excluded Securities), of record for effecting such subdivision or combination as described in Section 4(c) hereof; or (bE) securities upon the exercise issuance of Common Stock or exchange of or conversion of (i) any Convertible Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued mergers and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringsurviving entity.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph 6(c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Securities Purchase Agreement (including all securities issued to any finder or broker for facilitating the purchase of the Debentures and the Warrants); (aII) securities issued upon exercise of the Debentures or Warrants; (III) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants to, to be granted in the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans in effect as of the Company Closing Date or adopted after the Closing Date by the Board of Directors (or a majority of duly authorized committee thereof) or by the members of a committee of non-employee directors established for such purpose Company's shareholders, or (for purposes of clarityy) vendors, the issuance of shares of either directly or pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors (or a duly authorized committee thereof) or by the Company's shareholders; (IV) any borrowings, direct or indirect, from financial institutions by the Company that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the value of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price equity portion of any such securitiesborrowings, (c) securities issued pursuant including warrants, options or other rights to acquisitions or strategic transactions approved by a majority purchase capital stock and other interests convertible into capital stock of the disinterested directorsCompany, does not exceed ten percent (10%) of such borrowing (or, in the case of a borrowing under the existing working capital facility provided any by Xxxxxxx Xxxxx and the Related Parties, does not exceed forty percent (40%) of such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, borrowing); (dV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Initial Effective Date; (VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (VIII) shares of Common Stock issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary purpose of which is to raise equity capital, (IX) shares of Common Stock issued pursuant to a registered primary public offeringoffering underwritten on a best efforts basis by Xxxxxxx Xxxxx or a nationally-recognized investment bank with net proceeds to the Company of at least fifteen million dollars ($15,000,000), and (X) the Additional Registrable Securities (as defined in the Registration Rights Agreement).

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) securities issued upon the exercise of stock options and warrants outstanding as of the date hereof, (IV) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or to be granted in the discretion of the Board of Directors, as approved by the independent members of the Board, pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Closing Date, or consultants to(y) consultants, the Company either directly or pursuant to any stock option agreementwarrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, stock option plan or equity incentive plan duly adopted provided such issuances are approved by a majority of the non-employee independent members of the Board of Directors of or by the Company or a majority of the members of a committee of non-employee directors established for such purpose Company's shareholders; (for purposes of clarity, the issuance of V) shares of Common Stock upon exercise of options granted pursuant issued to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued Person in connection with a joint venture, strategic alliance or other commercial relationship with such Person relating to the operation of the Company's business and not for the purpose of raising equity capital, (VI) up to an additional $3 million of securities that may be directly placed by the Company with its existing shareholders, within 45 days from the date hereof, on the same terms and conditions as the sale of the Securities pursuant to the Purchase Agreement; , and (iiVII) securities the issuance of up to a registered broker-dealer 100,000 shares to legal counsel for services rendered or to be rendered in connection with the transactions contemplated by the Purchase this Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “Excluded Securities” For purposes hereof, "EXCLUDED SECURITIES" means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VI) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof; (VII) any Common Stock, warrants to purchase Common Stock, options to purchase Common Stock, or any other securities that the Company issued, or which the Company was obligated to issue, prior to or on September 20, 2005; and (VIII) any issuance of Common Stock, warrants to purchase Common Stock, options to purchase Common Stock, or any other securities issued to investors, brokers, dealers or any other persons or entities in conjunction with, and/or pursuant to the terms of, the Company's Private Placement Memorandum dated March 15, 2005, as amended.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b11(c) in respect of Excluded Securitiesan Exempt Issuance. For purposes of this Agreement, “Excluded SecuritiesExempt Issuance” means shall mean the issuance of (a) shares of Common Stock or options to employees, officers or directors of, or consultants to, of the Company pursuant to any stock or option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee composed exclusively of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities)otherwise issued in connection with employment, (b) securities upon the conversion or exercise of any Notes or exchange Series AA Convertible Preferred Stock (“Preferred Stock”), any warrants issued to the original holders of or conversion of the Company’s 10% Secured Convertible Subordinated Notes issued pursuant to the Securities Purchase Agreement (i) any Securities issued in connection with the “Purchase Agreement; ”), dated October 31, 2005, among the Company and the purchasers that are a party thereto (iithe “Notes”) securities to a registered broker-dealer in connection with or the transactions contemplated by holders of the Purchase Agreement; and/or (iii) Preferred Stock or any other securities convertible securities, options or rights exercisable or exchangeable for or convertible into shares of Common Stock which are warrants issued and outstanding on the date of the Purchase this Agreement, provided that such securities have not been amended since the date of the Purchase this Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of shares of Common Stock issuable pursuant to such securities or (but if the number is increased, this proviso will only apply to decrease the exerciseincreased number, exchange or conversion price not the number outstanding on the date of any such securitiesthis Agreement), (c) securities issued pursuant to acquisitions or equipment financing, leasing arrangements, commercial bank financings, corporate partnering arrangements, strategic transactions approved by a majority of the disinterested directors(including joint ventures), acquisitions, mergers or technology transfer or development arrangements, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock as a dividend or recapitalization distribution on, or reclassification of, other outstanding shares for which an adjustment to the Conversion Price (as defined in the Purchase Agreement) is made pursuant to Section 5(e)(ii) of the Company (subject Notes issued pursuant to Section 3(a) hereof)the Purchase Agreement, and (e) shares of Common Stock or other securities issued options to consultants or suppliers, provided the number of shares of Common Stock or shares underlying options does not exceed, in connection with the aggregate, 0.5 % of the outstanding Common Stock in any registered primary public offering12-month period.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(b6(c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase AgreementIssue Date; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(aV) hereof), and securities issued in connection with bona fide licensing or other strategic transactions not for the primary purpose of raising equity capital approved by the Board of Directors; (eVI) shares of Common Stock or other securities issued in connection with the acquisition by the Company of any registered primary public offeringcorporation or other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; and (VII) 233,853 shares of Common Stock issuable to SRI International pursuant to that certain Warrant and Shareholder Rights Agreement (the “SRI Warrant”) issued by the Company to SRI on October 6, 2000 (plus any additional shares of Common Stock that may become issuable under the SRI Warrant in order to prevent dilution resulting from any stock split, stock dividend, recapitalization, reorganization, reclassification or other event that subdivides all of the outstanding shares of Common Stock).

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or to be granted by the Board of Directors, pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Closing Date or by the Company’s stockholders, including Battery Ventures IX, L.P. (“Battery”) and PAR Investment Partners, L.P. (“PAR”), or consultants to(y) consultants, the Company either directly or pursuant to any stock option agreementwarrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, stock option plan or equity incentive plan duly adopted provided such issuances are approved by a majority of the non-employee independent members of the Board of Directors of Directors, including the Company Battery representative and the PAR representative, or a majority of by the members of a committee of non-employee directors established for such purpose Company’s stockholders, including Battery and PAR; (for purposes of clarity, the issuance of IV) shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with any Convertible Securities or Purchase Rights outstanding on the Purchase Agreementdate hereof; (iiV) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which isin connection with a joint venture, itself strategic alliance or through its subsidiaries, an operating company in a business synergistic other commercial relationship with such Person relating to the business operation of the Company Company’s business and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, equity capital; and (dVI) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization respect to which the Holders consent that no such adjustment shall be made as a result of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringsuch issuance.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Stock or exercise of the Warrants or the VeriChip Warrant; (aIII) the 2004 Warrants (as defined in the Securities Purchase Agreement) and securities issued or issuable thereunder; (IV) shares of Common Stock (or options the common stock of any Subsidiary) issuable or issued to employees, officers (x) employees or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for any such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant Subsidiary from time to a stock option agreement, stock option plan time either directly or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise of options, in such case granted or exchange to be granted in the discretion of the Company’s or conversion such Subsidiary’s Board of Directors (ior a duly authorized committee thereof) any Securities issued as an inducement to join the Company or such Subsidiary or pursuant to one or more stock option plans or restricted stock plans in connection with effect as of the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with Closing Date or adopted after the transactions contemplated Closing Date by the Purchase Agreement; and/or Company’s or such Subsidiary’s Board of Directors (iiior a duly authorized committee thereof) other securities or rights exercisable by the Company’s or exchangeable for such Subsidiary’s shareholders, or convertible into shares of (y) vendors, service providers or consultants, either directly or pursuant to options or warrants to purchase Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since issuances are approved by the date Company’s or such Subsidiary’s Board of the Purchase Agreement Directors (other than on or a non-discretionary basis pursuant to the pre-existing anti-dilution provisions duly authorized committee thereof) to increase or by the number of Company’s or such securities or to decrease the exercise, exchange or conversion price of any such securities, Subsidiary’s shareholders; (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company or any of its Subsidiaries; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date; (VII) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed on Schedule 3.5 to the Securities Purchase Agreement; (IX) shares issued to Persons with whom the Company or any of its Subsidiaries is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company’s or any such Subsidiary’s business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital; (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Company’s or such Subsidiary’s Board of Directors and (IX) shares issued to a Subsidiary pursuant to a share exchange.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(b4(c) upon the issuance of any Excluded Securities and in respect of Excluded Securitiesno event shall the Exercise Price be adjusted pursuant to Section 4(c) to a price less than $1.20 per Warrant Share. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase AgreementIssue Date; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(aV) hereof), securities issued in connection with bona fide licensing or other strategic transactions not for the primary purpose of raising equity capital approved by the Board of Directors; and (eVI) shares of Common Stock or other securities issued in connection with the acquisition by the Company of any registered primary public offeringcorporation or other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(b) in respect 2.3 upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (A) securities purchased under the issuance Subscription Agreement; (B) securities issued upon exercise of the Warrants or upon the warrants issued third parties as provided for in the Subscription Agreement; (aC) shares of Common Stock issuable or issued to (x) employees or directors from time to time either directly or upon the exercise of options, in such case granted or to be granted in the discretion of the Board of Directors, pursuant to one or more stock option plans or stock purchase plans adopted by the Company, or (y) to consultants or vendors, either directly or pursuant to warrants or other convertible securities to acquire shares of Common Stock that are outstanding on the date hereof or issued hereafter; (D) shares of Common Stock issued in connection with any Common Stock Equivalents outstanding on the date hereof; (E) shares of Common Stock or options to employees, officers or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant Equivalents issued to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued third parties in connection with a merger, acquisition, consolidation, joint venture, strategic alliance or other commercial relationship with such third party relating to the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date operation of the Purchase AgreementCompany’s business, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the primary purpose of raising capital or which is not to an entity whose primary business is investing in securities, raise equity capital; and (dF) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringCompany.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted in the discretion of the Board of Directors, as approved by the Company independent members of the Board, pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Issue Date or subsequently approved by the independent members of the Board of Directors or by the Company's stockholders, or (y) consultants, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Company Board of Directors or a majority of by the members of a committee of non-employee directors established for such purpose Company's stockholders; (for purposes of clarityIV) except as required by subparagraph (c)(ii)(E) above, the issuance of shares of Common Stock upon exercise issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (V) shares of options granted pursuant Common Stock issued to a stock option agreementPerson in connection with a joint venture, stock option plan strategic alliance or equity incentive plan subsequent other commercial relationship with such Person relating to the date hereof shall also be Excluded Securities), operation of the Company's business and not for the purpose of raising equity capital; (bVI) shares of Common Stock (or other securities upon the exercise convertible or exchange exercisable into shares of or conversion of (iCommon Stock) any Securities issued in connection with the Purchase Agreementacquisition by the Company of any corporation or other entity (including, without limitation, the interests in certain limited partnerships of which the Company or a Subsidiary is a general partner) or substantially all of the assets of any corporation or other entity or division thereof, as long as a purpose of such transaction is not to raise equity capital; (iiVII) securities to a registered broker-dealer in connection with the transactions contemplated any borrowings by the Purchase Agreement; and/or (iii) other securities Company, direct or rights exercisable indirect, from a commercial lending institution that are approved by the Board of Directors, including any type of loan or exchangeable for or convertible into shares payment evidenced by any type of Common Stock which are issued and outstanding on Debt instrument, provided the date value of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price equity portion of any such securitiesborrowings, (c) securities issued pursuant including warrants, options or other rights to acquisitions or strategic transactions approved by a majority purchase capital stock and other interests convertible into capital stock of the disinterested directorsCompany, provided any does not exceed ten percent (10%) of such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company borrowing; and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or (VIII) up to an entity whose primary business is investing aggregate of $5,000,000 of Film Vehicle Interests (as defined in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereofSecurities Purchase Agreement), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with a commercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date, provided that, if in connection with such acquisition, the Company will issue a number of shares equal to or greater than 20% of the number of shares of Common Stock issued and outstanding immediately prior to the consummation of such acquisition, the Company shall obtain a fairness opinion with respect to such acquisition from an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company’s business and not in connection with a transaction the purpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with a commercial lending transaction with a federally- insured financial institution that is approved by the independent members of the Board of Directors, provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date, provided that, if in connection with such acquisition, the Company will issue a number of shares equal to or greater than 20% of the number of shares of Common Stock issued and outstanding immediately prior to the consummation of such acquisition, the Company shall obtain a fairness opinion with respect to such acquisition from an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the purpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) ------------------- securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants to, to be granted in the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Company Issue Date or adopted after the Issue Date by the Board of Directors (or a majority of duly authorized committee thereof) or by the members of a committee of non-employee directors established for such purpose Company's shareholders, or (for purposes of clarityy) vendors, the issuance of shares of either directly or pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since issuances are approved by the date Board of the Purchase Agreement Directors (other than on or a non-discretionary basis pursuant to the pre-existing anti-dilution provisions duly authorized committee thereof) to increase or by the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, Company's shareholders; (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company or other securities a Subsidiary of any Person or business not for the purpose or with the effect of raising equity capital; (VI) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof; (VII) shares issued to Persons with whom the Company or a Subsidiary is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital; (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Board of Directors; and (IX) shares of Common Stock issued to a Subsidiary under a share exchange agreement.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) the issuance Securities and the Existing Securities (as defined in the Debentures); (II) securities issued upon conversion or exercise of the Existing Securities; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors; (IV) any borrowings, direct or indirect, from financial institutions by the Company that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the value of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price equity portion of any such securitiesborrowings, (c) securities issued pursuant including warrants, options or other rights to acquisitions or strategic transactions approved by a majority purchase capital stock and other interests convertible into capital stock of the disinterested directorsCompany, provided any does not exceed ten percent (10%) of such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, borrowing; (dV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof, including, without limitation, the Existing Securities; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company ‘s business and not in connection with a transaction the purpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or to be granted by the Board of Directors, pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Closing Date or by the Company’s stockholders, including Batter Ventures IX, L.P. (“Battery”), or consultants to(y) consultants, the Company either directly or pursuant to any stock option agreementwarrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, stock option plan or equity incentive plan duly adopted provided such issuances are approved by a majority of the non-employee independent members of the Board of Directors of Directors, including the Company Battery representative, or a majority of by the members of a committee of non-employee directors established for such purpose Company’s stockholders, including Battery; (for purposes of clarity, the issuance of IV) shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with any Convertible Securities or Purchase Rights outstanding on the Purchase Agreementdate hereof; (iiV) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which isin connection with a joint venture, itself strategic alliance or through its subsidiaries, an operating company in a business synergistic other commercial relationship with such Person relating to the business operation of the Company Company’s business and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, equity capital; and (dVI) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization respect to which the Holders consent that no such adjustment shall be made as a result of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringsuch issuance.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. “Excluded Securities” For purposes hereof, "EXCLUDED SECURITIES" means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eV) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; and (VI) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under this Section 3(bpursuant to paragraph (c) in respect above upon the issuance of any Excluded Securities. “For purposes hereof, "Excluded Securities” " means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with a commercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date, provided that a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the purpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under this Section 3(bpursuant to paragraph (c) in respect above upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions issuances are approved by a majority the Board of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, Directors; (dIV) shares of Common Stock or other securities issued in connection with a commercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date, provided that a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered primary public offeringConvertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company’s business and not in connection with a transaction the purpose of which is to raise equity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Shares or exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted by the Board of Directors, the Company pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Closing Date or approved by the independent members of the Board of Directors or by the Company’s stockholders, or (y) consultants, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors or by the Company or a majority of the members of a committee of non-employee directors established for such purpose Company’s stockholders; (for purposes of clarityIV) except as required by subparagraph (c)(ii)(E) above, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with any Convertible Securities or Purchase Rights outstanding on the Purchase Agreementdate hereof; (iiV) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which isin connection with a joint venture, itself strategic alliance or through its subsidiaries, an operating company in a business synergistic other commercial relationship with such Person relating to the business operation of the Company Company’s business and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, equity capital; and (dVI) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization respect to which the Holders consents that no such adjustment shall be made as a result of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringsuch issuance.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b) in respect of Excluded Securities. “"Excluded Securities” " means the issuance of (a) shares of Common Stock or options to employees, officers or directors of, or consultants to, the Company pursuant to any stock option agreement, stock option plan or equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose (for purposes of clarity, the issuance of shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Shares or exercise of the Warrants; (aIII) shares of Common Stock issuable or options issued to employees, officers (x) employees or directors offrom time to time either directly or upon the exercise of options, in such case granted or consultants toto be granted in the discretion of the Board of Directors, as approved by the Company independent members of the Board, pursuant to any one or more stock option agreement, plans or restricted stock option plan plans or equity incentive plan duly adopted by a majority stock purchase plans in effect as of the non-employee Execution Date or approved by the independent members of the Board of Directors or by the Company’s shareholders, or (y) consultants, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Company Board of Directors or a majority of by the members of a committee of non-employee directors established for such purpose Company’s shareholders; (for purposes of clarity, the issuance of IV) shares of Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with any Convertible Securities or Purchase Rights outstanding on the Purchase Agreementdate hereof; and (iiV) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided any such issuance shall only be to a Person which isin connection with a joint venture, itself strategic alliance or through its subsidiaries, an operating company in a business synergistic other commercial relationship with such Person relating to the business operation of the Company Company’s business and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offeringequity capital.

Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no adjustment will to the Exercise Price shall be made under pursuant to this Section 3(bparagraph (c) in respect upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the issuance Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (aIII) shares of Common Stock issuable or options issued to (x) employees, officers consultants or directors offrom time to time upon the exercise of options, in such case granted or consultants to, to be granted in the Company discretion of the Board of Directors pursuant to any one or more stock option agreement, plans or restricted stock option plan or equity incentive plan duly adopted by a majority plans in effect as of the non-employee Issue Date or adopted after the Issue Date by the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company or a majority of the members of a committee of non-employee directors established for such purpose Issue Date, and (for purposes of clarity, the issuance of shares of y) vendors pursuant to warrants to purchase Common Stock upon exercise of options granted pursuant to a stock option agreement, stock option plan or equity incentive plan subsequent to the date hereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or rights exercisable or exchangeable for or convertible into shares of Common Stock which that are issued and outstanding on the date of the Purchase Agreementhereof or issued hereafter, provided such issuances are approved by the Board of Directors; (IV) any borrowings, direct or indirect, from financial institutions by the Company that such securities have not been amended since are approved by the date Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the Purchase Agreement (other than on a non-discretionary basis pursuant to the pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price equity portion of any such securitiesborrowings, (c) securities issued pursuant including warrants, options or other rights to acquisitions or strategic transactions approved by a majority purchase capital stock and other interests convertible into capital stock of the disinterested directorsCompany, provided any does not exceed ten percent (10%) of such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, borrowing; (dV) shares of Common Stock or other securities issued in connection with any stock split, stock dividend or recapitalization of the Company Company; (subject to Section 3(a) hereof), and (eVI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other securities entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any registered Convertible Securities or Purchase Rights outstanding on the date hereof and (VIII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company ‘s business and not in connection with a transaction the primary public offeringpurpose of which is to raise equity capital.