Common use of Exempted Issuances Clause in Contracts

Exempted Issuances. Notwithstanding any other provision herein, the foregoing provisions of this Section 3 shall not apply to, and no adjustment shall be made to the Per Share Warrant Price for: (a) shares of Stock issuable upon the exercise of options or other convertible securities previously issued pursuant to the Company's stock option, employee stock purchase or other employee benefit plan; (b) shares of Stock to be issued pursuant to the Company's outstanding stock option, employee stock purchase or other employee benefit plan that total not more than 200,000 shares of Stock per employee per year and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Stock issuable upon conversion of shares of Series C Preferred Stock or warrants issued in connection therewith; (d) shares of Stock issuable upon conversion of shares of 7% Convertible Series A Preferred Stock or 5% Convertible Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this Designation; (e) shares of Stock issuable upon conversion of Class B Common Stock; (f) securities that have been approved for issuance or grant by the holders of at least a majority of the outstanding shares of Series C Preferred Stock; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENT (g) securities that are issued in conjunction with an acquisition or a non-financing strategic transaction approved by the Board of Directors; provided, however, that the number of shares of Stock or securities convertible into Stock issued by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 10% of the shares of Stock outstanding (including all shares of Stock issued or issuable upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to the date of such transaction; or (h) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and Purchaser, pursuant to which the Purchaser is purchasing this Warrant, and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of Stock to be issued in connection with any penalty or anti-dilution provision contained in such documents, any shares of Common Stock issued under the Warrants issued as part of that offering or under the terms of the Common Stock and Warrant Purchase Agreement relating thereto, and shares of Common Stock issued in private offerings completed prior to May 31, 2007 as provided in Section 7.10 of the Common Stock and Warrant Purchase Agreement, or under Warrants issued as part of those other offerings, or under the terms of the purchase agreements relating to those other offerings.

Exempted Issuances. Notwithstanding any other provision herein, the foregoing provisions of this Section 3 shall not apply to, and no adjustment shall be made to the Per Share Warrant Price for: (a) shares of Stock issuable upon the exercise of options or other convertible securities previously issued pursuant to the Company's stock option, employee stock purchase or other employee benefit plan; (b) shares of Stock to be issued pursuant to the Company's outstanding stock option, employee stock purchase or other employee benefit plan that total not more than 200,000 shares of Stock per employee per year and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Stock issuable upon conversion of shares of Series C Preferred Stock or warrants issued in connection therewith; (d) shares of Stock issuable upon conversion of shares of 7% Convertible Series A Preferred Stock or 5% Convertible Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this Designation; (e) shares of Stock issuable upon conversion of Class B Common Stock; (f) securities that have been approved for issuance or grant by the holders of at least a majority of the outstanding shares of Series C Preferred Stock; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENT; (g) securities that are issued in conjunction with an acquisition or a non-financing strategic transaction approved by the Board of Directors; provided, however, that the number of shares of Stock or securities convertible into Stock issued by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 10% of the shares of Stock outstanding (including all shares of Stock issued or issuable upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to the date of such transaction; or (h) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and Purchaser, pursuant to which the Purchaser is purchasing this Warrant, and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of Stock to be issued in connection with any penalty or anti-dilution provision contained in such documents, any shares of Common Stock issued under the Warrants issued as part of that offering or under the terms of the Common Stock and Warrant Purchase Agreement relating thereto, and shares of Common Stock issued in private offerings completed prior to May 31, 2007 as provided in Section 7.10 of the Common Stock and Warrant Purchase Agreement, or under Warrants issued as part of those other offerings, or under the terms of the purchase agreements relating to those other offerings.

Exempted Issuances. Notwithstanding any other provision herein, the foregoing provisions The right of first refusal contained in this Section 3 shall not apply to the issuance by the Company of Equity Securities (i) upon conversion of the Securities; (ii) to officers, directors or employees of, or consultants to, and no adjustment shall be made to the Per Share Warrant Price for: (a) shares of Stock issuable upon the exercise of options or other convertible securities previously issued Company pursuant to the Company's a warrant, stock optiongrant, employee stock option agreement or plan, purchase plan or other employee benefit stock incentive program or agreement approved by the Board of Directors (each such agreement or plan; , an “Incentive Plan”); (biii) shares of Stock to be issued pursuant to the Company's outstanding stock option, employee stock purchase or other employee benefit plan that total not more than 200,000 shares of Stock per employee per year and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Stock issuable upon conversion of shares of Series C Preferred Stock or warrants issued in connection therewith; with the acquisition by the Company of another business entity or majority ownership thereof approved by the Board of Directors, including the affirmative vote of at least one (d1) shares director designated by the holders of Stock issuable upon conversion of shares of 7% Convertible the Series A Preferred Stock or 5% Convertible Stock, one (1) director designated by the holders of the Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this Designation; and one (e1) shares of Stock issuable upon conversion of Class B Common Stock; (f) securities that have been approved for issuance or grant director designated by the holders of at least a majority of the outstanding shares of Series C D Preferred Stock; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENT (giv) securities that are issued to lease companies, real estate lessors, banks or financial institutions, in conjunction connection with an acquisition any lease or a non-debt financing strategic transaction approved by the Board of Directors; provided, however, that the number of shares of Stock or securities convertible into Stock issued Directors including one (1) director designated by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 10% holders of the shares Series A Preferred Stock, one (1) director designated by the holders of the Series B Preferred Stock outstanding and one (including all shares 1) director designated by the holders of Stock issued or issuable the Series D Preferred Stock; (v) upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to outstanding as of the date of such transactionthis Agreement or issued in accordance with this Section 3.5; or (hvi) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and Purchaser, pursuant to which the Purchaser is purchasing this Warrant, and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of Stock to be issued in connection with any penalty stock split, stock dividend, distribution, recapitalization or anti-dilution provision contained similar event; (vii) in such documentsconnection with a strategic investment and/or acquisition of technology or intellectual property not principally for equity financing purposes approved by the Board of Directors, any shares including the affirmative vote of Common Stock issued under at least one (1) director designated by the Warrants issued as part of that offering or under the terms holders of the Common Series A Preferred Stock, one (1) director designated by the holders of the Series B Preferred Stock and Warrant Purchase Agreement relating thereto, and shares of Common Stock issued in private offerings completed prior to May 31, 2007 as provided in Section 7.10 one (1) director designated by the holders of the Common Stock and Warrant Series D Preferred Stock; (viii) in connection with the Initial Public Offering; (ix) pursuant to the Purchase Agreement, ; or under Warrants issued as part (x) by way of those a dividend or other offerings, or under distribution on Equity Securities described in the terms of the purchase agreements relating to those other offeringsforegoing clauses (i) through (ix).

Exempted Issuances. Notwithstanding any other provision hereinFor purposes hereof, the foregoing provisions of this Section 3 “Exempted Issuances” shall not apply to, and no adjustment shall be made to the Per Share Warrant Price for: mean (aA) shares of Common Stock issuable issued or deemed to have been issued by SDINC pursuant to an Approved Stock Plan (as defined below) outstanding on the date hereof; (B) shares of common stock issued or deemed to have been issued by SDINC pursuant to this Agreement or the Warrant; (C) shares of common stock issued or deemed to have been issued upon the conversion, exchange or exercise of options any Option or Convertible Security outstanding on the date hereof, provided that the terms of such option or convertible security are not amended or otherwise modified on or after such date, and provided that the conversion price, exchange price, exercise price or other convertible purchase price is not reduced, adjusted or otherwise modified and the number of shares issued or issuable is not increased (whether by operation of, or in accordance with, the relevant governing documents or otherwise) on or after the date hereof; (D) shares issued or deemed to have been issued by SDINC upon conversion of the Note; and (E) securities previously issued pursuant to the Company's stock optionacquisition of another entity by either Borrower that is approved by Lender, employee stock by merger, purchase of all or substantially all of the assets of such entity or other employee benefit plan; (b) shares transaction whereby such Borrower shall become directly or indirectly the owner of more than 25% of the aggregate voting power of all classes of the voting securities of such other entity; provided that the foregoing provision does not provide Lender with the right to prevent or approve any acquisition or merger, and any such Lender approval shall only determine whether such acquisition or merger is an Exempted Issuance. Further for purposes hereof, “Approved Stock to be issued pursuant to the Company's outstanding Plan” shall mean any stock option, employee stock purchase or other employee benefit incentive plan that total not more than 200,000 shares of Stock per employee per year and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Stock issuable upon conversion of shares of Series C Preferred Stock or warrants issued in connection therewith; (d) shares of Stock issuable upon conversion of shares of 7% Convertible Series A Preferred Stock or 5% Convertible Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this Designation; (e) shares of Stock issuable upon conversion of Class B Common Stock; (f) securities that have has been approved for issuance or grant by the holders of at least a majority of the outstanding shares of Series C Preferred Stock; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENT (g) securities that are issued in conjunction with an acquisition or a non-financing strategic transaction approved by the Board board of Directors; provided, however, that the number directors and stockholders of shares of Stock or securities convertible into Stock issued by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 10% of the shares of Stock outstanding (including all shares of Stock issued or issuable upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to the date of such transaction; or (h) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and PurchaserSDINC, pursuant to which the Purchaser is purchasing this Warrant, and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of SDINC’s Common Stock to may be issued in connection with to any penalty employees or anti-dilution provision contained in such documentsconsultants that are not founders, any shares officers or their affiliates, for services provided to SDINC, which Approved Stock Plan shall not permit the granting of Common Stock issued under the Warrants issued as part of securities that offering or under the terms would constitute greater than ten percent (10%) of the Common Stock and Warrant Purchase Agreement relating thereto, and shares outstanding capital stock of Common Stock issued in private offerings completed prior to May 31, 2007 Company as provided in Section 7.10 of the Common Stock and Warrant Purchase Agreement, or under Warrants issued as part of those other offerings, or under the terms of the purchase agreements relating to those other offeringsdate hereof.

Exempted Issuances. Notwithstanding any other provision hereinFor purposes hereof, the foregoing provisions of this Section 3 “Exempted Issuances” shall not apply to, and no adjustment shall be made to the Per Share Warrant Price for: mean (aA) shares of Common Stock issuable issued or deemed to have been issued by SDINC pursuant to an Approved Stock Plan (as defined below) outstanding on the date hereof, but in any event, not in excess of 500,000 shares of Common Stock (including any Options or other rights exercisable therefor) in any twelve-month period; (B) shares of common stock issued or deemed to have been issued by SDINC pursuant to this Agreement or the Warrant issued to EQ Partners LLC (or its assigns); (C) shares of common stock issued or deemed to have been issued upon the conversion, exchange or exercise of options any Option or Convertible Security outstanding on the date hereof and disclosed to SDLP in writing, provided that the terms of such Option or Convertible Security are not amended or otherwise modified on or after such date, and provided that the conversion price, exchange price, exercise price or other convertible purchase price is not reduced, adjusted or otherwise modified and the number of shares issued or issuable is not increased (whether by operation of, or in accordance with, the relevant governing documents or otherwise) on or after the date hereof; (D) Conversion Shares issued or deemed to have been issued to SDINC upon conversion of the Note; and (E) securities previously issued pursuant to the Company's stock optionacquisition of another entity by either Borrower that is approved by SDLP, employee stock by merger, purchase of all or substantially all of the assets of such entity or other employee benefit plan; (b) shares transaction whereby such Borrower shall become directly or indirectly the owner of more than 25% of the aggregate voting power of all classes of the voting securities of such other entity; provided, that the foregoing provision does not provide SDLP with the right to prevent or approve any acquisition or merger itself, and any such SDLP approval shall only determine whether such acquisition or merger is an Exempted Issuance. For purposes hereof, an “Approved Stock to be issued pursuant to the Company's outstanding Plan” shall mean any stock option, employee stock purchase or other employee benefit incentive plan that total not more than 200,000 shares of Stock per employee per year has been adopted for bona fide incentive compensation purposes and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Stock issuable upon conversion of shares of Series C Preferred Stock or warrants issued in connection therewith; (d) shares of Stock issuable upon conversion of shares of 7% Convertible Series A Preferred Stock or 5% Convertible Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this Designation; (e) shares of Stock issuable upon conversion of Class B Common Stock; (f) securities that have been approved for issuance or grant by the holders of at least a majority of the outstanding shares of Series C Preferred Stock; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENT (g) securities that are issued in conjunction with an acquisition or a non-financing strategic transaction approved by the Board board of Directors; provided, however, that the number directors and stockholders of shares of Stock or securities convertible into Stock issued by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 10% of the shares of Stock outstanding (including all shares of Stock issued or issuable upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to the date of such transaction; or (h) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and PurchaserSDINC, pursuant to which the Purchaser is purchasing this WarrantSDINC’s Common Stock may be issued to any employees or consultants that are not founders, officers or their affiliates, for services provided to SDINC, which Approved Stock Plan shall not permit the granting of securities that would constitute greater than ten percent (10%) of the outstanding capital stock of Company calculated on a fully-diluted basis (as described in Section 14.6.1) as of the Effective Date. This Agreement and all other Financing Documents (including any Additional Financing Documents, if any) shall continue in full force and effect with respect to any of the Obligations that are not converted into Conversion Shares pursuant to the foregoing provisions and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of Stock to be issued in connection with any penalty or anti-dilution provision contained in such documents, any shares of Common Stock issued under the Warrants issued as part of that offering or under the terms provisions of the Common Stock and Warrant Purchase Agreement relating thereto, and shares of Common Stock issued in private offerings completed prior to May 31, 2007 as provided in Section 7.10 of the Common Stock and Warrant Purchase Agreement, or under Warrants issued as part of those other offerings, or under the terms of the purchase agreements relating to those other offeringsNote.

Exempted Issuances. Notwithstanding any other provision hereinin this Section 3, the foregoing provisions of this Section 3 shall not apply to, and no adjustment shall be made to the Per Share Exercise Price or the shares issuable upon exercise of this Warrant Price for: (ai) shares of Common Stock issuable upon the exercise of options or other convertible securities to be issued pursuant to the Company’s stock option, performance award or employee benefit plan; provided, however, that this exemption shall be limited to 7,000,000 shares of Common Stock and an additional 1,574,501 shares of Common Stock issuable upon the exercise of options reserved for grant in September 2002 pursuant to the Company’s option exchange program; (ii) shares of Common Stock issuable upon the exercise of options or other convertible securities previously issued pursuant to the Company's ’s stock option, employee stock purchase performance award or other employee benefit plan; (biii) shares of Stock to be issued pursuant to the Company's outstanding stock option, employee stock purchase or other employee benefit plan that total not more than 200,000 shares of Stock per employee per year and an aggregate maximum of 2,000,000 shares of Stock per year and that do not contain exercise prices that are below $0.30 per share; (c) shares of Common Stock issuable upon conversion of shares of Series C A Preferred Stock Stock, the Note, or warrants issued in connection therewith; (d) shares of Stock issuable upon conversion of shares of 7% Convertible pursuant to this Warrant, or pay-in-kind dividends paid on the Series A Preferred Stock or 5% Convertible Series B Preferred Stock of the Company or any warrants outstanding on the date of the filing of this DesignationNote; (e) shares of Stock issuable upon conversion of Class B Common Stock; (fiv) securities that have been approved for issuance or grant by the holders Holders of at least a majority two-thirds of the outstanding shares of Series C Preferred Stockthe Common Stock underlying the Warrants, on an as-exercised basis; FORM OF PENALTY WARRANT UNDER REGISTRATION RIGHTS AGREEMENTor (gv) securities that are issued in conjunction with an acquisition or a non-financing strategic transaction approved by the Board of Directors; provided, however, that in the aggregate the number of shares of Common Stock or securities convertible into Common Stock issued by the Company in conjunction with non-financing strategic transactions that are exempt from the foregoing provisions of this Section 3 shall be limited to 1020% of the shares of Common Stock outstanding (including all shares of Common Stock issued or issuable upon conversion of any convertible security or upon the exercise of any rights, warrants or options) immediately prior to the date Date of such transaction; or (h) Shares of Stock that are issued pursuant to that certain Common Stock and Warrant Purchase Agreement dated as of an even date herewith between the Company and Purchaser, pursuant to which the Purchaser is purchasing this Warrant, and the related Registration Rights Agreement referenced therein, including, without limitation, any shares of Stock to be issued in connection with any penalty or anti-dilution provision contained in such documents, any shares of Common Stock issued under the Warrants issued as part of that offering or under the terms of the Common Stock and Warrant Purchase Agreement relating thereto, and shares of Common Stock issued in private offerings completed prior to May 31, 2007 as provided in Section 7.10 of the Common Stock and Warrant Purchase Agreement, or under Warrants issued as part of those other offerings, or under the terms of the purchase agreements relating to those other offeringsIssuance.