Common use of Milestone Adjustments Clause in Contracts

Milestone Adjustments. If the Company shall have failed (each a “Milestone Failure”) to meet or exceed any of the milestone goals (“Milestone Goals”) that are set forth on Schedule 5(g) annexed hereto for any one or more of the following periods (each a “Milestone Period”): (i) the six (6) month period ending October 31, 2008 or (ii) the twelve (12) month period ending April 30, 2009 (each a “Milestone Date”), as reported in the Company’s Form 10-QSB (or Form 10-KSB, if applicable) for such fiscal period, then the Exercise Price shall be reduced (but not increased) (each, a “Milestone Adjustment”) to equal the lesser of (a) the Exercise Price then in effect, (b) the Market Price as determined on the applicable Milestone Date, or (c) the Market Price as determined on the date (each, a “Milestone Adjustment Date”) that is five (5) Trading Days after the date that Company files its next Form 10-QSB (or Form 10-KSB, if applicable) with the Commission following the end of the applicable Milestone Period (the “Milestone Adjustment Price”). Each such adjustment shall be effective as of the first day following each Milestone Date (by way of example, if the Milestone Goal is not met for the Milestone Period ending October 31, 2008, the reduction is effective immediately on November 1, 2008). As to any Exercises by the Holder that occurred following the end of a Milestone Period but prior to the date the Company’s periodic report was filed (“Interim Period”), the Company shall retroactively send the Holder additional Warrant Shares (“Interim Warrant Shares”) within 3 Trading Days of the date of the applicable filing if an adjustment is required hereunder (provided that to the extent any such shares would cause the Beneficial Ownership Limitation to be exceeded, such excess shares shall not be issued and delivered until such time as such shares may be so issued without exceeding the Beneficial Ownership Limitation). The number of additional Warrant Shares issued shall be equal to the number of Warrant Shares receivable from such Exercises based on the adjusted Exercise Price less any Warrant Shares previously received on account of such Exercises. Any subsequent restatements of the Company’s financials shall require similar retroactive issuances if the aforementioned events are subsequently deemed to have occurred. The Company shall provide written notice to the Holder no later than 1 Business Day following the Company’s filing of the applicable periodic report with the Commission, indicating therein the new Exercise Price, the increased number of shares represented by the Warrant, and the revenue and EBITDA for the applicable Milestone Period. In the event that there is an adjustment to the Exercise Price pursuant to any other provision under this Warrant during the Interim Period, the Exercise Price shall be the lower of (i) the Exercise Price as adjusted pursuant to the other provisions of this Warrant and (ii) the new Exercise Price as determined hereunder. Notwithstanding anything herein to the contrary, (i) the provision shall only have the effect of reducing the Exercise Price and (ii) each adjustment shall be permanent notwithstanding future Revenue or the achievement of any other milestones and cumulative with any other adjustments hereunder.

Milestone Adjustments. If the Company shall have failed (each a “Milestone Failure”) to meet or exceed any of the milestone goals (“Milestone Goals”) that are set forth on Schedule 5(g) annexed hereto for any one or more of the following periods period (each a the “Milestone Period”): (i) the six (6) month period ending October 31, 2008 or (ii) the twelve (12) month period ending April 30, 2009 (each a the “Milestone Date”), as reported in the Company’s Form 10-QSB Q (or Form 10-KSBK, if applicable) for such fiscal period, then the Exercise Price shall be reduced (but not increased) (each, a “Milestone Adjustment”) to equal the lesser of (a) the Exercise Price then in effect, (b) the Market Price as determined on the applicable Milestone Date, or (c) the Market Price as determined on the date (each, a “Milestone Adjustment Date”) that is five (5) Trading Days after the date that Company files its next Form 10-QSB Q (or Form 10-KSBK, if applicable) with the Commission following the end of the applicable Milestone Period (the “Milestone Adjustment Price”). Each such adjustment shall be effective as of the first day following each Milestone Date (by way of example, if the Milestone Goal is not met for the Milestone Period ending October 31, 2008, the reduction is effective immediately on November 1, 2008). As to any Exercises by the Holder that occurred following the end of a Milestone Period but prior to the date the Company’s periodic report was filed (“Interim Period”), the Company shall retroactively send the Holder additional Warrant Shares (“Interim Warrant Shares”) within 3 Trading Days of the date of the applicable filing if an adjustment is required hereunder (provided that to the extent any such shares would cause the Beneficial Ownership Limitation to be exceeded, such excess shares shall not be issued and delivered until such time as such shares may be so issued without exceeding the Beneficial Ownership Limitation). The number of additional Warrant Shares issued shall be equal to the number of Warrant Shares receivable from such Exercises based on the adjusted Exercise Price less any Warrant Shares previously received on account of such Exercises. Any subsequent restatements of the Company’s financials shall require similar retroactive issuances if the aforementioned events are subsequently deemed to have occurred. The Company shall provide written notice to the Holder no later than 1 Business Day following the Company’s filing of the applicable periodic report with the Commission, indicating therein the new Exercise Price, the increased number of shares represented by the Warrant, and the revenue and EBITDA for the applicable Milestone Period. In the event that there is an adjustment to the Exercise Price pursuant to any other provision under this Warrant during the Interim Period, the Exercise Price shall be the lower of (i) the Exercise Price as adjusted pursuant to the other provisions of this Warrant and (ii) the new Exercise Price as determined hereunder. Notwithstanding anything herein to the contrary, (i) the provision shall only have the effect of reducing the Exercise Price and (ii) each adjustment shall be permanent notwithstanding future Revenue or the achievement of any other milestones and cumulative with any other adjustments hereunder.