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| Section 16 Filings Only |
(vii) Dilutive
Issuances.
(A) If
the Maker, at any time or from time to time, issues or sells any Additional
Shares of Common Stock (as defined below), other than as provided in the
foregoing subsections of this Section 3(e), for a price per share (which,
in the case of options, warrants, convertible securities or other rights,
includes the amounts paid therefor plus the exercise price, conversion price
or
other such amounts payable thereunder) that is less than the
Conversion Price then in effect, then and in each such case, the then applicable
Conversion Price shall automatically be reduced as of the opening of business
on
the date of such issue or sale, to a price determined by multiplying the
Conversion Price then in effect by a fraction (i) the numerator of which
shall be (A) the number of share of Common Stock deemed outstanding (as
determined below) immediately prior to such issue or sale, plus (B) the
number of shares of Common Stock which the aggregate consideration received
by
the Maker for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price, and (ii) the denominator of which
shall be the number of shares of Common Stock deemed outstanding (as defined
below) immediately prior to such issue or sale plus the total number of
Additional Shares of Common Stock so issued; provided,
however,
that
upon the expiration or other termination of options, warrants or other rights
to
purchase or acquire Common Stock which triggered any adjustment under this
Section 3(e)(vii), and upon the expiration or termination of the right to
convert or exchange convertible or exchangeable securities (whether by reason
of
redemption or otherwise) which triggered any adjustment under this Section
3(e)(vii), if any thereof shall not have been exercised, converted or exchanged,
as applicable, the number of shares of Common Stock deemed to be outstanding
pursuant to this Section 3(e)(vii) shall be reduced by the number of shares
as to which options, warrants and rights to purchase or acquire Common Stock
shall have expired or terminated unexercised, and as to which conversion or
exchange rights shall have expired or terminated unexercised, and such number
of
shares shall no longer be deemed to be outstanding; and the Conversion Price
then in effect shall forthwith be readjusted and thereafter be the price that
it
would have been had adjustment been made on the basis of the issuance only
of
the shares of Common Stock actually issued. For purposes of the preceding
sentence, the number of shares of Common Stock deemed to be outstanding as
of a
given date shall be the sum of (x) the number of shares of Common Stock
actually outstanding, (y) the number of shares of Common Stock into which
this Note could be converted on the day immediately preceding the given date,
and (z) the number of shares of Common Stock which could be obtained
through the exercise or conversion of all other rights, options and convertible
securities outstanding on the day immediately preceding the given date.
“Additional
Shares of Common Stock”
shall
mean all shares of Common Stock, and all options, warrants, convertible
securities or other rights to purchase or acquire Common Stock, issued by the
Maker other than (i) shares of Common Stock issued pursuant to the exercise
of options, warrants or convertible securities outstanding on February 21,
2007
(including, without limitation, all of the Warrants issued pursuant to the
Loan
Agreement), or thereafter issued from time to time pursuant to and in accordance
with stock purchase or stock option plans as in effect on February 21, 2007,
and
(ii) shares of Common Stock and/or options, warrants or other Common Stock
purchase rights issued subsequent to February 21, 2007 for up to an aggregate
of
900,000 shares of Common Stock (such number to be subject to adjustment in
accordance with Sections 3(e)(i) and 3(e)(ii) above), where such options,
warrants or other rights are issued both (x) with exercise prices per share
of
Common Stock at the then-current fair market value of a share of Common Stock,
as determined in good faith by the Board of Directors of the Maker or the
Compensation Committee thereof, and (B) to employees, officers or directors
of,
or consultants to, the Maker or any Subsidiary pursuant to stock purchase or
stock option plans or other arrangements that are approved by the Maker’s Board
of Directors or the Compensation Committee thereof, and by the Maker’s
stockholders.
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Prior SEC Filings are through the
SEC EDGAR SERVICE.
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