Common use of Rule 416 Clause in Contracts

Rule 416. The Company and the Investors each acknowledge that an indeterminate number of Registrable Securities shall be registered pursuant to Rule 416 under the Securities Act so as to include in such Registration Statement any and all Registrable Securities which may become issuable (i) to prevent dilution resulting from stock splits, stock dividends or similar transactions and (ii) by reason of reductions in the Exercise Price of the Warrants in accordance with the terms thereof, including, but not limited to, in the case of the Prepaid Warrants, the terms which cause the applicable Exercise Percentages to decrease and the terms which cause the Variable Exercise Price to decrease to the extent the Closing Bid Price of the Common Stock decreases (collectively, the "RULE 416 SECURITIES"). If the Company determines that the Registration Statements filed hereunder do not cover all of the Rule 416 Securities, the Company shall immediately provide to each Investor written notice (a "RULE 416 NOTICE") setting forth the basis for the Company's position and the authority therefor. The Company acknowledges that the number of shares of Common Stock initially included in any Registration Statement relating to the Registrable Securities represents a good faith estimate of the maximum number of shares issuable upon exercise of the Warrants.