THE RIGHT TO CONVERT SUCH NOTE INTO THE KIND AND AMOUNT
OF SHARES OF STOCK AND OTHER SECURITIES AND PROPERTY (INCLUDING CASH) RECEIVABLE
UPON SUCH RECLASSIFICATION, CHANGE, CONSOLIDATION, MERGER, COMBINATION, SALE,
TRANSFER OR CONVEYANCE BY A HOLDER OF THE NUMBER OF SHARES OF GROUP'S COMMON
STOCK DELIVERABLE UPON CONVERSION OF
11
SUCH NOTE IMMEDIATELY PRIOR TO SUCH RECLASSIFICATION, CHANGE, CONSOLIDATION,
MERGER, SALE, TRANSFER OR CONVEYANCE.
(F)
NO ADJUSTMENT. NO ADJUSTMENT IN THE CONVERSION PRICE SHALL BE
REQUIRED UNLESS THE ADJUSTMENT WOULD REQUIRE AN INCREASE OR DECREASE OF AT LEAST
1% IN THE CONVERSION PRICE AS LAST ADJUSTED; PROVIDED THAT ANY ADJUSTMENTS WHICH
BY REASON OF THIS SECTION 4(F) ARE NOT REQUIRED TO BE MADE SHALL BE CARRIED
FORWARD AND TAKEN INTO ACCOUNT IN ANY SUBSEQUENT ADJUSTMENT. ALL CALCULATIONS
UNDER THIS SECTION 4 SHALL BE MADE TO THE NEAREST CENT OR TO THE NEAREST ONE
HUNDREDTH OF A SHARE, AS THE CASE MAY BE. NO ADJUSTMENT NEED BE MADE FOR (I) THE
ISSUANCE OF OPTIONS OR RIGHTS TO PURCHASE COMMON STOCK PURSUANT TO ANY PRESENT
OR FUTURE EMPLOYEE, DIRECTOR OR CONSULTANT BENEFIT PLAN OR PROGRAM OF OR ASSUMED
BY GROUP OR ANY SUBSIDIARY SO LONG AS THE EXERCISE PRICE OF SUCH OPTIONS OR
RIGHTS IS NOT LESS THAN THE CURRENT MARKET PRICE PER SHARE OF COMMON STOCK ON
SUCH ISSUE DATE, (II) THE ISSUANCE OF COMMON STOCK PURSUANT TO AND IN ACCORDANCE
WITH THE TERMS OF GROUP'S EMPLOYEE STOCK PURCHASE PLAN, OR (III) THE ISSUANCE OF
COMMON STOCK PURSUANT TO ANY OPTION, WARRANT, RIGHT OR EXERCISABLE, EXCHANGEABLE
OR CONVERTIBLE SECURITY OUTSTANDING AS OF THE ISSUE DATE. NO ADJUSTMENT NEED BE
MADE FOR A CHANGE IN THE PAR VALUE OR A CHANGE TO NO PAR VALUE OF GROUP'S COMMON
STOCK. TO THE EXTENT THAT THE NOTES BECOME CONVERTIBLE INTO THE RIGHT TO RECEIVE
CASH, NO ADJUSTMENT NEED BE MADE THEREAFTER AS TO THE CASH. INTEREST WILL NOT
ACCRUE ON THE CASH. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN OR IN ANY
ADDITIONAL NOTE, IN NO EVENT SHALL THE CONVERSION OF THIS NOTE AND ANY
ADDITIONAL NOTES (AS DEFINED IN THIS NOTE AND IN THE REGISTRATION RIGHTS
AGREEMENT OF EVEN DATE HEREWITH BETWEEN GROUP AND EARTHLINK), TAKING INTO
ACCOUNT ALL PRIOR CONVERSIONS, BE CONVERTED IN AN AGGREGATE NUMBER OF SHARES OF
COMMON STOCK WHICH IN THE AGGREGATE EXCEEDS 19.9% OF THE THEN OUTSTANDING SHARES
OF COMMON STOCK.
(G)
ADJUSTMENT FOR TAX PURPOSES. GROUP SHALL BE ENTITLED TO MAKE
SUCH REDUCTIONS IN THE CONVERSION PRICE, IN ADDITION TO THOSE REQUIRED BY
SECTION 4(E), AS IT IN ITS DISCRETION SHALL DETERMINE TO BE ADVISABLE IN ORDER
THAT ANY STOCK DIVIDENDS, SUBDIVISIONS OF SHARES, DISTRIBUTIONS OF RIGHTS TO
PURCHASE STOCK OR NOTES OR DISTRIBUTIONS OF NOTES CONVERTIBLE INTO OR
EXCHANGEABLE FOR CAPITAL STOCK HEREAFTER MADE BY GROUP TO ITS STOCKHOLDERS SHALL
NOT BE TAXABLE, PROVIDED THAT SUCH REDUCTION DOES NOT HAVE AN ADVERSE EFFECT FOR
TAX PURPOSES, OR OTHERWISE, ON HOLDERS OF THE NOTES.
(H)
NOTICE OF ADJUSTMENT. WHENEVER THE CONVERSION PRICE IS
ADJUSTED, THE COMPANY