AND PROPERTY (INCLUDING CASH, WHERE APPLICABLE) TO WHICH SUCH HOLDER
IS ENTITLED UPON SUCH EXERCISE PURSUANT TO SECTION 1 OR OTHERWISE.
2.2
EXERCISE.
(A)
PAYMENT MAY BE MADE EITHER (I) IN CASH OF IMMEDIATELY AVAILABLE
FUNDS OR BY CERTIFIED OR OFFICIAL BANK CHECK PAYABLE TO THE ORDER OF THE COMPANY
EQUAL TO THE APPLICABLE AGGREGATE EXERCISE PRICE, (II) BY DELIVERY OF THIS
WARRANT, OR SHARES OF COMMON STOCK AND/OR COMMON STOCK RECEIVABLE UPON EXERCISE
OF THIS WARRANT IN ACCORDANCE WITH THE FORMULA SET FORTH IN SUBSECTION
(B) BELOW, OR (III) BY A COMBINATION OF ANY OF THE FOREGOING METHODS, FOR THE
NUMBER OF COMMON SHARES SPECIFIED IN SUCH EXERCISE NOTICE (AS SUCH EXERCISE
NUMBER SHALL BE ADJUSTED TO REFLECT ANY ADJUSTMENT IN THE TOTAL NUMBER OF SHARES
OF COMMON STOCK ISSUABLE TO THE HOLDER PER THE TERMS OF THIS WARRANT) AND THE
HOLDER SHALL THEREUPON BE ENTITLED TO RECEIVE THE NUMBER OF DULY AUTHORIZED,
VALIDLY ISSUED, FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK (OR OTHER
SECURITIES) DETERMINED AS
3
provided herein.
(B)
NOTWITHSTANDING ANY PROVISIONS HEREIN TO THE CONTRARY, IN THE
EVENT THAT EITHER (I) THERE IS NO EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
TO THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT OR (II) AN
EVENT OF DEFAULT (AS DEFINED IN ANY OF (X) THAT CERTAIN SECURITY AND PURCHASE
AGREEMENT DATED AS OF FEBRUARY 17, 2006 AMONG THE HOLDER, THE COMPANY AND
VARIOUS SUBSIDIARIES OF THE COMPANY, AS AMENDED, RESTATED, MODIFIED AND/OR
SUPPLEMENTED FROM TIME TO TIME, (Y) THAT CERTAIN 10% SENIOR SUBORDINATED
CONVERTIBLE NOTE, DATED FEBRUARY 17, 2004 ISSUED BY THE COMPANY TO AMARANTH
TRADING, L.L.C. IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,229,919 AND ASSIGNED TO
THE HOLDER PURSUANT TO THAT CERTAIN NOTE SALE AGREEMENT DATED AS OF DECEMBER 20,
2006 BY AND BETWEEN AMARANTH TRADING L.L.C. AND THE HOLDER, AS AMENDED,
RESTATED, MODIFIED AND/OR SUPPLEMENTED FROM TIME TO TIME AND/OR (Z) THAT CERTAIN
SECURED TERM NOTE, DATED MARCH 29, 2007, ISSUED BY THE COMPANY TO THE HOLDER, AS
AMENDED, RESTATED, MODIFIED AND/OR SUPPLEMENTED FROM TIME TO TIME) HAS OCCURRED
AND IS CONTINUING, IF THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK IS
GREATER THAN THE EXERCISE PRICE (AT THE DATE OF CALCULATION AS SET FORTH BELOW),
IN LIEU OF EXERCISING THIS WARRANT FOR CASH, THE HOLDER MAY ELECT TO RECEIVE
SHARES EQUAL TO THE VALUE (AS DETERMINED BELOW) OF THIS WARRANT (OR THE PORTION
THEREOF BEING EXERCISED) BY SURRENDER OF THIS WARRANT AT THE PRINCIPAL OFFICE OF
THE COMPANY TOGETHER WITH THE PROPERLY ENDORSED EXERCISE NOTICE IN WHICH EVENT
THE COMPANY SHALL ISSUE TO THE HOLDER A NUMBER OF SHARES OF COMMON STOCK
COMPUTED USING THE FOLLOWING FORMULA:
X=
Y(A-B)
A
Where X =
the number of shares of Common Stock to be issued to the Holder
Y =
the number of shares of Common Stock purchasable under this Warrant or, if only
a portion of this Warrant is being exercised, the portion of this Warrant being
exercised (at the date of