AS OF WHICH SUCH
NUMBER OF OUTSTANDING SHARES OF AVII COMMON STOCK WAS REPORTED AND TO THE EXTENT
THAT SUCH SECURITIES OF AVII INCLUDE SECURITIES OTHER THAN THIS WARRANT, THE
HOLDER SHALL INFORM THE COMPANY OF ANY SUCH CONVERSIONS, EXCHANGES OR EXERCISES.
(F)
FORCED EXERCISE.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT
THAT AT ANY TIME FOLLOWING DECEMBER 31, 2004, THE CONDITIONS TO FORCED EXERCISE
(AS DEFINED BELOW) ARE SATISFIED, THEN THE COMPANY SHALL HAVE THE RIGHT TO SEND
A WRITTEN NOTICE TO THE HOLDER HEREOF ON THE BUSINESS DAY IMMEDIATELY AFTER THE
MEASURING PERIOD INDICATING THAT THE HOLDER SHALL BE REQUIRED TO EXERCISE THIS
WARRANT ON THE TWENTIETH (20TH) TRADING DAY (THE "WARRANT CANCELLATION DATE")
FOLLOWING RECEIPT OF SUCH WRITTEN NOTICE AS TO THE WARRANTS FOR WHICH THE HOLDER
HAS NOT DELIVERED AN EXERCISE NOTICE AS OF SUCH FORCED EXERCISE DATE.
"CONDITIONS TO FORCED EXERCISE " MEANS THE FOLLOWING CONDITIONS:
(I) ON EACH
DAY DURING THE PERIOD BEGINNING ON THE FIRST DAY OF THE MEASURING PERIOD (AS
DEFINED BELOW) AND ENDING ON THE WARRANT CANCELLATION DATE, THE TRANSFER OF AVII
COMMON STOCK CAN BE MADE PURSUANT TO RULE 144 OR EACH AVII REGISTRATION
STATEMENT IS EFFECTIVE AND AVAILABLE FOR RESALES BY THE COMPANY, (II) ON EACH
DAY DURING THE PERIOD BEGINNING ON THE ISSUANCE DATE AND ENDING ON THE WARRANT
CANCELLATION DATE, THE AVII COMMON STOCK IS DESIGNATED FOR QUOTATION ON THE
PRINCIPAL MARKET AND SHALL NOT HAVE BEEN SUSPENDED FROM TRADING ON SUCH EXCHANGE
OR MARKET; (III) DURING THE PERIOD BEGINNING ON THE ISSUANCE DATE AND ENDING ON
AND INCLUDING THE WARRANT CANCELLATION DATE, THE COMPANY SHALL HAVE DELIVERED
UNRESTRICTED SHARES OF (A) COMMON STOCK UPON CONVERSION OF, AND AS INTEREST
SHARES UNDER (AS APPLICABLE), THE NOTES (AS DEFINED IN THE SECURITIES PURCHASE
AGREEMENT) AND (B) WARRANT SHARES UPON EXERCISE OF THE WARRANTS TO THE HOLDERS
ON A TIMELY BASIS; (IV) THE COMPANY SHALL NOT HAVE FAILED TO TIMELY MAKE ANY
PAYMENTS (AFTER GIVING EFFECT TO ANY APPLICABLE CURE PERIODS) TO THE HOLDER OF
ANY SPA SECURITIES; (V) THE COMPANY OTHERWISE SHALL HAVE BEEN IN MATERIAL
COMPLIANCE WITH AND SHALL NOT HAVE BREACHED, IN ANY MATERIAL RESPECT, ANY
PROVISION, COVENANT, REPRESENTATION OR WARRANTY OF THE SECURITIES PURCHASE
AGREEMENT, THE REGISTRATION RIGHTS AGREEMENT AND ANY OF THE WARRANTS; AND (VII)
THE WEIGHTED AVERAGE PRICE OF THE AVII COMMON STOCK ON EACH DAY DURING ANY
TWENTY CONSECUTIVE TRADING DAYS (THE "MEASURING PERIOD") AFTER DECEMBER 31, 2004
IS EQUAL TO OR GREATER THAN $10.00 (SUBJECT TO ADJUSTMENT FOR
4
STOCK SPLITS, STOCK DIVIDENDS, RECAPITALIZATIONS, COMBINATIONS, REVERSE STOCK
SPLITS OR OTHER SIMILAR EVENTS AFTER THE ISSUANCE DATE).
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
THE
EXERCISE PRICE AND THE NUMBER OF WARRANT SHARES SHALL BE ADJUSTED FROM TIME TO
TIME AS FOLLOWS:
(A)
ADJUSTMENT UPON SUBDIVISION OR COMBINATION OF AVII COMMON STOCK.
IF AVII AT ANY TIME AFTER THE DATE OF ISSUANCE OF THIS WARRANT SUBDIVIDES (BY
ANY STOCK SPLIT, STOCK DIVIDEND, RECAPITALIZATION OR OTHERWISE) ONE OR MORE
CLASSES