2.6 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, series or class of Shares, or Number of Shares (including pursuant to Section 2.9 below), the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate signed by its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price, series or class of Shares, and Number of Shares in effect upon the date thereof and the series of adjustments leading to such Warrant Price, series or class of Shares, and Number of Shares.
2.7 Limitations on Liability. Nothing contained in this Warrant shall be construed as imposing any liabilities on Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
2.8 Fractional Shares. No fractional Shares shall be issuable upon exercise of this Warrant and the Number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise of this Warrant, the Company shall eliminate such fractional share interest by paying Holder an amount in cash computed by multiplying the fractional interest by the fair market value, as determined by the Companys Board of Directors, of a full Share.
2.9 Automatic Adjustment to Number of Shares, Warrant Price and Class of Shares. The Warrant Price shall initially be $3.65 per share (the Initial Warrant Price), the Class of Shares for which this Warrant shall initially be exercisable shall be the Companys Series C Preferred Stock (the Initial Class) and the Number of Shares issuable up exercise or conversion of this Warrant shall initially be zero (0) (the Initial Number of Shares); provided, however, the Warrant Price, the series and class of the Shares and the Number of Shares, shall be adjusted from time to time as provided below:
(a) Additional Warrant Coverage. The Number of Shares shall automatically be increased (without the requirement for further action by any Person), from time to time, effective immediately upon the occurrence of each Coverage Increase Event (as defined below), to be equal to (i) the then applicable Coverage Amount, divided by (ii) the then applicable Warrant Price.
(b) Next Round Adjustments. Effective immediately upon the initial closing of the Next Round, automatically and without the requirement for further action by any Person: (a) the Warrant Price shall be adjusted to equal the Next Round Price, (b) the series and class of Shares for which this Warrant is exercisable shall be changed from the Initial Class to the Next Round Class, and (c) the number of Shares for which this Warrant is exercisable shall be adjusted to the Adjusted Number of Shares.
(c) Certain Definitions. As used herein the following capitalized terms have the meanings given below:
Adjusted Number of Shares means a number of Shares (rounded up to the next whole share) equal to: (x) the Coverage Amount then in effect, divided by (y) the Next Round Price.
Coverage Amount means, for any date of determination, initially, $0; provided, however, the Coverage Amount shall be increased, automatically and without the requirement for further action by any Person, by the following amounts (which increases shall be cumulative up to an aggregate adjusted Coverage Amount of $125,000): (a) an additional $75,000, immediately upon the effective date of the Revolving Line Increase (as defined in the Loan Agreement), and (b) an additional, $50,000, immediately upon the date that the outstanding amount of the Obligations under the Loan Agreement (inclusive of amounts under any and all sublimits) first exceeds $10,000,000.