1.7 Additional Shares. In addition to the right to purchase the Initial Shares granted to Holder on the Issue Date, (i) upon the funding of Advances in the aggregate original principal amount of Twenty Million Dollars ($20,000,000) in accordance with the Credit Agreement among the Company, the other Credit Parties from time to time party thereto, Pacific Western Bank, as administrative agent for itself and the other Lenders, and the Lenders from time to time party thereto (as the same may from time to time be amended, modified, supplemented or restated, the Credit Agreement), the Company shall be deemed to have automatically granted to Holder, the right to purchase, at an exercise price per share equal to the Warrant Price, 28,600 additional shares, and (ii) on the date a New Revolving Lender becomes a Lender pursuant to the terms of Section 2.2 of the Credit Agreement, the Company shall be deemed to have automatically granted to Holder, the right to purchase, at an exercise price per share equal to the Warrant Price, the number of additional shares equal to (x) 21,450, multiplied by (y) the New Revolving Lenders Commitment divided by $25,000,000 (all such additional Shares being called the Additional Shares). Capitalized terms used but not defined in this Section 1.7 shall have the meanings given to them in the Credit Agreement.
ADJUSTMENTS TO THE SHARES
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its common stock payable in common stock, or other securities, or subdivides the outstanding common stock into a greater amount of common stock, then upon exercise of this warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this warrant, Holder shall be entitled to receive, upon exercise or conversion of this warrant, the number and kind of securities and property that Holder would have received for the Shares if this warrant had been exercised immediately before such reclassification, exchange, substitution, or other event. Such an event shall include any automatic conversion of the outstanding or issuable securities of the Company of the same class or series as the Shares to common stock pursuant to the terms of the Companys Amended and Restated Certificate of Incorporation (as amended and/or restated from time to time, the Restated Certificate) upon the closing of a registered public offering of the Companys common stock. The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property. The new warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a greater number of shares, the Warrant Price shall be proportionately decreased.