Common use of Net Exercise Rights Clause in Contracts

Net Exercise Rights. Notwithstanding the payment provisions set ------------------- forth in this Section 3, the holder may elect to receive the amount of Warrant Shares equal to the value (as determined below) of this Warrant by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder the number of shares of Common Stock determined by use of 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 Warrant Shares subject to this Warrant. A = the Fair Market Value (as defined below) of one (1) Warrant Share. B = the Exercise Price per share of the Warrant Shares. For purposes of this Section 3, fair market value of a share as of a particular date shall mean: (i) If the Company's registration statement under the Act, covering its initial underwritten public offering of stock has been declared effective by the Securities and Exchange Commission, then the fair market value of a share shall be the closing price (the last reported sales price, of not so reported, the average of the last reported bid and asked prices) of the Company's stock as of the last business day immediately prior to the exercise of this Warrant. (ii) If such a registration statement has not been declared effective, or if it has been declared effective but the offering is not consummated in accordance with the terms of the underwriting agreement between the Company and its underwriters relating to such registration statement, then as determined in good faith by the Company's Board of Directors upon a review of relevant factors.

Net Exercise Rights. Notwithstanding the payment provisions set ------------------- forth in this Section 3, the holder may elect to receive the amount shares of Warrant Shares Stock equal to the value (as determined below) of this Warrant by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder the number of shares of Common Series B Preferred Stock determined by use of the following formula: X = Y(A-B) ------ A Where: X = the number of shares of Common Series B Preferred Stock to be issued to the holder. Y = the number of Warrant Shares shares of Series B Preferred Stock subject to this Warrant. . A = the Fair Market Value (as defined below) of one (1) Warrant Shareshare of Series B Preferred Stock. B = the Exercise Price per share of the Warrant SharesPurchase Price pursuant to this Warrant. For purposes of this Section 3, fair market value of a share as of a particular date shall mean: (i1) If the Company's registration statement under the Act, covering its initial underwritten public offering of stock stock, has been declared effective by the Securities and Exchange Commission, then the fair market value of a share shall be the closing price (the last reported sales price, of if not so reported, the average of the last reported bid and asked prices) of the Company's stock as of the last business day immediately prior to the exercise of this Warrant. (ii2) If such a registration statement has not been declared effective, or if it has been declared effective but the offering is not consummated in accordance with the terms of the underwriting agreement between the Company and its underwriters relating to such registration statement, then as determined in good faith by the Company's Board of Directors upon a review of relevant factors.