Common use of Net Exercise Clause in Contracts

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per share of Common Stock shall be the average of the closing prices of the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following after the closing date on which a Registration Statement (as defined in Section 7.1 of the Company’s Securities Purchase Agreement dated February 10, 2003, by and among the Company and the persons listed on the Schedule of Purchasers attached thereto as Exhibit A) has first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”)gone effective, if (i) at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five ten (10) consecutive trading days immediately prior to preceding such date, or (ii) if the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.Nasdaq

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded on other than a securities exchangeno sales price for such period, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.last sales

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following after the closing date on which a Registration Statement (as defined in Section 7.1 of the Company’s Securities Purchase Agreement dated February 10, 2003, by and among the Company and the persons listed on the Schedule of Purchasers attached thereto as Exhibit A) has first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”)gone effective, if (i) at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly completed and endorsed Notice of Exercise Exercise, 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be mean the average of the closing bid and asked prices of Common Stock quoted in the Common Stock, on over-the-counter market in which the securities exchange on which such Common Stock is traded following or the Initial Public Offeringclosing price quoted on any exchange on which the Common Stock is listed, whichever is applicable, as published in the Eastern Edition of The Wall Street Journal for five the ten (10) trading days immediately prior to the exercise datedate on which this Warrant is surrendered and payment of the Exercise Price has been paid (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not traded on other than a securities the over-the-counter market or on an exchange, then the fair market value shall be the price per share of that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Series A Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Series A Common Stock computed using the following formula: Y (A - B) ----- X = Y (A-B) A Where Where: X = the The number of Shares shares of Series A Common Stock to be issued to the Holder pursuant to this net exercise option; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Series A Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 4.3, the fair market value per of one share of Series A Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing bid or sales prices whichever is applicable of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Series A Common Stock specified in the final prospectus with respect to such offering.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where Where: X = the The number of Shares shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading twenty (20) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if actively traded over-the- counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the twenty (20) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding In the event of any provisions herein to the contrary, immediately following the closing exercise of this Warrant in connection with a mandatory conversion of the Company’s first sale of its Common Series A Preferred Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share into shares of the Company’s Common Stock issuable hereunder is greater than pursuant to Section 2(c) of the Exercise Price (at Certificate of Designation, Preferences and Rights of the date of calculation as set forth below)Series A Convertible Preferred Stock, in lieu of exercising this Warrant by payment of cashpursuant to Section 1(b), the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Series A Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Series A Preferred Stock computed using the following formula: Where: X = Y (A-B) A Where X = the The number of Shares shares of Series A Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares of Common Series A Preferred Stock purchasable under in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Series A Preferred Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 1(c), the fair market value per of one share of Series A Preferred Stock (or Common Stock, to the extent all such Series A Preferred Stock has been converted into the Company’s Common Stock) as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company; provided, however, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial “Price to Public” of one share of such Series A Preferred Stock (or Common Stock issuable upon conversion of such Series A Preferred Stock) specified in the final prospectus with respect to such offering (net of applicable underwriting commissions).

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be mean the average of the closing bid and asked prices of Common Stock quoted in the Common Stock, on over-the-counter market in which the securities exchange on which such Common Stock is traded following or the Initial Public Offeringclosing price quoted on any exchange on which the Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for five the ten (10) trading days immediately prior to the exercise datedate of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange); provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.2 in connection with the Company’s initial public offering of its Common Stock, the fair market value per share shall be the per share offering price of the Common Stock to the public. If the Common Stock is not traded on other than a securities the over-the-counter market or on an exchange, then the fair market value shall be the price per share of that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of DirectorsDirectors (excluding for purposes of this calculation any director designated by the Holder or any of the Holder’s affiliates).

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”). A Holder who Net Exercises shall have the properly endorsed Notice of Exercise rights described in which event Sections 3(b) and 3(c) hereof, and the Company shall issue to the such Holder a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the The number of Shares to be issued to the Holder Holder. Y = the The number of shares of Common Stock Shares purchasable under the this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled exercised (at the date of such calculation) ). A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (1) Share (at the date of such calculation) ). B = The Exercise Price (as adjusted to the date of such calculation) ). For purposes of the above calculationthis Warrant, including this Section 4, the fair market value per share of Common Stock a Share shall be the average of the closing prices of the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If mean (a) if the Common Stock is traded on other than a U.S. national securities exchange, then the fair market value per share shall be deemed to be the closing sale price on such exchange on the applicable date of valuation; (b) if the Common Stock is not traded on any national securities exchange nor quoted on any market quotation system, then the fair market value shall be the value as determined in good faith by the Company’s Board of DirectorsDirectors upon a review of relevant factors, including recent sales of the Company’s securities and the then current valuation determined for purposes of Section 409A of the Internal Revenue Code; and (c) if this Warrant is exercised in connection with the consummation of the Company’s sale of its Common Stock or other securities in the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (other than a registration statement relating either to sale of securities to employees of the Company pursuant to its stock option, stock purchase or similar plan or a SEC Rule 145 transaction) (such public offering, the “Initial Public Offering”), the fair market value per Share shall be the per share offering price to the public of the Initial Public Offering.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Corporation's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Corporation's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be the average mean, as of the closing prices of the Common Stockany date, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If (a) if the Common Stock is traded listed on other than a national securities exchange, the closing or opening price as reported for composite transactions for such date, (b) if the Common Stock is not so listed but is traded on the NASDAQ National Market or SmallCap Market, the closing or opening price as reported on the NASDAQ National Market or SmallCap Market on such date or, if no sale occurred on a trading day, then the fair market value mean between the highest bid and the lowest asked prices as of the close of business on such trading day, as reported on the NASDAQ National Market or SmallCap Market, (c) if the Common Stock is not traded on a national securities exchange or the NASDAQ National Market or SmallCap Market, but is otherwise traded over-the-counter, the arithmetic average of the highest bid and lowest asked prices on such date as quoted on the National Association of Securities Dealers Automated Quotation System or an equivalent generally accepted reporting service, (d) if the Corporation completes a transaction in which it ceases to be a publicly-traded company, the highest price paid to the Corporation's stockholders (on a per share of basis) for their Common Stock shall be determined or (e) if none of the above apply, a determination made in good faith by the Company’s Corporation's Board of Directors.

Net Exercise. Notwithstanding any provisions herein If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the contrary, immediately following Registration Statement (as defined in the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, Subscription Agreement) or pursuant to an effective another registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”)amended, if and the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of the Common Stock, Stock on the securities exchange on which such NYSE Amex or other Eligible Market where the Common Stock is listed or traded following as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Initial Public OfferingCompany and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the five (5) consecutive trading days immediately prior to the exercise date. If Exercise Date, or (ii) if the NYSE Amex is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive shares receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per share of Common Stock one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid and offer prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933Registration Statement, as amended (defined in the “Act”) (the “Initial Public Offering”)Purchase Agreement, if and the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a such number of shares of Common Stock computed using the following formula: X = Y (A-–B) A Where X = the number of Shares shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the that portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = the Exercise Price (as adjusted to the date of such calculation) For the purposes of the above calculation, the fair market value per of one share of Common Stock shall be determined as follows: (i) if the Company’s Common Stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “Trading Market”), the fair market value of one share of Common Stock shall be the average closing price or last sale price of a share of Common Stock reported for the closing prices of business day immediately before the Common Stock, on the securities exchange date on which such Holder delivers this Warrant together with its Notice of Exercise to the Company, and (ii) if the Company’s Common Stock is not traded following in a Trading Market, the Initial Public Offering, for five trading days immediately prior to Board of Directors of the exercise date. If the Common Stock is traded on other than a securities exchange, then Company shall determine the fair market value per of one share of Common Stock shall be determined in its reasonable good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following contrary and except as may be limited by the closing Board of Directors of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, Company as amended (the “Act”) (the “Initial Public Offering”)set forth below, if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of surrendering this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) ); For purposes of the above calculation, if the Company's Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the fair market value per of one share of Common Stock shall be the average closing sales price for such stock (or the mid-point of the closing prices bid and ask price at the closing, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock, ) on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five last market trading days immediately day prior to the exercise date. If day of determination, as reported in the Common Stock is traded on Wall Street Journal or such other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by source as the Company’s 's Board of DirectorsDirectors deems reliable.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following after the closing Effectiveness Deadline Date (as defined in Section 7.2(b) of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firmSecurities Purchase Agreement dated December 17, pursuant to an effective registration statement under the Securities Act of 19332004, as amended (the “Act”"Purchase Agreement") (by and among the “Initial Public Offering”Company and the persons listed on the Schedule of Purchasers attach thereto as Exhibit A), if (i) the Registration Statement (as defined in the Purchase Agreement) has not been declared effective until such time as the Registration Statement is declared effective or at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the CompanyCorporation’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the CompanyCorporation’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be the average mean, as of the closing prices of the Common Stockany date, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If (a) if the Common Stock is traded listed on other than a national securities exchange, the closing or opening price as reported for composite transactions for such date, (b) if the Common Stock is not so listed but is traded on the NASDAQ National Market or SmallCap Market, the closing or opening price as reported on the NASDAQ National Market or SmallCap Market on such date or, if no sale occurred on a trading day, then the fair market value mean between the highest bid and the lowest asked prices as of the close of business on such trading day, as reported on the NASDAQ National Market or SmallCap Market, (c) if the Common Stock is not traded on a national securities exchange or the NASDAQ National Market or SmallCap Market, but is otherwise traded over-the-counter, the arithmetic average of the highest bid and lowest asked prices on such date as quoted on the National Association of Securities Dealers Automated Quotation System or an equivalent generally accepted reporting service, (d) if the Corporation completes a transaction in which it ceases to be a publicly-traded company, the highest price paid to the Corporation’s stockholders (on a per share of basis) for their Common Stock shall be determined or (e) if none of the above apply, a determination made in good faith by the CompanyCorporation’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein to If during the contraryExercise Period, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq Global Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the trading day immediately preceding such date, or (ii) if the Nasdaq Global Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive receive, without payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, 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-A - B) --------- A Where Where: X = the The number of Shares shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior tot he net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to If during the contraryExercise Period, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq Global Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq Global Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to If during the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if Exercise Period the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), and a registration statement covering the shares that are the subject of the Exercise Notice (the “Unavailable Exercise Shares”) or an exemption from registration is not available for the resale of the Unavailable Exercise Shares, in lieu of exercising this Warrant by payment of cashcash or by check, the Holder may elect to effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive shares Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Exercise Shares with respect to which this Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) exercised A = the fair market value Fair Market Value (as defined below) of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of this Warrant, the above calculation“Fair Market Value” of one share of Common Stock shall mean (i) the closing sales price for the shares of Common Stock on the Eligible Market where the Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) on the last trading day prior to the Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the closing sales price reported by Bloomberg on the principal Trading Market for the Common Stock on the last trading day prior to the Exercise Date, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the average Board of Directors of the closing prices Company in the exercise of its good faith judgment. For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as in effect on the date hereof, assuming the Holder is not an affiliate of the Common StockCompany, it is intended that the Exercise Shares issued in a net exercise pursuant to this Section 2.1 shall be deemed to have been acquired by the Holder, and the holding period for the Exercise Shares shall be deemed to have commenced, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directorsdate this Warrant was originally issued.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to SECTION 5, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Common Stock from the Vested Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of Shares shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Vested Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis SECTION 6, the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or on the National Market System of the NASDAQ Stock Market, the value shall be deemed to be the average of the daily closing price of common stock of the Company as reported on such securities exchange or the National Market System of the NASDAQ Stock Market (as reported in THE WALL STREET JOURNAL or, if not reported therein, in another authoritative source) for the five (5) consecutive full trading days (in which such shares are traded on such securities exchange or the National Market System of the NASDAQ Stock Market) ending at the close of trading on the trading day immediately preceding such particular date; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) for the five (5) consecutive full trading days ending at the close of the Common Stock, trading on the securities exchange on which trading day immediately preceding such Common Stock particular date; and (iii) if there is traded following no active public market, the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company. The portion of this Warrant which is canceled pursuant to this Section 6 shall be deemed to have been exercisable for Vested Shares.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following if during the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if Exercise Period the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = Y= the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = A= the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = B= the Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the American Stock Exchange or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg“) for the 10 consecutive trading days immediately preceding such date, (ii) if the American Stock Exchange is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg or, then if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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) X = ------- A Where X = the number of Shares shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five ten (10) consecutive trading days immediately prior to preceding such date, or (ii) if the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.Nasdaq

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth belowexercise), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per means on any date, as it relates to a share of the Company’s Common Stock shall be (each a “Share”): (i) if the Shares are readily tradable on an established securities market, (x) the average of the closing high and low prices of the Common Stock, such Shares as reported on the principal national securities exchange on which the Shares are then listed on the date specified herein, or if there were no sales on such Common Stock is traded following date, on the Initial Public Offeringnext preceding day on which there were sales, for five trading days immediately prior to the exercise date. If the Common Stock is traded or (y) if such Shares are not listed on other than a national securities exchange, then the average of the last reported bid price, as reported by Financial Industry Regulatory Authority, Inc. or a similar organization, in the over-the-counter market for such Shares for each of the twenty (20) business days preceding the specified date, or (ii) if the Shares are not readily tradable on an established securities market, the value determined by any means determined fair market value per share and reasonable by the board of Common Stock directors of the Company, which determination shall be determined in good faith by the Company’s Board of Directorsfinal and binding on all parties.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 5, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) X= --------- A Where: X = Y (A-B) A Where X = the The number of Shares shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 6, the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average 2 of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Common Stock specified in the final prospectus with respect to such offering.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect (the "Conversion Right") to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be be: (a) the product of (i) the average daily Market Price (as defined below) during the period of the closing prices most recent 10 days, ending on the last business day before the effective date of exercise of the Conversion Right, on which the national securities exchanges were open for trading and (ii) the number of shares of the Common Stock, Stock (as defined herein) into which each Exercise Share is convertible on the securities exchange on which such date; or (b) if no class of Common Stock is traded following then listed or admitted to trading on any national securities exchange or quoted in the Initial Public Offeringover-counter market, for five trading days immediately prior to the fair market value shall be the Market Price on the last business day before the effective date of exercise dateof the Conversion Right. If the Common Stock is traded on other than a national securities exchange or admitted to unlisted trading privileges on such an exchange, then or is listed on the fair market value per share National Market System (the "National Market System") of the Nasdaq, the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the National Market System on such date or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the National Market System. If the Common Stock is not so listed or admitted to unlisted trading privileges, the Market Price as of a specified day shall be the mean of the last bid and asked prices reported on such date (x) by the Nasdaq or (y) if reports are unavailable under clause (x) above by the National Quotation Bureau Incorporated. If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the Market Price as of a specified day shall be determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect (the "Conversion Right") to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be be: (a) the product of (i) the average daily Market Price (as defined below) during the period of the closing prices most recent 10 days, ending on the last business day before the effective date of exercise of the Conversion Right, on which the national securities exchanges were open for trading and (ii) the number of shares of the Common Stock, Stock (as defined herein) into which each Exercise Share is convertible on the securities exchange on which such date; or (b) if no class of Common Stock is traded following then listed or admitted to trading on any national securities exchange or quoted in the Initial Public Offeringover-counter market, for five trading days immediately prior to the fair market value shall be the Market Price on the last business day before the effective date of exercise dateof the Conversion Right. If the Common Stock is traded on other than a national securities exchange or admitted to unlisted trading privileges on such an exchange, then or is listed on the fair market value per share National Market System (the "National Market System") of the Nasdaq, the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the National Market System on such date or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the National Market System. If the Common Stock is not so listed or admitted to unlisted trading privileges, the Market Price as of a specified day shall be determined in good faith by the Company’s Board of Directors.mean

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock New Security issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock the New Security computed using the following formula: X = Y (A-B) A Where X = the number of Shares to be issued to the Holder Y = the number of shares of Common Stock the New Security purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock of the New Security purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes hereof, where a public market exists for the New Securities at the time of such exercise, the fair market value of a share of the above calculationNew Security shall mean the closing price of the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock) quoted in the over-the-counter market in which the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock)) is traded or the closing price quoted on any exchange or electronic securities market on which the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock) is listed, whichever is applicable, as published in The Wall Street Journal for the trading day immediately prior to the date of determination of fair market value. In the event that this Warrant is exercised in connection with the Company’s initial public offering (the “IPO”), the fair market value per share of Common Stock the New Security shall be the average product of (a) the per share offering price to the public of the closing prices IPO, and (b) the number of shares of Common Stock into which each share of the Common Stock, on New Security is convertible at the securities exchange on which time of such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise dateexercise. If the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock) is not traded on other than a the over-the-counter market, an exchange or an electronic securities exchangemarket, then the fair market value shall be the price per share of Common Stock the New Security that the Company could obtain from a willing buyer for shares of the New Security sold by the Company from authorized but unissued shares of the New Security, as such prices shall be determined in good faith by the Company’s Board of Directors. For the avoidance of doubt, unless otherwise exercised, the Warrant shall survive the IPO.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, ------------ the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of Shares shares of Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the trading day immediately preceding the date of delivery of the Notice of Exercise (it being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); (ii) if traded over-the- counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) on the trading day immediately preceding the date of delivery of the Notice of Exercise (it being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); and (iii) if there is no active public market for the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company; provided, that, if the Warrant is being exercised upon the closing of the Company's first underwritten public offering of common stock (the "IPO"), the value will be the initial "Price to Public" of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the final prospectus with respect to such offering.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive shares receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per share of Common Stock one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market or the Nasdaq SmallCap Market, the value shall be deemed to be the average of the closing sale prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately thirty (30) day period ending one day prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending one day prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933Registration Statement, as amended (defined in the “Act”) (the “Initial Public Offering”)Purchase Agreement, if and the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this the Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Warrant Stock equal to the value (as determined below) of this the Warrant (or the portion thereof being canceledcancelled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder hereof a number of shares of Common Warrant Stock computed using the following formula: Y(A - B) X = Y (A-B) -------- A Where Where: X = the The number of Shares shares of Warrant Stock to be issued to the Holder pursuant to this exercise; Y = the The number of shares of Common Warrant Stock purchasable under in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Warrant Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For the purposes of the above calculationthis Section 5, the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the exercise date. If net Exercise Election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive shares receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: X = X= Y (A-A – B) A Where Where: X = the The number of Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per share of Common Stock one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market or the Nasdaq SmallCap Market, the value shall be deemed to be the average of the closing sale prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five (5) trading days immediately day period ending one day prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the five (5) trading day period ending one day prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise (but solely with respect to Exercise Shares that are then vested and exercisable hereunder in accordance with Section 2.1) in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = X= the number of Exercise Shares to be issued to the Holder Y = Y= the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the that portion of the Warrant being canceled (at the date of such calculation) A = A= the fair market value of one share of the Company’s Common Stock purchasable under the Warrant Exercise Share (at the date of such calculation) B = B= Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value of one Exercise Share shall be determined by the Company’s Board of Directors in good faith; provided, however, that: (i) where a public market exists for the Company’s common stock at the time of such exercise, the fair market value per share of Common Stock Exercise Share shall be the average of the closing bid prices of the Common Stock, common stock or the closing price quoted on the national securities exchange on which such Common Stock the common stock is traded following listed as published in the Initial Public OfferingWall StreetJournal, as applicable, for the ten (10) trading day period ending five (5) trading days immediately prior to the exercise date. If date of determination of fair market value; and (ii) if the Common Stock Warrant is traded on other than a securities exchangeexercised in connection with the Company’s initial public offering of common stock, then the fair market value per share of Common Stock Exercise Share shall be determined in good faith by the per share offering price to the public of the Company’s Board of Directorsinitial public offering.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.pink sheets or bulletin board for

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may may, commencing on May 12, 2004 and thereafter for the full term of this Warrant, elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be on any particular date (a) the average of the last reported closing prices of the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value bid price per share of Common Stock shall be on such date on the Nasdaq SmallCap Market (or the Nasdaq National Market, as the case may be), or (b) if there is no such price on such date, then the closing bid price on the Nasdaq SmallCap Market (or the Nasdaq National Market, as the case may be) on the date nearest preceding such date, or (c) if the Common Stock is not then listed or quoted on the Nasdaq SmallCap Market or the Nasdaq National Market, and if prices for the Common Stock are then reported in the "pink sheets" published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) if the shares of Common Stock are not then publicly traded, the fair market value of a share of Common Stock as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following if during the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if Exercise Period the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Global Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the NASDAQ Global Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, ------------ the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formulaformula : Y (A - B) --------- X = A Where: X = Y (A-B) A Where X = the The number of Shares shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the fair market value The Current Market Value (as hereinafter defined) of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Agreement, the fair market value per "Current Market Value" of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the NASDAQ National Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading twenty (20) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the twenty (20) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per share of Common Stock shall be the average of the closing prices of the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the CompanyCorporation’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation 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 shares of common stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the CompanyCorporation’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be the average mean, as of the closing prices of the Common Stockany date, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise date. If (a) if the Common Stock is traded listed on other than a national securities exchange, the closing or opening price as reported for composite transactions for such date, (b) if the Common Stock is not so listed but is traded on the NASDAQ National Market or SmallCap Market, the closing or opening price as reported on the NASDAQ National Market or SmallCap Market on such date or, if no sale occurred on a trading day, then the fair market value mean between the highest bid and the lowest asked prices as of the close of business on such trading day, as reported on the NASDAQ National Market or SmallCap Market, (c) if the Common Stock is not traded on a national securities exchange or the NASDAQ National Market or SmallCap Market, but is otherwise traded over-the-counter, the arithmetic average of the highest bid and lowest asked prices on such date as quoted on the National Association of Securities Dealers Automated Quotation System or an equivalent generally accepted reporting service, (d) if the Corporation completes a transaction in which it ceases to be a publicly-traded company, the highest price paid to the Corporation’s stockholders (on a per share of basis) for their Common Stock shall be determined or (e) if none of the above apply, a determination made in good faith by the CompanyCorporation’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the contrary, immediately following Registration Statement (as defined in the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, Subscription Agreement) or pursuant to an effective another registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”)amended, if and the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of the Common Stock, Stock on the securities exchange on which such Nasdaq Capital Market or other Eligible Market where the Common Stock is listed or traded following as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Initial Public OfferingCompany and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the five (5) consecutive trading days immediately prior to the exercise date. If Exercise Date, or (ii) if the Nasdaq Capital Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may at its option elect to receive shares Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant Exercise Shares (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per share of Common Stock one Exercise Share shall be mean the arithmetic average of the closing sales prices of the Common StockStock quoted on a stock exchange or the arithmetic average of the bid and asked prices of the Common Stock in such over-the-counter market in which the Common Stock may be traded, on whichever is applicable, for the securities exchange on which 20 consecutive trading days (or such shorter period of time as the Common Stock is actually traded following on such stock exchange and/or the Initial Public Offeringover-the-counter market) immediately preceding the relevant date of exercise of the Warrant, for five trading as reported in the Wall Street Journal; or (ii) if the Common Stock has not been traded on either a stock exchange or on the over-the-counter market at any time during the 20 consecutive business days immediately prior to the exercise date. If date of such calculation, the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be price determined in good faith by the Company’s Board of Directors.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive shares receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: Y (A - B) X = Y (A-B) A Where Where: X = the The number of Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per share of Common Stock one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market or the Nasdaq SmallCap Market, the value shall be deemed to be the average of the closing sale prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five (5) trading days immediately day period ending one day prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the five (5) trading day period ending one day prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (AY(A-B) ------ A Where X = the number of Shares shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculationimmediately preceding the date on which the Holder satisfied the delivery obligations set forth in Section 2.1) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be be: (a) the average daily Market Price (as defined below) for one share of Common Stock during the period of the closing prices of the Common Stockmost recent ten (10) Trading Days, ending on the securities exchange on which such last business day before the Effective Date; or (b) if no class of Common Stock is traded following then listed or admitted to trading on any national securities exchange or quoted in the Initial Public Offeringover-counter market, for five trading days immediately prior to the fair market value shall be the Market Price on the last business day before the effective date of exercise dateof the Warrant. If the Common Stock is traded on other than a national securities exchange or admitted to unlisted trading privileges on such an exchange, then or is listed on the fair market value per share National Market System (the "NATIONAL MARKET SYSTEM") or the Small Cap System (the "SMALL CAP") of the Nasdaq, the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the National Market System or the Small Cap on such date or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the National Market System. If the Common Stock is not so listed or admitted to unlisted trading privileges, the Market Price as of a specified day shall be the mean of the last bid and asked prices reported on such date (x) by the Nasdaq or (y) if reports are unavailable under clause (x) above by the National Quotation Bureau Incorporated. If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the Market Price as of a specified day shall be determined in good faith by the Company’s Board of DirectorsDirectors of the Company. If the Holder shall object to any determination by the Board of Directors of the Market Price, the Market Price shall be the fair market value per share of the Common Stock as determined by an independent appraiser retained by the Holder at its expense and reasonably acceptable to the Company; provided, however, that if the Market Price as determined by such appraiser shall differ from the Market Price determined by the Board of Directors by more than ten percent (10%), the Company shall bear the expense of such appraiser.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashas provided above, the Holder may elect to receive receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise exercise form attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof or order a number of shares of Common Stock Warrant Shares computed using the following formula: X = Y (A-A - B) ÷ A Where Where: X = the number of Shares to be issued to the Holder Y = the The number of shares of Common Stock purchasable under to be issued pursuant to this net exercise; Y = The number of shares of Common Stock in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 1(b), the fair market value per of one share of Common Stock as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq Global Market, the value shall be deemed to be the average of the closing prices of the Common Stock, securities on such exchange or market over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading thirty (30) day period ending three (3) days immediately prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending three (3) days prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company. Notwithstanding the foregoing, the Company shall not be obligated to issue more than 200,000 shares to the Holder under this Section 1(b) during any 90 day period.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following if during the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if Exercise Period the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cashpursuant to Section 4, the Holder may elect to receive shares receive, without the payment by the Holder of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where X Where:X = the The number of Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock purchasable under the Warrant (Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the fair market value per share of Common Stock one Warrant Share as of a particular date shall be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market or the Nasdaq SmallCap Market, the value shall be deemed to be the average of the closing sale prices of the Common Stock, securities on such exchange over the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately thirty (30) day period ending one day prior to the net exercise date. If election; (ii) if traded over-the-counter, the Common Stock value shall be deemed to be the average of the closing bid or sale prices (whichever is traded on other than a securities exchangeapplicable) over the thirty (30) day period ending one day prior to the net exercise; and (iii) if there is no active public market, then the value shall be the fair market value per share of Common Stock shall be thereof, as determined in good faith by the Company’s Board of DirectorsDirectors of the Company.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following after the closing Effectiveness Deadline Date (as defined in Section 7.2(b) of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firmSecurities Purchase Agreement dated November 7, pursuant to an effective registration statement under the Securities Act of 19332003, as amended (the “ActPurchase Agreement”) (by and among the “Initial Public Offering”Company and the persons listed on the Schedule of Purchasers attach thereto as Exhibit A), if (i) the Registration Statement (as defined in the Purchase Agreement) has not been declared effective until such time as the Registration Statement is declared effective or at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s 's Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the "fair market value per value" of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, "Bloomberg") for the Common Stock, on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five ten (10) consecutive trading days immediately prior to preceding such date, or (ii) if the exercise date. If the Common Stock is traded on other than a securities exchange, then the fair market value per share of Common Stock shall be determined in good faith by the Company’s Board of Directors.Nasdaq

Net Exercise. Notwithstanding any provisions herein If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933Registration Statement, as amended (defined in the “Act”) (the “Initial Public Offering”)Purchase Agreement, if and the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cashcash or by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value per value” of one share of Common Stock shall be mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq National Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the securities exchange on which such Common Stock is traded following the Initial Public Offering, principal trading market for five trading days immediately prior to the exercise date. If the Common Stock during the same period, or, if there is traded no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on other than a securities exchangethe pink sheets or bulletin board for such security as reported by Bloomberg, then or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Common Stock shall be as determined by the Board of Directors of the Company in the exercise of its good faith by the Company’s Board of Directorsjudgment.

Net Exercise. Notwithstanding any provisions herein to the contrary, immediately following the closing of the Company’s first sale of its Common Stock to the public in an offering underwritten by an investment banking firm, pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) (the “Initial Public Offering”), if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise 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 shares of Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the fair market value per of one share of Common Stock shall be: (a) the average daily Market Price (as defined below) during the period of the most recent 10 business days, ending on the last business day before the effective date of exercise, on which the national securities exchanges were open for trading; or (b) if no class of Common Stock is then listed or admitted to trading on any national securities exchange or quoted in the over-counter market, the fair market value shall be the average Market Price on the last business day before the effective date of exercise. If the Stock is traded on a national securities exchange or admitted to unlisted trading privileges on such an exchange, or is listed on the National Market System (the “National Market System”) of the Nasdaq, the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the National Market System on such date or if no such sale is made on such day, the mean of the closing bid and asked prices of the Common Stock, for such day on such exchange or on the securities exchange on which such Common Stock is traded following the Initial Public Offering, for five trading days immediately prior to the exercise dateNational Market System. If the Common Stock is traded not so listed or admitted to unlisted trading privileges, the Market Price as of a specified day shall be the mean of the last bid and asked prices reported on other than a securities exchange, then such date (x) by the fair market value per share of Nasdaq or (y) if reports are unavailable under clause (x) above by the National Quotation Bureau Incorporated. If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the Market Price as of a specified day shall be determined in good faith by the Company’s Board of DirectorsDirectors of the Company.