Common use of Protection Against Dilution Clause in Contracts

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: (i) declare a dividend in shares of common stock to a holder of common stock or make a distribution in shares of common stock to holders of common stock, (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number of shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: the Company shall (i) declare a dividend in shares of common stock Common Stock to a holder of common stock Common Stock or make a distribution in shares of common stock Common Stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock, (iii) combine its outstanding shares of common stock, Common Stock or (iv) otherwise effect a re-capitalization recapitalization of such character that the shares of common stock Common Stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Exercise Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number of shares of common stock Common Stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock Common Stock outstanding immediately after such Event. Upon each adjustment in the exercise price Exercise Price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Warrant Securities shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock Warrant Securities for which may be purchased upon exercise of the Warrants Warrant was exercisable immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price Exercise Price in effect immediately prior to such Event, and the denominator of which shall be the exercise price Exercise Price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock Common Stock in stock of any other class of securities convertible into shares of common stock Common Stock shall be treated as a dividend paid in common stock Common Stock to the extent that shares of common stock Common Stock are to be issued issuable upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro the Company on, or with respect to, the then outstanding shares of common stockCommon Stock, (ii) Ontro the Company shall effect a re-capitalization recapitalization of such character that the shares of common stock Common Stock will be changed into or become exchangeable for shares of common stock Common Stock with a different par value or no par value, or (iii) Ontro the Company (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share Share issuable upon exercise of the Warrants this Warrant shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock Common Stock upon such re-capitalizationrecapitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants this Warrant and any underlying convertible security immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontrothe Company, consolidation or merger of Ontro the Company with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontrothe Company; or (iiii ) of the voluntary or involuntary dissolution, liquidation or winding up of Ontrothe Company; then, and in any such case, Ontro the Company shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock Common Stock of record shall be entitled to exchange their shares of common stock Common Stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall distribute with respect to the Common Stock to the holders of its outstanding Common Stock (i) declare securities, other than shares of Common Stock or (ii) property, other than cash dividends, without payment therefor, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and property which the Holder would have held on the date of such exercise if, on the date of this Warrant, the Holder had been the holder of record of the number of shares of Common Stock subscribed for upon such exercise and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Company, the Per Share Warrant Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of common Common Stock or other capital stock outstanding of the Company which he would have owned or been entitled to receive immediately following the happening of any of the events described above had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to such Eventthis paragraph (b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this paragraph (b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and of other capital stock of the denominator Company, the Board of which Directors (whose determination shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants conclusive and shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) described in a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed written notice to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class Warrant promptly after such adjustment) shall determine the allocation of securities convertible into the adjusted Per Share Warrant Price between or among shares of common such classes or capital stock shall be treated as a dividend paid in common stock to the extent that or shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or Common Stock and other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common capital stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) case of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with to which the Company is a party other than a merger or into another consolidation in which the Company is the continuing corporation, or the sale, lease in case of any sale or conveyance to another entity of all or substantially all of the property of the Company, or in the case of any statutory exchange of securities with another entity (including any exchange effectuated in connection with a merger of any other corporation with the Company), the Holder of this Warrant shall have the right thereafter to convert this Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant such that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as reasonable, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. In the event of a triangular merger in which the Company is the surviving corporation, the right to purchase Warrant Shares hereunder shall terminate on the date of such merger and thereupon this Warrant shall become null and void, but only if the controlling corporation shall agree to substitute for this Warrant a warrant which entitles the holder thereof to purchase upon its exercise the kind and amount of shares and other securities and property which the holder would have owned or been entitled to receive had this Warrant been exercised immediately prior to such merger. The above provisions of this paragraph 3(c) shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances. Notice of any such consolidation, merger, statutory exchange, sale or conveyance, and of said provisions so proposed to be made, shall be mailed to the Holder at the same time as notice is given to the holders of Common Stock. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iid) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and Anything in any such case, Ontro shall mail this Section 3 to the Holdercontrary notwithstanding, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record Company shall be entitled to exchange their make such reduction in the Per Share Warrant Price as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of common rights to purchase stock or securities convertible or exchangeable for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as stock hereafter made by the case may beCompany to its shareholders shall not be taxable.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: (i) declare a dividend in shares after the date of common stock this Warrant, the Company shall issue or distribute to a holder of common stock or make a distribution in shares of common stock to the holders of common stock, (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock evidence of its indebtedness, then any other securities of the Exercise Price in effect on the record date of such dividend Company or distribution any cash, property or the effective date of such other assets (excluding a subdivision, combination or reclassification reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3 (individually an b), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor in the full amount thereof, which together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such non-excluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the then current Market Price of the Common Stock less the fair market value (as determined in good faith by the Company's Board of Directors) of the evidence of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be the then current Market Price of the Common Stock. An adjustment made pursuant to this Subsection 3 (a) shall become effective immediately after the record date of any such Special Dividend. (b) In case the Company shall hereafter (i) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of common its Common Stock any shares of capital stock outstanding immediately prior of the Company, the Per Share Warrant Price shall be adjusted to such Eventbe equal to a fraction, the numerator of which shall be the Aggregate Warrant Price and the denominator of which shall be the number of shares of common Common Stock or other capital stock outstanding of the Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3 (b) shall become effective immediately after such Event. Upon each adjustment the record date in the exercise case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (c) Except as provided in Subsections 3 (a) and 3 (d), in case the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price resulting from an Event, per share or entitling the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted holders thereof to purchase Common Stock at a price per share (to the nearest one-thousandth share) determined by multiplying dividing (i) the number total amount, if any, received or receivable by the Company in consideration of shares the issuance or sale of Ontro common stock which may be purchased such securities plus the total consideration, if any, payable to the Company upon exercise of or conversion thereof (the Warrants immediately prior to such Event "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then either the current Market Price of the Common Stock or the current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be adjusted by multiplying the Per Share Warrant Price then in effect by a fraction, the numerator of which shall be (x) the exercise price in effect immediately prior to sum of (A) the number of shares of Common Stock outstanding on the date of such Eventissuance or sale plus (B) the Total Consideration divided by either the current Market Price of the Common Stock or the current Per Share Warrant Price, whichever is greater, and the denominator of which shall be (y) the number of shares of Common Stock outstanding on the date of such issuance or sale plus the maximum number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities. (d) No adjustment in the Per Share Warrant Price shall be required in the case of the issuance by the Company of (i) Common Stock pursuant to the exercise or conversion of any Warrant or any other options, warrants or any convertible securities currently outstanding or outstanding as a result of securities issued pursuant to the PPM; provided, that the exercise price in effect immediately after or conversion price at which such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments options, warrants or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid convertible securities are exercised or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall includeconverted, as the case may be, is equal to the exercise price or conversion price in effect as of the date of this Warrant or as of the date of issuance with respect to securities issued pursuant to the PPM (except for standard anti- dilution adjustments) and (ii) shares of Common Stock issued or sold pursuant to stock purchase or stock option plans or other similar arrangements that are approved by the purposes hereofCompany's Board of Directors. (e) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the stock Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had the Holder this Warrant been exercised the Warrants immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such occurrencecase, and adequate provision to that effect if necessary, appropriate adjustment shall be made at in the time thereof. application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3 (ce) In case: (i) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any classification, reclassification shares of stock or other reorganization securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the capital stock agreements and obligations of Ontrothe Company hereunder. Notice of any such reorganization, consolidation or merger of Ontro with or into another corporationreclassification, or the saleconsolidation, lease merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than 30 days prior to such event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iif) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the voluntary or involuntary dissolution, liquidation or winding up of Ontro; failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, and in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (g) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.05 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by reason of this Subsection 3 (g) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment; provided, further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3 (g)) not later than such time as may be required in order to exchange their shares preserve the tax-free nature of common stock for securities a distribution to the Holder of this Warrant or other property deliverable Common Stock issuable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up the exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or any other appropriate actionto the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (h) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Chief Financial Officer of the Company shall promptly prepare a certificate setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification and a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. In the event of a dispute with respect to any adjustment required pursuant to Section 3, the Holder may appoint, at the Company's expense, an independent financial advisor (e.g. an investment banking or accounting firm) reasonably acceptable to the Company to calculate such adjustment. Such determination shall be binding upon the Holder and the Company. (i) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock, the Company shall mail notice thereof to the Holders of the Warrants not less than 15 days prior to the record date fixed for determining stockholders entitled to participate in such dividend or other distribution. (j) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall (i) declare a dividend in shares of common stock issue to a holder of common stock or make a distribution in shares of common stock to the holders of common stock, the Common Shares any Common Shares by way of a stock dividend; (ii) subdivide its outstanding shares Common Shares into a greater number of common stock, shares; (iii) combine its outstanding shares number of common stockCommon Shares into a smaller number (i.e., a reverse stock split); or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Shares any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockthe Company then, then and in each such case, the Exercise Per Share Warrant Price in effect on immediately prior to the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") action shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying dividing (ix) an amount equal to the exercise price number of Common Shares outstanding immediately prior to such issuance multiplied by the Warrant(s) Per Share Warrant Price in effect immediately prior to such Event issuance by (iiy) a fraction, the numerator of which shall be the total number of shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock Common Shares outstanding immediately after such Eventissuance. Upon each adjustment in the exercise price Per Share Warrant Price resulting from an Eventa stock split or stock dividend, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Warrant Shares shall be adjusted (to by dividing the nearest one-thousandth share) Aggregate Warrant Price by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price Per Share Warrant Price in effect immediately after such Eventadjustment. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereofHolder. (b) In case: (i) a distribution in If the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) Company shall be consolidated with or merged with or into another corporation or entity corporation, or shall sell, lease or convey sell all or substantially all of its assets as part of a reorganization to which the Company is a party within the meaning of the Internal Revenue Code of 1986, as presently in exchange for stock effect, or property (including cash) with the view of distributing such stock or property to shall issue a security convertible into its shareholdersCommon Shares as a dividend on its Common Shares, each share issuable upon exercise of the Warrants Warrant Share shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, hereof by the stock securities or property issued properties issuable or distributed in respect of each share of common stock one Common Share upon such re-capitalization, reclassificationconsolidation, merger, sale, lease reclassification or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrencereorganization, and adequate provision provisions to that effect shall be made at the time thereof. Notice of such consolidation, merger, sale, reclassification or reorganization, and of said provisions so proposed to be made, shall be mailed to the Holder not less than 15 days prior to such event. (c) In case: If the Board of Directors of the Company shall declare any dividend or other distribution in cash with respect to the Common Shares, other than out of surplus, the Company shall mail notice thereof to the Holder not less than 15 days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution. (d) If , during the term of this Warrant, the Company shall issue or sell its Common Shares for a consideration per share less than the Per Share Warrant Price immediately prior to the time of such issue or sale, then forthwith upon such issue or sale, the Per Share Warrant Price in effect immediately prior to such issue or sale shall be reduced to the lower of the prices (calculated to the nearest cent) determined as follows: (1) by dividing (A) an amount equal to the sum of (i) the number of any classificationshares of Common Stock outstanding immediately prior to such issue or sale multiplied by the then-existing Per Share Warrant Price, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or and (ii) the consideration, if any, received by the Company upon such issue or sale, by (B) the total number of Common Shares outstanding immediately after such issue or sale; and (2) by multiplying the voluntary Per Share Warrant Price in effect immediately prior to the time of such issue or involuntary dissolutionsale by a fraction, liquidation the numerator of which shall be (A) the sum of (i) the number of Common Shares outstanding immediately prior to such issue or winding up sale multiplied by the market price immediately prior to such issue or sale; and (ii) the consideration received by the Company upon such sale, divided by (B) the total number of Ontro; thenCommon Shares outstanding immediately after such issue or sale, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as denominator of which holders of common stock of record shall be entitled the market price immediately prior to exchange their shares of common stock for securities such issue or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may besale.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall distribute to the holders of its outstanding Common Stock, (i) declare securities, other than shares of Common Stock, or (ii) property, other than cash dividends paid in conformity with past practice, without payment therefor, with respect to Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and property which the Holder would have held on the date of such exercise if, on the date of this Warrant, the Holder had been the holder of record of the number of shares of the Common Stock subscribed for upon such exercise and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Company, the Per Share Warrant Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of common Common Stock or other capital stock outstanding of the Company which he would have owned or been entitled to receive immediately following the happening of any of the events described above had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to such Eventthis shall become effective immediately prior thereto. An adjustment made pursuant to this subsection (b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subsection (b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the denominator Company, the Board of which Directors (whose determination shall be conclusive and shall be described in a written notice to the number Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares of common such classes or capital stock outstanding immediately after or shares of Common Stock and other capital stock. (c) Except as provided in 3(e), in case the Company shall hereafter issue or sell any shares of Common Stock for a consideration per share less than the fair market value of a share of Common Stock at such Event. Upon each adjustment in time as determined by the exercise price resulting from an Eventreasonable judgment of the Company's Board of Directors, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Common Stock outstanding immediately prior to such Event issuance or sale multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale. (d) Except as provided in 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase the Common Stock or to convert such securities into Common Stock at a fractionprice per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then Per Share Warrant Price in effect on the date of such issuance or sale, the numerator of which Per Share Warrant Price shall be adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale multiplied by the Per Share Warrant Price plus (B) Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance of shares of Common Stock upon the exercise price of options which may be granted under the Company's Stock Option Plan as in effect on the date hereof, or (ii) the issuance of shares pursuant to the exercise of this Warrant or any other warrants that are being issued as of the date hereof or are outstanding as of the date hereof. (f) In case of any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another entity (including any exchange effectuated in connection with a merger of any other corporation with the Company), the Holder of this Warrant shall have the right thereafter to convert such Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Eventconsolidation, merger, statutory exchange, sale or conveyance and the denominator of which in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this 3(f) shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances. Notice of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassificationconsolidation, merger, salestatutory exchange, lease sale or conveyance as conveyance, and of said provisions so proposed to be made, shall be mailed to the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 20 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (g) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; or provided, however, that any adjustments which by reason of this (iig) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this (g)) later than such case, Ontro shall mail time as may be required in order to preserve the tax-free nature of a distribution to the Holder, at least 15 days prior thereto, a notice stating the date Holder of this Warrant or expected date on which a record is to be takenCommon Stock. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record All calculations under this Section 3 shall be entitled made to exchange their shares the nearest cent or to the nearest 1/100th of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actiona share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its shareholders shall not be taxable. (h) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of the Holder of this Warrant in accordance with this Section 3, the Company shall, at its own expense, within ten (10) days of such adjustment or modification, deliver to the holder of this Warrant a certificate of the principal financial officer of the Company setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or modification and the manner of computing the same. In addition, within thirty (30) days of the end of the Company's fiscal year next following any such adjustment or modification, the Company shall, at its own expense, deliver to the Holder of this Warrant a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the same information as required by such principal financial officer certificate. (i) If the Board of Directors of the Company shall declare any dividend or other distribution in cash with respect to the Common Stock, other than out of earned surplus, the Company shall mail notice thereof to the Holder not less than 10 days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution.

Protection Against Dilution. (a) If In the event the Company shall, at any time and or from time to time Ontro shall: (i) declare a dividend in after the date of issuance of this Warrant, issue or distribute to all of the holders of its shares of common stock to Common Stock evidence of its indebtedness, any other securities of the Company or any cash, property or other assets (any such event being herein called a holder of common stock or make a distribution in shares of common stock to holders of common stock"Special Dividend"), (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock Per Share Exercise Price shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then adjusted by multiplying the Per Share Exercise Price then in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the then Current Market Price (as defined in paragraph 3(k) below) of the Common Stock, less the Current Market Price of the Special Dividend issued or distributed in respect of one share of Common Stock, and the denominator of which shall be the Current Market Price of the Common Stock. Such adjustment shall be made successively whenever such a record date is fixed. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution unless such distribution is not ultimately made. (b) In case the Company shall hereafter (i) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of common its Common Stock any shares of capital stock outstanding immediately prior of the Company, the Per Share Exercise Price shall be adjusted to such Eventbe equal to a fraction, the numerator of which shall be the Aggregate Exercise Price and the denominator of which shall be the number of shares of common Common Stock or other capital stock outstanding immediately after such Event. Upon each adjustment in of the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased Company issuable upon exercise of this Warrant assuming this Warrant had been exercised immediately prior to such action. An adjustment made pursuant to this subsection 3(b) shall become effective immediately after the Warrants record date in the case of a dividend or distribution and shall be adjusted become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (i) Except as provided in subsections 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the nearest one-thousandth share) holders thereof to purchase Common Stock at a price per share (determined by multiplying dividing (i) the number total amount, if any, received or receivable by the Company in consideration of shares the issuance or sale of Ontro common stock which may be purchased such securities plus the consideration, if any, payable to the Company upon exercise of or conversion thereof (collectively, the Warrants immediately prior to such Event "Total Consideration") by (ii) the number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities) which is less than the then Current Market Price of the Common Stock (as defined below) but not below the current Per Share Exercise Price (which event is governed by subsection 3(c)(ii)), the Per Share Exercise Price shall be adjusted as of the date of such issuance or sale by multiplying the Per Share Exercise Price then in effect by a fraction, the numerator of which shall be (x) the exercise price in effect immediately prior to sum of (A) the number of shares of Common Stock outstanding on the record date of such Eventissuance or sale plus (B) the Total Consideration divided by the Current Market Price of the Common Stock, and the denominator of which shall be (y) the number of shares of Common Stock outstanding on the record date of such issuance or sale plus the maximum number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities. (ii) Except as provided in subsection 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the holders thereof to purchase Common Stock at a price per share (the "Issue Price"), (determined by dividing (i) the Total Consideration by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) which is less than the then current Per Share Exercise Price in effect on the record date of such issuance, the Per Share Exercise Price shall be adjusted to equal the Issue Price. (d) In the event of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise price in effect of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such Event. Notice reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of each such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment and each such readjustment shall be forthwith mailed made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(d) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 30 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iie) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the voluntary or involuntary dissolution, liquidation or winding up of Ontro; failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, and in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (f) Whenever the Per Share Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this Section 3, the number of shares of Common Stock underlying a Warrant shall simultaneously be adjusted to equal the number obtained by dividing the Aggregate Exercise Price by the adjusted Per Share Exercise Price. (g) No adjustment in the Per Share Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.01 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by reason of this subsection 3(g) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment. All calculations under this Section 3 shall be made to exchange their shares the nearest cent or to the nearest 1/100th of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actiona share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Exercise Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (h) Whenever the Per Share Exercise Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Exercise Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (i) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock, the Company shall mail notice thereof to the Holders of the Warrants not less than 30 days prior to the record date fixed for determining stock holders entitled to participate in such dividend or other distribution. (j) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Exercise Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (k) For the purpose of any computation under Section 3 above, the then Current Market Price per share (the "Current Market Price") shall be deemed to be the last sale price of the Common Stock on the trading day prior to such date or, in case no such reported sales take place on such day, the average of the last reported bid and asked prices of the Common Stock on such day, in either case on the principal national securities exchange on which the Common Stock is admitted to trading or listed, or if not listed or admitted to trading on any such exchange, the representative closing bid price of the Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), or other similar organization if NASDAQ is no longer reporting such information, or, if the Common Stock is not reported on NASDAQ, the high per share bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or if not so available, the fair market value of the Common Stock as determined by agreement between the Company's Board of Directors, on the one part, and the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants, on the second part. If the Board of Directors and such Holders fail to agree on the Current Market Price within 60 days of the date of the action giving rise to any adjustment pursuant to this Section 3, such Holders shall be entitled to appoint a firm of independent public accountants or appraisers of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to such Current Market Price on a basis consistent with the essential intent and principles established herein. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants or appraisers shall be borne by the Company.

Protection Against Dilution. (a) If at any time The Per-Share Exercise Price and the number of Warrant Shares purchasable upon the exercise of the Warrants shall be subject to adjustment from time to time Ontro as set forth in this Section 3. Whenever the Per-Share Exercise Price is adjusted by operation of this Section 3, the number of Warrant Shares to be delivered upon exercise of the Warrants shall be adjusted as provided in subsection (n) of this Section 3. (a) In case the Company shall: , while any of the Warrants are outstanding, (i) declare pay a dividend or make any other distribution with respect to shares of Common Stock in shares of common stock to a holder of common stock or make a distribution in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common stock of the Company (other than the reclassifications covered by subsection (d) of this Section 3), the Per-Share Exercise Price shall be changed into or become exchangeable for adjusted to be equal to a greater or lesser fraction, the numerator of which shall be the Aggregate Exercise Price and the denominator of which shall be the number of shares of common stockCommon Stock or other stock of the Company that the Holder would have owned immediately following such action had such Warrant been exercised immediately prior thereto or, then in the Exercise Price in effect case of a dividend, distribution, subdivision, combination or reclassification with respect to which a record date has been established, prior to such record date. An adjustment made pursuant to this subsection (a) shall be made immediately prior to the opening of business on the record day following (x) the date of such the payment of the dividend or distribution (retroactive to the record date) or (y) the effective date in the case of such a subdivision, combination or reclassification (individually an retroactive to the record date, if any). If the Board of Directors shall declare any dividend or distribution or resolve to take any action referred to in this subsection (a), it shall provide written notice thereof to the Holder not less than ten (10) days prior to the record date fixed for determining the stockholders entitled to participate therein. (b) In case the Company shall, while any of the Warrants are outstanding, issue rights or warrants to purchase, or securities convertible into or exchangeable for, Common Stock ("Event" and collectively the "EventsRights") to any holders of its outstanding shares of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for, purchase, convert or exchange shares of Common Stock at a price per share less than the current market price per share of Common Stock (as determined pursuant to subsection (e) of this Section 3) on the record date mentioned below, provided the purchase price is less than the Per-Share Exercise Price theretofore in effect, the Per-Share Exercise Price shall be adjusted, or further adjusted, to a price (to adjusted so that the nearest cent) same shall equal the amount determined by multiplying (i) the exercise price of the Warrant(s) Per-Share Exercise Price theretofore in effect immediately prior to such Event by (ii) a fraction, fraction the numerator of which shall be the number of shares of common stock Common Stock outstanding immediately prior to on the date of issuance of such EventRights plus the number of shares which the aggregate offering price would purchase at such current market price, and the denominator of which shall be the number of shares of common stock Common Stock outstanding immediately after on the date of issuance of such EventRights plus the number of additional shares of Common Stock offered for subscription or purchase. Upon each adjustment "Aggregate offering price," as used in the preceding sentence, shall mean the amount received or receivable by the Company in consideration of the issuance or sale of Rights plus any additional consideration payable to the Company upon exercise price resulting from an Eventthereof, in each case with reference to the total number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Common Stock offered for subscription or purchase. Such adjustment shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants made immediately prior to such Event the opening of business on the day following the date of issuance of Rights, retroactive to the record date for the determination of stockholders entitled to receive Rights. (c) In case the Company shall, by dividend or otherwise, distribute to any holders of its outstanding shares of Common Stock, evidences of its indebtedness, shares of any class or series of its stock, assets, securities convertible into or exchangeable for any of its stock or rights or warrants to subscribe for or purchase any of its securities (iiexcluding any Rights referred to in subsection (b) of this Section 3, any dividend or other distribution paid exclusively in cash and any dividend or other distribution referred to in subsection (a) of this Section 3), the Per-Share Exercise Price shall be reduced so that the same shall equal the price determined by multiplying the Per-Share Exercise Price theretofore in effect by a fraction, fraction the numerator of which shall be the exercise current market price (determined as provided in effect immediately prior subsection (e) of this Section 3) per share of Common Stock on the record date referred to such Eventbelow less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive), on the record date referred to below, of the portion of the evidences of indebtedness, shares of stock, assets, convertible or exchangeable securities, rights or warrants (including fractions) so distributed with respect to each share of Common Stock and the denominator of which shall be such current market price per share of Common Stock. Such adjustment shall be made immediately prior to the exercise price opening of business on the day following the date on which any such distribution is made, retroactive to the record date for the determination of stockholders entitled to receive such distribution. In the event that no such dividend or other distribution is so paid or made, the Per-Share Exercise Price shall again be adjusted to be the Per-Share Exercise Price which would then be in effect immediately after if such Eventdividend or other distribution had not occurred. Notice If the Board of each such adjustment and each such readjustment shall be forthwith mailed Directors determines the fair market value of any distribution for purposes of this subsection (c) by reference to the Holder setting forth actual or when-issued trading market for any securities comprising such adjustments or readjustments and distribution, it must in doing so consider the facts and calculations thereof prices in reasonable detail. Any dividend paid or distributed upon such market over the common stock same period used in stock computing the current market price per share of any other class Common Stock (determined as provided in subsection (e) of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereofthis Section 3). (bd) In case: (i) the case of any capital reorganization of the Company or reclassification of the Common Stock, or any consolidation or merger to which the Company is a distribution party other than a merger or consolidation in which the Company is the continuing corporation, or in the form case of stock any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had the Holder this Warrant been exercised the Warrants immediately prior to any the effective date of such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classificationreorganization, reclassification or other reorganization of the capital stock of Ontroconsolidation, consolidation or merger of Ontro with or into another corporationmerger, or the salestatutory exchange, lease sale or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro if necessary, appropriate adjustment shall mail be made in the application of the provisions set forth in this Section 3 with respect to the Holder, at least 15 days prior thereto, a notice stating rights and interests thereafter of the date or expected date on which a record is Holder to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be taken. Such notice shall also specify the date or expected date, if any is to be fixedmade applicable, as of which holders of common stock of record shall be entitled nearly as may reasonably be, in relation to exchange their any shares of common stock for or other securities or other property thereafter deliverable upon on the exercise of the Warrant. Notice of any such classificationreorganization, reclassification, reorganization, consolidation, merger, conveyanceexchange, dissolutionsale or conveyance shall be mailed to the Holder not less than ten (10) days prior to such event. The above provisions of this subsection (d) shall similarly apply to successive reorganizations, liquidationreclassifications, winding up consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of the Warrant to be responsible for all of the agreements and obligations of the Company hereunder. (e) For the purpose of any computation under subsection (b) or (c) of this Section 3, the current market price per share of Common Stock on any date in question shall be deemed to be the average of the daily Closing Prices for the five (5) Trading Day period ending on the earlier of the day in question and, if applicable, the last Trading Day before the "ex" date with respect to the issuance or distribution requiring such computation; provided, however, that if more than one event occurs that would require an adjustment pursuant to subsections (a) through (d) of this Section 3, inclusive, the Board of Directors shall in good faith make such adjustments to the Closing Prices during such five (5) Trading Day period as it reasonably deems appropriate actionto effectuate the intent of the adjustment provisions in this Section 3, in which case any such determination by the Board of Directors shall be conclusive. For purposes of this paragraph, the term "ex" date means the first date on which the shares of Common Stock trade regular way, without the right to receive such issuance or distribution, on the New York Stock Exchange or on such successor securities exchange as the case shares of Common Stock may bebe listed on or in the relevant market from which the Closing Prices were obtained.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its Common Stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stock, Common Stock into a greater number of shares or (iii) combine its outstanding shares of common stockCommon Stock into a smaller number of shares (each of (i) through (iii) an "Action"), or (iv) otherwise effect a re-capitalization of such character that then the shares of common stock Per Share Exercise Price shall be changed into or become exchangeable for adjusted to be equal to the product of (i) a greater or lesser fraction, the numerator of which is the number of shares of common stockCommon Stock outstanding immediately prior to such Action and the denominator of which is the number of shares of Common Stock outstanding immediately following such Action, then multiplied by (ii) the Per Share Exercise Price in effect on immediately prior to such Action. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an "Event" and collectively b) Whenever the "Events") Per Share Exercise Price is adjusted pursuant to subsection 3(a), the number of Warrant Shares issuable upon payment of the Aggregate Exercise Price shall be adjusted, or further adjusted, adjusted to a price (be equal to the nearest cent) determined by multiplying (i) the exercise price product of the Warrant(s) in effect number of Warrant Shares issuable upon payment of the Aggregate Exercise Price immediately prior to such Event adjustment multiplied by (ii) a fraction, the numerator of which shall be the number of shares of common stock outstanding Aggregate Exercise Price payable immediately prior to such Event, adjustment and the denominator of which shall be the number of shares of common stock outstanding Aggregate Exercise Price payable immediately after such Event. Upon each adjustment. (c) In the event of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in (d) No adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Exercise Price shall be adjusted (required unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; provided, however, that any adjustments which by reason of this Subsection 3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 3 shall be made to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed cent or to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock nearest 1/100th of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall includeshare, as the case may be, for . Anything in this Section 3 to the purposes hereofcontrary notwithstanding, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record Company shall be entitled to exchange their make such reductions in the Per Share Exercise Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (e) Whenever the Per Share Exercise Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Chief Financial Officer, or equivalent officer, of the Company shall prepare a certificate setting forth the Per Share Exercise Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holder. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of common two or more classes of capital stock for securities or shares of Common Stock and other property deliverable upon capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such classificationadjustment) shall (g) Notwithstanding anything else contained herein to the contrary, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, the Per Share Exercise Price shall not be decreased to be equal to an amount less than the authorized par value of the Company as in effect at the case may betime of the exercise of this Warrant under Section 1 hereof.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro after the date of this Warrant, the Company shall: (i) declare a dividend in shares of common stock , for no consideration, issue or distribute to a holder of common stock or make a distribution in shares of common stock to the holders of common stock, (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock evidences of its indebtedness, then any other securities of the Exercise Price in effect on the record date of such dividend Company or distribution any cash, property or the effective date of such other assets (excluding a subdivision, combination or reclassification reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(b), (individually an excluding cash dividends or cash distributions paid out of net profits legally available therefore if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend", the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the thirty consecutive business days, immediately prior to the record date for the applicable Special Dividend of the daily 4:00 PM closing bid price of the Common Stock as reported by the NASDAQ or OTCBB system) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, securities or property, or other assets issued or distributed in such Event, Special Dividend applicable to one share of Common Stock and the denominator of which shall be such then current market price per share of Common Stock. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date of any such Special Dividend. b) In case the Company shall hereafter (i) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification, reorganization, recapitalization or similar transaction of the Company of its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the Holder of any Warrant upon the exercise hereof shall be entitled to receive the number of shares of common Common Stock or other capital stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock Company which may be purchased upon exercise of he would have owned had he exercised the Warrants immediately prior thereto. An adjustment made pursuant to such Event by (iithis Subsection 3(b) shall become effective immediately after the record date in the case of a fractiondividend or distribution, and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this Subsection 3(b), the numerator Holder of which any Warrant thereafter surrendered for exercise shall become entitled to receive shares of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares of such classes or capital stock or shares of Common Stock and other capital stock. c) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive upon exercise price in effect of such Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Eventreorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and the denominator of which in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or be, in relation to any shares of stock or other securities or property thereafter deliverable on the conversion of this Warrant. The above provisions of this Subsection 3(c) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the conversion of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 20 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. d) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share of Common Stock; or (iiprovided, however, that any adjustments which by reason of this Subsection 3(d) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(d)) not later than such case, Ontro shall mail time as may be required in order to preserve the tax-free nature of a distribution to the HolderHolder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent. Anything in this Section 3 to the contrary notwithstanding, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record Company shall be entitled to exchange their make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of common rights to purchase stock or securities convertible or exchangeable for securities stock hereafter made by the Company to its shareholders shall not be taxable. e) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. f) If the Board of Directors of the Company shall declare any dividend or other property deliverable upon distribution with respect to the Common Stock, other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than 20 days prior to the record date fixed for determining shareholders entitled to participate in such classificationdividend or other distribution. g) The Board of Directors may, reclassificationat its discretion from time to time, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up reduce the Per Share Warrant Price or any other appropriate action, as extend the case outside date prior to which this Warrant may bebe exercisable.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: (i) declare a dividend in shares after the date of common stock the Warrant, the Company shall issue or distribute to a holder of common stock or make a distribution in shares of common stock to the holders of common stock, (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock evidence of its indebtedness, then any other securities of the Exercise Price in effect on the record date of such dividend Company or distribution any cash property or the effective date of such other assets (excluding a subdivision, combination or reclassification reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(b), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor in the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, which is equivalent to not more than 5% of the Company's net worth) (individually an any such non-excluded event being herein called a "Event" and collectively SPECIAL DIVIDEND"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the then current Market Price of the Common Stock less the fair market value (as determined in good faith by the Company's Board of Directors) of the evidence of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be the then current Market Price of the Common Stock. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date of any such Special Dividend. (b) In case the Company shall hereafter (i) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a great number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of common its Common Stock any shares of capital stock outstanding immediately prior of the Company, the Per Share Warrant Price shall be adjusted to such Eventbe equal to a fraction, the numerator of which shall be the Aggregate Warrant Price and the denominator of which shall be the number of shares of common Common Stock or other capital stock outstanding of the Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after such Event. Upon each adjustment the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (c) Except as provided in Subsections 3(a) and 3(d), in case the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock, or any rights, options or warrants to purchase Common Stock or any securities convertible into Common Stock, in each case for a price per share or entitling the holders thereof to purchase Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such securities plus the total consideration, if any, payable to the Company upon exercise price resulting from an Event, or conversion thereof (the "TOTAL CONSIDERATION") by (ii) the number of additional shares of Ontro common stock which may be purchased Common Stock issuable upon exercise or conversion of such securities) less than the Warrants then current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may be purchased upon exercise Common Stock outstanding on the date of such issuance or sale multiplied by the Warrants immediately prior to such Event Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (d) No adjustment in the Per Share Warrant Price shall be required in the case of the issuance by the Company of (a) Common Stock pursuant to the exercise of any Warrant, (b) options or warrants to purchase Common Stock (including the exercise thereof) issued or sold to employees, officers or directors of or consultants and advisers to the Company or any subsidiary thereof, and (c) shares of Common Stock issued or sold pursuant to stock purchase or stock option plans or other similar arrangements that are approved by the Company's Board of Directors. (e) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a fractionparty other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the numerator Holder of which this Warrant shall be have the right thereafter to receive on the exercise price in effect of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Eventreorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and the denominator of which in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares or other securities or property thereafter deliverable on the exercise price in effect immediately after such Eventof this Warrant. Notice The above provisions of each such adjustment and each such readjustment this Subsection 3(e) shall be forthwith mailed similarly apply to the Holder setting forth such adjustments successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or readjustments and the facts and calculations thereof in reasonable detailconveyances. Any dividend paid or distributed upon the common stock in stock The issuer of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the agreements and obligations of the Company hereunder. Notice of any other corporation such reorganization, reclassification, consolidation, merger, statutory exchange, sale or other entity conveyance and of said provisions so proposed to be made, shall be made or paid by Ontro on, or with respect to, mailed to the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 30 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iif) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the voluntary or involuntary dissolution, liquidation or winding up of Ontro; failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, and in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (g) No adjustment in the Per Share Warranty Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.05 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by -------- ------- reason of this Subsection 3(g) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment; provided, further, -------- ------- however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(g)) not later than such times as may be required in order to exchange their shares preserve the tax-free nature of common stock for securities a distribution to the Holder of this Warrant or other property deliverable Common Stock issuable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up the exercise hereof. All calculations under this section 3 shall be made to the nearest cent or any other appropriate actionto the nearest 1/100th of share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (h) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (i) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock other than a cash distribution out of earned surplus, the Company shall mail notice thereof to the Holders of the Warrants not less than 15 days prior to the record date fixed for determining stockholders entitled to participate in such dividend or other distribution. (j) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the Effective Date, the Company shall distribute to the holders of the Common Stock (i) declare securities, other than shares of Common Stock, or (ii) property, excluding cash, without payment therefore, with respect to the Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and properties which the Holder would have held on the date of such exercise if, on the Effective Date the Holder had been the holder of record of the number of shares of Common Stock subscribed for upon such exercise and, during the period from the Effective Date to and including the date of such exercise, had retained such shares and securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed by the Company to the Holder. (b) In case the Company shall subsequent to the Effective Date (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stockCommon Stock into a smaller number of shares, or (iv) otherwise issue by reclassification of its Common Stock any shares of capital stock of the Company, the Exercise Price in effect a re-capitalization of immediately prior to such character action shall be adjusted so that the shares Holder of common stock shall any Warrant surrendered for exercise immediately thereafter would be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common Common Stock or other capital stock of the Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this subparagraph 3(b) shall become effective immediately after the record date in the case of any such dividend or distribution and shall become effect- tive immediately after the effective date in the case of a subdivision, combination, reconstruction or reclassification. If, as a result of an adjustment made pursuant to this subparagraph 3(b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination, providing the same is applied equally to all holders of Common Stock, shall be conclusive and shall be described in a written notice to the Holders of the Warrants promptly after such adjustment) shall determine the allocation between or among shares of such classes of capital stock or shares of Common Stock and other capital stock. (c) In case the Company shall subsequent to the Effective Date issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (the "Price", as defined) less than the then the current Exercise Price in effect on the record date of such dividend issuance or distribution or sale, the effective Exercise Price shall be adjusted as of the date of such subdivisionissuance or sale so that the same shall equal to the Price (subject to further adjustment as herein provided). For purposes of this subparagraph 3(c), combination or reclassification (individually an the term "EventPrice" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to and mean the nearest cent) amount determined by multiplying dividing (i) the exercise price total amount, if any, received or receivable by the Company in consideration of the Warrant(s) in effect immediately prior issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to such Event the Company upon exercise or conversion thereof (the "Total Consideration"), by (ii) a fraction, the numerator of which shall be the number of additional shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share Common Stock issuable upon exercise or conversion of the Warrants such securities. Any property (other than cash) received in consideration for, or exercise of, any such rights, options, warrants or convertible securities shall be replaced by, and/or shall includevalued at fair market value on the date of receipt by the Company, as determined by the case may be, for the purposes hereof, the stock or property issued or distributed in respect Board of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereofDirectors. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall distribute to the holders of its outstanding Common Stock, (i) declare a dividend in securities, other than shares of common stock Common Stock, or (ii) property, other than cash not out of earned surplus, without payment therefore, then and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to a received the securities and property which the Holder would hold on the date of such exercise if, on the date of this Warrant the Holder had been the holder of common stock record of the number of shares of the Common Stock subscribed for upon such exercised and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay dividend or make a distribution of its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Company, the Per Share Price Warrant Price and Warrant Shares in effect immediately prior to such Event by (ii) a fraction, the numerator of which action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of common Common Stock or other capital stock of the Company which he would have owned or been entitled to received at Aggregate Warrant Price he would have paid or have been entitled to pay immediately following the happening of any of the events described above had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this (b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this (b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital Stock of the Company, Board of Directors (whose reasonable determination shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determined the allocation of the adjusted Per Share Warrant Price between or among shares of such classes or capital stock or shares of Common Stock and other capital stock. (c) Except as provided in 3(e), in case the company shall hereafter issue or sell any shares of Common Stock for a consideration Per Share Warrant Price in effect immediately prior to such issuance or sale, the Per Share Warrant Price shall be adjusted as of the date such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number shares of Common Stock outstanding immediately prior to such Event, and issuance or sale multiplied by the denominator of which shall be Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of common stock Common Stock outstanding immediately after issuance or sale. (d) Except as provided in 3(e) in case the Company shall hereafter issue or sell any rights, option warrants or securities convertible into Common Stock entitling the holders thereof to purchase the Common Stock or to convert such Event. Upon each adjustment securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise price resulting from an Event, or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Ontro common stock which may be purchased Common Stock issuable upon exercise or conversion of such securities) less than the Warrants then Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number shares of Common Stock outstanding on the of such issuance or sale multiplied by Per Share Price plus (B) the total Consideration by (ii) the number of shares of Ontro common stock Common Stock outstanding on the date such issuance or sale plus maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance of Common Stock upon the exercise of options which may be purchased upon granted in the ordinary course of business under the Company's official employee stock option plan as in effect on the date hereof or (ii) the issuance of shares pursuant to the exercise of this Warrant. (f) In case of any consolidation or merger to which the Warrants Company is a party other than a merger or consolidation in which the Company's is the continuing corporation, or in case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another entity (including any exchange effected in connection with a merger of any other corporation with the Company), the Holder of this Warrant shall have the right thereafter convert such Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to received immediately after such consolidation, merger, statutory, exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionconsolidation, the numerator of which merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustments shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that provisions set forth in Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this 3(f) shall similarly apply to successive consolidations, mergers statutory exchanges, sales or conveyances. Notice of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassificationconsolidation, merger, salestatutory exchange, lease sale or conveyance as conveyance, and of said provisions so propose to be made, shall be mailed to the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than twenty (20) days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or pr substantially all of the assets of Ontro; or the Company for a consideration consisting primarily of securities shall be deemed a consolidation merger for the foregoing purposes. (iig) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the voluntary rights of the Holder of this Warrant in accordance with this Section 3, Company shall, at its own expense, within ten (10) days of such adjustment or involuntary dissolutionmodification, liquidation deliver to the holder of this Warrant a certificate of the principal financial officer of the Company setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or winding up the effect of Ontro; thensuch modification, a brief statement of the facts requiring such adjustment or modification and in the manner of computing the same. In addition, within thirty (30) days of the end of the Company's fiscal year next following any such caseadjustment or modification, Ontro the Company shall, at its own expense, deliver to the Holder of this Warrant a certificate of a firm of independent public accountants of recognized standing reasonably selected by the Board of Directors (which may be the regular auditors of the Company) setting forth the same information as required by such principal financial officer certificate. (h) If the Board of Directors of the Company shall declare any dividend or other distribution in cash with respect to the Common Stock, other than out of earned surplus, the Company shall mail notice thereof to the Holder, at least 15 Holder not less than twenty (20) days prior thereto, a notice stating to the record date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be fixed for determining shareholders entitled to exchange their shares of common stock for securities participate in such dividend or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may bedistribution.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively SPECIAL DIVIDEND"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the thirty consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by NASDAQ, or if not then publicly traded, the fair market price as determined by the Company's Board of Directors) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be the number such then current market price per share of shares of common stock outstanding Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock record date of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereofSpecial Dividend. (c) In case: (i) case of any classificationcapital reorganization or reclassification, reclassification or other reorganization of the capital stock of Ontro, any consolidation or merger of Ontro with to which the Company is a party other than a merger or into another consolidation in which the Company is the continuing corporation, or the sale, lease in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(c) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than 15 days prior to such event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iid) If at any time or from time to time the Company shall take any action affecting its Common Stock or any other capital stock of the voluntary or involuntary dissolutionCompany, liquidation or winding up not otherwise described in any of Ontro; the foregoing subsections of this Section 3, then, if the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (e) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.05 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by reason of this Subsection 3(e) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment; provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(e)) not later than such time as may be required in order to exchange their shares preserve the tax-free nature of common stock for securities a distribution to the Holder of this Warrant or other property deliverable Common Stock issuable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or any other appropriate actionto the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its shareholders shall not be taxable. (f) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall cause its Chief Financial Officer to set forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (g) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock.

Protection Against Dilution. (a) If In the event the Company shall, at any time and or from time to time Ontro shall: (i) declare a dividend in after the date of issuance of this Warrant, issue or distribute to all of the holders of its shares of common stock to Common Stock evidence of its indebtedness, any other securities of the Company or any cash, property or other assets (any such event being herein called a holder of common stock or make a distribution in shares of common stock to holders of common stock"Special Dividend"), (ii) subdivide its outstanding shares of common stock, (iii) combine its outstanding shares of common stock, or (iv) otherwise effect a re-capitalization of such character that the shares of common stock Per Share Exercise Price shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then adjusted by multiplying the Per Share Exercise Price then in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the then Current Market Price (as defined in paragraph 3(k) below) of the Common Stock, less the Current Market Price of the Special Dividend issued or distributed in respect of one share of Common Stock, and the denominator of which shall be the Current Market Price of the Common Stock. Such adjustment shall be made successively whenever such a record date is fixed. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution unless such distribution is not ultimately made. (b) In case the Company shall hereafter (i) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares or (iv) issue by reclassification of common its Common Stock any shares of capital stock outstanding immediately prior of the Company, the Per Share Exercise Price shall be adjusted to such Eventbe equal to a fraction, the numerator of which shall be the Aggregate Exercise Price and the denominator of which shall be the number of shares of common Common Stock or other capital stock outstanding immediately after such Event. Upon each adjustment in of the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased Company issuable upon exercise of this Warrant assuming this Warrant had been exercised immediately prior to such action. An adjustment made pursuant to this subsection 3(b) shall become effective immediately after the Warrants record date in the case of a dividend or distribution and shall be adjusted become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (i) Except as provided in subsections 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the nearest one-thousandth share) holders thereof to purchase Common Stock at a price per share (determined by multiplying dividing (i) the number total amount, if any, received or receivable by the Company in consideration of shares the issuance or sale of Ontro common stock which may be purchased such securities plus the consideration, if any, payable to the Company upon exercise of or conversion thereof (collectively, the Warrants immediately prior to such Event "Total Consideration") by (ii) the number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities) which is less than the then Current Market Price of the Common Stock (as defined below) but not below the current Per Share Exercise Price (which event is governed by subsection 3(c)(ii)), the Per Share Exercise Price shall be adjusted as of the date of such issuance or sale by multiplying the Per Share Exercise Price then in effect by a fraction, the numerator of which shall be (x) the exercise price in effect immediately prior to sum of (A) the number of shares of Common Stock outstanding on the record date of such Eventissuance or sale plus (B) the Total Consideration divided by the Current Market Price of the Common Stock, and the denominator of which shall be (y) the number of shares of Common Stock outstanding on the record date of such issuance or sale plus the maximum number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities. (ii) Except as provided in subsection 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the holders thereof to purchase Common Stock at a price per share (the "Issue Price"), (determined by dividing (i) the Total Consideration by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) which is less than the then current Per Share Exercise Price in effect on the record date of such issuance, the Per Share Exercise Price shall be adjusted to equal the Issue Price. (d) In the event of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise price in effect of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such Event. Notice reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of each such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment and each such readjustment shall be forthwith mailed made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter corres pondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(e) shall similarly apply to successive reorganizations, reclassifica tions, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 30 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iie) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the voluntary or involuntary dissolution, liquidation or winding up of Ontro; failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, and in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (f) Whenever the Per Share Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this Section 3, the number of shares of Common Stock underlying a Warrant shall simultaneously be adjusted to equal the number obtained by dividing the Aggregate Exercise Price by the adjusted Per Share Exercise Price. (g) No adjustment in the Per Share Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.01 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by reason of this subsection 3(g) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment. All calculations under this Section 3 shall be made to exchange their shares the nearest cent or to the nearest 1/100th of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actiona share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Exercise Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (h) Whenever the Per Share Exercise Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Exercise Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (i) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock, the Company shall mail notice thereof to the Holders of the Warrants not less than 30 days prior to the record date fixed for determining stockholders entitled to participate in such dividend or other distribution. (j) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Exercise Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (k) For the purpose of any computation under Section 3 above, the then Current Market Price per share (the "Current Market Price") shall be deemed to be the last sale price of the Common Stock on the trading day prior to such date or, in case no such reported sales take place on such day, the average of the last reported bid and asked prices of the Common Stock on such day, in either case on the principal national securities exchange on which the Common Stock is admitted to trading or listed, or if not listed or admitted to trading on any such exchange, the representative closing bid price of the Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), or other similar organization if NASDAQ is no longer reporting such information, or, if the Common Stock is not reported on NASDAQ, the high per share bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or if not so available, the fair market value of the Common Stock as determined by agreement between the Company's Board of Directors, on the one part, and the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants, on the second part. If the Board of Directors and such Holders fail to agree on the Current Market Price within 60 days of the date of the action giving rise to any adjustment pursuant to this Section 3, such Holders shall be entitled to appoint a firm of independent public accountants or appraisers of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to such Current Market Price on a basis consistent with the essential intent and principles established herein. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants or appraisers shall be borne by the Company.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the Effective Date, the Company shall distribute to the holders of the Common Stock (i) declare securities, other than shares of Common Stock, or (ii) property, excluding cash, without payment therefore, with respect to the Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and properties which the Holder would have held on the date of such exercise if, on the Effective Date the Holder had been the holder of record of the number of shares of Common Stock subscribed for upon such exercise and, during the period from the Effective Date to and including the date of such exercise, had retained such shares and securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed by the Company to the Holder. (b) In case the Company shall subsequent to the Effective Date (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stockCommon Stock into a smaller number of shares, or (iv) otherwise issue by reclassification of its Common Stock any shares of capital stock of the Company, the Exercise Price in effect a re-capitalization of immediately prior to such character action shall be adjusted so that the shares Holder of common stock shall any Warrant surrendered for exercise immediately thereafter would be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common Common Stock or other capital stock of the Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this subparagraph 3 (b) shall become effective immediately after the record date in the case of any such dividend or distribution and shall become effect- tive immediately after the effective date in the case of a subdivision, combination, reconstruction or reclassification. If, as a result of an adjust- ment made pursuant to this subparagraph 3(b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination, providing the same is applied equally to all holders of Common Stock, shall be conclusive and shall be described in a written notice to the Holders of the Warrants promptly after such adjustment) shall determine the allocation between or among shares of such classes of capital stock or shares of Common Stock and other capital stock. (c) In case the Company shall subsequent to the Effective Date issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (the "Price", as defined) less than the then the current Exercise Price in effect on the record date of such dividend issuance or distribution or sale, the effective Exercise Price shall be adjusted as of the date of such subdivisionissuance or sale so that the same shall equal to the Price (subject to further adjustment as herein provided). For purposes of this subparagraph 3(c), combination or reclassification (individually an the term "EventPrice" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to and mean the nearest cent) amount determined by multiplying dividing (i) the exercise price total amount, if any, received or receivable by the Company in consideration of the Warrant(s) in effect immediately prior issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to such Event the Company upon exercise or conversion thereof (the "Total Consideration"), by (ii) a fraction, the numerator of which shall be the number of additional shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share Common Stock issuable upon exercise or conversion of the Warrants such securities. Any property (other than cash) received in consideration for, or exercise of, any such rights, options, warrants or convertible securities shall be replaced by, and/or shall includevalued at fair market value on the date of receipt by the Company, as determined by the case may be, for the purposes hereof, the stock or property issued or distributed in respect Board of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereofDirectors. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) 6.1 If at any time and from time to time Ontro shall: the Company shall (i) declare a dividend in shares of common stock to a holder of common stock or make a distribution in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock, (iii) combine its outstanding shares of common stock, Common Stock or (iv) otherwise effect a re-capitalization recapitalization of such character that the shares of common stock Common Stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Exercise Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number of shares of common stock Common Stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock Common Stock outstanding immediately after such Event. Upon each adjustment in the exercise price Exercise Price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Warrant Shares shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock Warrant Shares for which may be purchased upon exercise of the Warrants Warrant was exercisable immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price Exercise Price in effect immediately prior to such Event, and the denominator of which shall be the exercise price Exercise Price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock Common Stock in stock of any other class of securities convertible into shares of common stock Common Stock shall be treated as a dividend paid in common stock Common Stock to the extent that shares of common stock Common Stock are to be issued issuable upon the conversion thereof. (b) 6.2 In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro the Company on, or with respect to, the then outstanding shares of common stockCommon Stock, (ii) Ontro the Company shall effect a re-capitalization recapitalization of such character that the shares of common stock Common Stock will be changed into or become exchangeable for shares of common stock Common Stock with a different par value or no par value, or (iii) Ontro the Company (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing distribution such stock or property to its shareholders, or (iv) the Board of Directors of the Company shall declare any dividend or other distribution in cash or any evidence of the Company's indebtedness (other than convertible securities) with respect to the shares of Common Stock, each share of Common Stock issuable upon exercise of the Warrants this Warrant shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock stock, property, cash or property evidence of indebtedness issued or distributed in respect of each share of common stock Common Stock upon such re-capitalizationrecapitalization, reclassification, merger, sale, lease lease, conveyance or conveyance distribution as the Holder would have been entitled to had the Holder exercised the Warrants this Warrant immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively SPECIAL DIVIDEND"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the thirty consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by NASDAQ, or if not then publicly traded, the fair market price as reasonably determined by the Company's Board of Directors) less the fair market value (as reasonably determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be the number such then current market price per share of shares of common stock outstanding Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock record date of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereofSpecial Dividend. (c) In case: (i) case of any classificationcapital reorganization or reclassification, reclassification or other reorganization of the capital stock of Ontro, any consolidation or merger of Ontro with to which the Company is a party other than a merger or into another consolidation in which the Company is the continuing corporation, or the sale, lease in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(c) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than thirty days prior to such event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (d) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (e) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; provided, however, that any adjustments which by reason of this Subsection 3(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(e)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (f) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall cause the Chief Financial Officer of the Company to prepare a certificate setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. At Holder's option, Xxxxxx may request that the certificate prepared by the Chief Financial Officer be confirmed and verified, in writing, by independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company). The cost of such review shall be paid by Xxxxxx unless, as a result of the review, adjustments are made in favor of Xxxxxx, in which case, the cost of the review shall be paid by the Company. (g) If the Board of Directors of the Company shall (i) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend subject to the first parenthetical in Subsection 3(b), (ii) offer to the holders of the voluntary shares of Common Stock any additional shares of Common Stock, any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (h) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may becapital stock.

Protection Against Dilution. (a) If at any time The Per-Share Exercise Price and the number of Warrant Shares purchasable upon the exercise of the Warrants shall be subject to adjustment from time to time Ontro as set forth in this Section 3. Whenever the Per-Share Exercise Price is adjusted by operation of this Section 3, the number of Warrant Shares to be delivered upon exercise of the Warrants shall be adjusted as provided in subsection (n) hereof. (a) In case the Company shall: , while any of the Warrants are outstanding, (i) declare pay a dividend or make any other distribution with respect to shares of Common Stock in shares of common stock to a holder of common stock or make a distribution in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common stock of the Company (other than the reclassifications covered by subsection (d)), the Per-Share Exercise Price shall be changed into or become exchangeable for adjusted to be equal to a greater or lesser fraction, the numerator of which shall be the Aggregate Exercise Price and the denominator of which shall be the number of shares of common stockCommon Stock or other stock of the Company that the Holder would have owned immediately following such action had such Warrant been exercised immediately prior thereto or, then in the Exercise Price in effect case of a dividend, distribution, subdivision, combination or reclassification with respect to which a record date has been established, prior to such record date. An adjustment made pursuant to this subsection shall be made immediately prior to the opening of business on the record day following (x) the date of such the payment of the dividend or distribution (retroactive to the record date) or (y) the effective date in the case of such a subdivision, combination or reclassification (individually an retroactive to the record date, if any). If the Board of Directors shall declare any dividend or distribution or resolve to take any action referred to in this subsection, it shall provide written notice thereof to the Holder not less than 10 days prior to the record date fixed for determining the stockholders entitled to participate therein. (b) In case the Company shall, while any of the Warrants are outstanding, issue rights or warrants to purchase, or securities convertible into or exchangeable for, Common Stock ("Event" and collectively the "EventsRights") to any holders of its outstanding shares of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for, purchase, convert or exchange shares of Common Stock at a price per share less than the current market price per share of Common Stock (as determined pursuant to subsection (e) below) on the record date mentioned below, provided the purchase price is less than the Per-Share Exercise Price theretofore in effect, the Per-Share Exercise Price shall be adjusted, or further adjusted, to a price (to adjusted so that the nearest cent) same shall equal the amount determined by multiplying (i) the exercise price of the Warrant(s) Per-Share Exercise Price theretofore in effect immediately prior to such Event by (ii) a fraction, fraction the numerator of which shall be the number of shares of common stock Common Stock outstanding immediately prior to on the date of issuance of such EventRights plus the number of shares which the aggregate offering price would purchase at such current market price, and the denominator of which shall be the number of shares of common stock Common Stock outstanding immediately after on the date of issuance of such EventRights plus the number of additional shares of Common Stock offered for subscription or purchase. Upon each adjustment "Aggregate offering price," as used in the preceding sentence, shall mean the amount received or receivable by the Company in consideration of the issuance or sale of Rights plus any additional consideration payable to the Company upon exercise price resulting from an Eventthereof, in each case with reference to the total number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Common Stock offered for subscription or purchase. Such adjustment shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants made immediately prior to such Event the opening of business on the day following the date of issuance of Rights, retroactive to the record date for the determination of stockholders entitled to receive Rights. (c) In case the Company shall, by dividend or otherwise, distribute to any holders of its outstanding shares of Common Stock evidences of its indebtedness, shares of any class or series of its stock, assets, securities convertible into or exchangeable for any of its stock or rights or warrants to subscribe for or purchase any of its securities (iiexcluding any Rights referred to in subsection (b), any dividend or other distribution paid exclusively in cash and any dividend or other distribution referred to in subsection (a) of this Section 3), the Per-Share Exercise Price shall be reduced so that the same shall equal the price determined by multiplying the Per-Share Exercise Price theretofore in effect by a fraction, fraction the numerator of which shall be the exercise current market price (determined as provided in effect immediately prior subsection (e)) per share of Common Stock on the record date referred to such Eventbelow less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive unless the Holder shall, within five (5) days of receipt of the Adjustment Certificate (as defined below) setting forth the adjustment made, request that the determination be made pursuant to the Appraisal Procedures), on the record date referred to below, of the portion of the evidences of indebtedness, shares of stock, assets, convertible or exchangeable securities, rights or warrants (including fractions) so distributed with respect to each share of Common Stock and the denominator of which shall be such current market price per share of Common Stock. Such adjustment shall be made immediately prior to the exercise price opening of business on the day following the date on which any such distribution is made, retroactive to the record date for the determination of stockholders entitled to receive such distribution. In the event that no such dividend or other distribution is so paid or made, the Per-Share Exercise Price shall again be adjusted to be the Per-Share Exercise Price which would then be in effect immediately after if such Eventdividend or other distribution had not occurred. Notice If the Board of each such adjustment and each such readjustment shall be forthwith mailed Directors determines the fair market value of any distribution for purposes of this subsection (c) by reference to the Holder setting forth actual or when-issued trading market for any securities comprising such adjustments or readjustments and distribution, it must in doing so consider the facts and calculations thereof prices in reasonable detail. Any dividend paid or distributed upon such market over the common stock same period used in stock computing the current market price per share of any other class of securities convertible into shares of common stock shall be treated Common Stock (determined as a dividend paid provided in common stock to the extent that shares of common stock are to be issued upon the conversion thereofsubsection (e)). (bd) In case: (i) the case of any capital reorganization of the Company or reclassification of the Common Stock, or any consolidation or merger to which the Company is a distribution party other than a merger or consolidation in which the Company is the continuing corporation, or in the form case of stock any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had the Holder this Warrant been exercised the Warrants immediately prior to any the effective date of such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classificationreorganization, reclassification or other reorganization of the capital stock of Ontroconsolidation, consolidation or merger of Ontro with or into another corporationmerger, or the salestatutory exchange, lease sale or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro if necessary, appropriate adjustment shall mail be made in the application of the provisions set forth in this Section 3 with respect to the Holder, at least 15 days prior thereto, a notice stating rights and interests thereafter of the date or expected date on which a record is Holder to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be taken. Such notice shall also specify the date or expected date, if any is to be fixedmade applicable, as of which holders of common stock of record shall be entitled nearly as may reasonably be, in relation to exchange their any shares of common stock for or other securities or other property thereafter deliverable upon on the exercise of the Warrant. Notice of any such classificationreorganization, reclassification, reorganization, consolidation, merger, conveyanceexchange, dissolutionsale or conveyance shall be mailed to the Holder not less than 30 days prior to such event. The above provisions of this subsection (d) shall similarly apply to successive reorganizations, liquidationreclassifications, winding up consolidations, mergers, statutory exchanges, sales or conveyances. The Company shall require the issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of the Warrant to be responsible for all of the agreements and obligations of the Company hereunder. (e) For the purpose of any computation under subsection (b) of Section 1, or subsection (b) or (c) of this section, the current market price per share of Common Stock on any date in question shall be deemed to be the average of the daily Closing Prices for the five (5) Trading Day period ending on the earlier of the day in question and, if applicable, the last Trading Day before the "ex" date with respect to the issuance or distribution requiring such computation; provided, however, that if more than one event occurs that would require an adjustment pursuant to subsections (a) through (d), inclusive, the Board of Directors shall in good faith make such adjustments to the Closing Prices during such five (5) Trading Day period as it reasonably deems appropriate actionto effectuate the intent of the adjustment provisions in this Section 3, in which case any such determination by the Board of Directors shall be conclusive unless the Holder shall within five (5) days of receipt of the Adjustment Certificate setting forth the adjustment made, request that the determination be made pursuant to the Appraisal Procedures. For purposes of this paragraph, the term "ex" date means the first date on which the shares of Common Stock trade regular way, without the right to receive such issuance or distribution, on the New York Stock Exchange or on such successor securities exchange as the case shares of Common Stock may bebe listed on or in the relevant market from which the Closing Prices were obtained.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall --------------------------- hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the five consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by the Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by Nasdaq, or if not then publicly traded, the fair market price as determined by the Company's Board of Directors) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be such then current market price per share of Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after the number record date of any such Special Dividend. (c) Except as provided in Subsection 3(e), in case the Company shall hereafter issue or sell any shares of common stock outstanding immediately after Common Stock for a consideration per share less than the Per Share Warrant Price on the date of such Event. Upon each adjustment in the exercise price resulting from an Eventissuance or sale, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may Common Stock outstanding immediately prior to such issuance or sale, including shares of Common Stock issuable upon the exercise of options and warrants then exercisable, multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale including shares of Common Stock issuable upon the exercise of options and warrants then exercisable. (d) Except as provided in Subsections 3(b) and 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be purchased adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) multiplied by the Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance by the Company of options to purchase up to 2,500,000 shares of Common Stock reserved for issuance pursuant to the Company's 1999 Stock Incentive Plan (the "Plan"), and the exercise of such options, (ii) the issuance by the Company of up to 935,000 shares of Common Stock upon the exercise of options currently outstanding that were not granted under the Plan, (iii) the issuance by the Company of up to 2,500,000 shares of Common Stock upon the conversion of the Company's outstanding Series A Preferred Stock, (iv) the issuance by the Company of up to 657,890 shares of Common Stock upon exercise of warrants currently outstanding (other than the Warrants and the Additional Warrants), and (v) the issuance by the Company of shares of the Common Stock pursuant to the exercise of the Warrants or the Additional Warrants. The number of shares of Common Stock set forth in this Subsection 3(e) is subject to adjustment in accordance with any anti-dilution provisions existing on the date hereof under the terms of the instruments governing their issuance. (f) If the Company issues shares of Common Stock or securities convertible or exchangeable for shares of Common Stock in connection with (a) a strategic alliance or licensing agreement or (b) the acquisition (by merger or otherwise) of all or substantially all of the capital stock or assets of another entity or business organization, the issuance of shares of Common Stock in connection with any such transaction shall require the adjustment of the Per Share Warrant Price unless the value of the Company at the time of such transaction, as determined in good faith by a committee comprised of the independent directors of the Board of Directors or, if no such committee has been appointed, in consultation with the Holder and a majority of the shares held by shareholders who are not officers, directors or otherwise employees of the Company, is equal to or greater than the Per Share Warrant Price. (g) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionreorganization, the numerator of which reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(g) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassifi cation, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 15 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (i) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by -------- ------- reason of this Subsection 3(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided -------- further, however, that adjustments shall be required and made in accordance with ------- the provisions of this Section 3 (other than this Subsection 3(i)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/l00th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion the Company shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (j) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (k) If the Board of Directors of the Company shall (i) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend subject to the first parenthetical in Subsection 3(b), (ii) offer to the holders of the voluntary shares of Common Stock any additional shares of Common Stock, any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (l) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon capital stock. (m) If the Per Share Warrant Price shall be adjusted as a result of one of the events set forth in the first paragraph of this Warrant, the provisions of this Section 3 shall be applied as if such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as adjusted Per Share Warrant Price had been in effect since the case may beinitial issuance of this Warrant.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall distribute to the holders of its outstanding Common Stock, (i) declare securities, other than shares of Common Stock, or (ii) property, other than cash dividends paid in conformity with past practice, without payment therefor, with respect to Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and property which the Holder would have held on the date of such exercise if, on the date of this Warrant, the Holder had been the holder of record of the number of shares of the Common Stock subscribed for upon such exercise and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Company, the Per Share Warrant Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of common Common Stock or other capital stock outstanding of the Company which he would have owned or been entitled to receive immediately following the happening of any of the events described above had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to such Eventthis shall become effective immediately prior thereto. An adjustment made pursuant to this subsection (b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this subsection (b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the denominator Company, the Board of which Directors (whose determination shall be conclusive and shall be described in a written notice to the number Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares of common such classes or capital stock outstanding immediately after or shares of Common Stock and other capital stock. (c) Except as provided in 3(e), in case the Company shall hereafter issue or sell any shares of Common Stock for a consideration per share less than fair market value of a share of Common Stock at such Event. Upon each adjustment in time as determined by the exercise price resulting from an Eventreasonable judgment of the Company's Board of Directors, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Common Stock outstanding immediately prior to such Event issuance or sale multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale. (d) Except as provided in 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase the Common Stock or to convert such securities into Common Stock at a fractionprice per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then Per Share Warrant Price in effect on the date of such issuance or sale, the numerator of which Per Share Warrant Price shall be adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale multiplied by the Per Share Warrant Price plus (B) Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance of shares of Common Stock upon the exercise price of options which may be granted under the Company's Stock Option Plan as in effect on the date hereof, or (ii) the issuance of shares pursuant to the exercise of this Warrant or any other warrants that are being issued as of the date hereof or are outstanding as of the date hereof. (f) In case of any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another entity (including any exchange effectuated in connection with a merger of any other corporation with the Company), the Holder of this Warrant shall have the right thereafter to convert such Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Eventconsolidation, merger, statutory exchange, sale or conveyance and the denominator of which in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this 3(f) shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances. Notice of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassificationconsolidation, merger, salestatutory exchange, lease sale or conveyance as conveyance, and of said provisions so proposed to be made, shall be mailed to the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 20 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (g) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; or provided, however, that any adjustments which by reason of this (iig) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this (g)) later than such case, Ontro shall mail time as may be required in order to preserve the tax-free nature of a distribution to the Holder, at least 15 days prior thereto, a notice stating the date Holder of this Warrant or expected date on which a record is to be takenCommon Stock. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record All calculations under this Section 3 shall be entitled made to exchange their shares the nearest cent or to the nearest 1/100th of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actiona share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its shareholders shall not be taxable. (h) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of the Holder of this Warrant in accordance with this Section 3, the Company shall, at its own expense, within ten (10) days of such adjustment or modification, deliver to the holder of this Warrant a certificate of the principal financial officer of the Company setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or modification and the manner of computing the same. In addition, within thirty (30) days of the end of the Company's fiscal year next following any such adjustment or modification, the Company shall, at its own expense, deliver to the Holder of this Warrant a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the same information as required by such principal financial officer certificate. (i) If the Board of Directors of the Company shall declare any dividend or other distribution in cash with respect to the Common Stock, other than out of earned surplus, the Company shall mail notice thereof to the Holder not less than 10 days prior to the record date fixed for determining shareholders entitled to participate in such dividend or other distribution.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall distribute to the holders of its outstanding Common Stock, (i) declare a dividend in securities, other than shares of common stock Common Stock, or (ii) property, other than cash not out of earned surplus, without payment therefore, then and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to a received the securities and property which the Holder would hold on the date of such exercise if, on the date of this Warrant the Holder had been the holder of common stock record of the number of shares of the Common Stock subscribed for upon such exercised and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay dividend or make a distribution of its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the its Common Stock any shares of common capital stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Company, the Per Share Price Warrant Price and Warrant Shares in effect immediately prior to such Event by (ii) a fraction, the numerator of which action shall be adjusted so that the Holder of any Warrant thereafter exercised shall be entitled to receive the number of shares of common Common Stock or other capital stock of the Company which he would have owned or been entitled to received at Aggregate Warrant Price he would have paid or have been entitled to pay immediately following the happening of any of the events described above had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this (b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. If, as a result of an adjustment made pursuant to this (b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital Stock of the Company, Board of Directors (whose reasonable determination shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determined the allocation of the adjusted Per Share Warrant Price between or among shares of such classes or capital stock or shares of Common Stock and other capital stock. (c) Except as provided in 3(e), in case the company shall hereafter issue or sell any shares of Common Stock for a consideration Per Share Warrant Price in effect immediately prior to such issuance or sale, the Per Share Warrant Price shall be adjusted as of the date such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number shares of Common Stock outstanding immediately prior to such Event, and issuance or sale multiplied by the denominator of which shall be Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of common stock Common Stock outstanding immediately after issuance or sale. (d) Except as provided in 3(e) in case the Company shall hereafter issue or sell any rights, option warrants or securities convertible into Common Stock entitling the holders thereof to purchase the Common Stock or to convert such Event. Upon each adjustment securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise price resulting from an Event, or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Ontro common stock which may be purchased Common Stock issuable upon exercise or conversion of such securities) less than the Warrants then Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number shares of Common Stock outstanding on the of such issuance or sale multiplied by Per Share Price plus (B) the total Consideration by (ii) the number of shares of Ontro common stock Common Stock outstanding on the date such issuance or sale plus maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance of Common Stock upon the exercise of options which may be purchased upon granted in the ordinary course of business under the Company's official employee stock option plan as in effect on the date hereof or (ii) the issuance of shares pursuant to the exercise of this Warrant. (f) In case of any consolidation or merger to which the Warrants Company is a party other than a merger or consolidation in which the Company's is the continuing corporation, or in case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another entity (including any exchange effected in connection with a merger of any other corporation with the Company), the Holder of this Warrant shall have the right thereafter convert such Warrant into the kind and amount of securities, cash or other property which he would have owned or have been entitled to received immediately after such consolidation, merger, statutory, exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionconsolidation, the numerator of which merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustments shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that provisions set forth in Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this 3(f) shall similarly apply to successive consolidations, mergers statutory exchanges, sales or conveyances. Notice of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassificationconsolidation, merger, salestatutory exchange, lease sale or conveyance as conveyance, and of said provisions so propose to be made, shall be mailed to the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than twenty (20) days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or pr substantially all of the assets of Ontro; or the Company for a consideration consisting primarily of securities shall be deemed a consolidation merger for the foregoing purposes. (iig) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the voluntary rights of the Holder of this Warrant in accordance with this Section 3, Company shall, at its own expense, within ten (10) days of such adjustment or involuntary dissolutionmodification, liquidation deliver to the holder of this Warrant a certificate of the principal financial officer of the Company setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or winding up the effect of Ontro; thensuch modification, a brief statement of the facts requiring such adjustment or modification and in the manner of computing the same. In addition, within thirty (30) days of the end of the Company's fiscal year next following any such caseadjustment or modification, Ontro the Company shall, at its own expense, deliver to the Holder of this Warrant a certificate of a firm of independent public accountants of recognized standing reasonably selected by the Board of Directors (which may be the regular auditors of the Company) setting forth the same information as required by such principal financial officer certificate. (h) If the Board of Directors of the Company shall declare any dividend or other distribution in cash with respect to the Common Stock, other than out of earned surplus, the Company shall mail notice thereof to the Holder, at least 15 Holder not less than twenty (20) days prior thereto, a notice stating to the record date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be fixed for determining shareholders entitled to exchange their shares of common stock for securities participate in such dividend or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may bedistribution.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the Effective Date, the Company shall distribute to the holders of the Common Stock (i) declare securities, other than shares of Common Stock, or (ii) property, excluding cash, without payment therefore, with respect to the Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and properties which the Holder would have held on the date of such exercise if, on the Effective Date the Holder had been the holder of record of the number of shares of Common Stock subscribed for upon such exercise and, during the period from the Effective Date to and including the date of such exercise, had retained such shares and securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed by the Company to the Holder. (b) In case the Company shall subsequent to the Effective Date (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stockCommon Stock into a smaller number of shares, or (iv) otherwise issue by reclassification of its Common Stock any shares of capital stock of the Company, the Exercise Price in effect a re-capitalization of immediately prior to such character action shall be adjusted so that the shares Holder of common stock shall any Warrant surrendered for exercise immediately thereafter would be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common Common Stock or other capital stock of the Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this subparagraph 3 (b) shall become effective immediately after the record date in the case of any such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, reconstruction or reclassification. If, as a result of an adjustment made pursuant to this subparagraph 3(b), the holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination, providing the same is applied equally to all holders of Common Stock, shall be conclusive and shall be described in a written notice to the Holders of the Warrants promptly after such adjustment) shall determine the allocation between or among shares of such classes of capital stock or shares of Common Stock and other capital stock. (c) In case the Company shall subsequent to the Effective Date issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (the "Price", as defined) less than the then the current Exercise Price in effect on the record date of such dividend issuance or distribution or sale, the effective Exercise Price shall be adjusted as of the date of such subdivisionissuance or sale so that the same shall equal to the Price (subject to further adjustment as herein provided). For purposes of this subparagraph 3(c), combination or reclassification (individually an the term "EventPrice" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to and mean the nearest cent) amount determined by multiplying dividing (i) the exercise price total amount, if any, received or receivable by the Company in consideration of the Warrant(s) in effect immediately prior issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to such Event the Company upon exercise or conversion thereof (the "Total Consideration"), by (ii) a fraction, the numerator of which shall be the number of addi- tional shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share Common Stock issuable upon exercise or conversion of the Warrants such securities. Any property (other than cash) received in consideration for, or exercise of, any such rights, options, warrants or convertible securities shall be replaced by, and/or shall includevalued at fair market value on the date of receipt by the Company, as determined by the case may be, for the purposes hereof, the stock or property issued or distributed in respect Board of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereofDirectors. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall --------------------------- hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the five consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by the Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by Nasdaq, or if not then publicly traded, the fair market price as determined by the Company's Board of Directors) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be such then current market price per share of Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after the number record date of any such Special Dividend. (c) Except as provided in Subsection 3(e), in case the Company shall hereafter issue or sell any shares of common stock outstanding immediately after Common Stock for a consideration per share less than the Per Share Warrant Price on the date of such Event. Upon each adjustment in the exercise price resulting from an Eventissuance or sale, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may Common Stock outstanding immediately prior to such issuance or sale, including shares of Common Stock issuable upon the exercise of options and warrants then exercisable, multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale including shares of Common Stock issuable upon the exercise of options and warrants then exercisable. (d) Except as provided in Subsections 3(b) and 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be purchased adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) multiplied by the Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance by the Company of options to purchase up to 2,500,000 shares of Common Stock reserved for issuance pursuant to the Company's 1999 Stock Incentive Plan (the "Plan"), and the exercise of such options, (ii) the issuance by the Company of up to 935,000 shares of Common Stock upon the exercise of options currently outstanding that were not granted under the Plan, (iii) the issuance by the Company of up to 2,500,000 shares of Common Stock upon the conversion of the Company's outstanding Series A Preferred Stock, (iv) the issuance by the Company of up to 657,890 shares of Common Stock upon exercise of warrants currently outstanding (other than the Warrants and the Additional Warrants), and (v) the issuance by the Company of shares of the Common Stock pursuant to the exercise of the Warrants or the Additional Warrants. The number of shares of Common Stock set forth in this Subsection 3(e) is subject to adjustment in accordance with any anti- dilution provisions existing on the date hereof under the terms of the instruments governing their issuance. (f) If the Company issues shares of Common Stock or securities convertible or exchangeable for shares of Common Stock in connection with (a) a strategic alliance or licensing agreement or (b) the acquisition (by merger or otherwise) of all or substantially all of the capital stock or assets of another entity or business organization, the issuance of shares of Common Stock in connection with any such transaction shall require the adjustment of the Per Share Warrant Price unless the value of the Company at the time of such transaction, as determined in good faith by a committee comprised of the independent directors of the Board of Directors or, if no such committee has been appointed, in consultation with the Holder and a majority of the shares held by shareholders who are not officers, directors or otherwise employees of the Company, is equal to or greater than the Per Share Warrant Price. (g) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionreorganization, the numerator of which reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(g) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassifi cation, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 15 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (i) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by -------- ------- reason of this Subsection 3(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, -------- ------- however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(i)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/l00th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion the Company shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (j) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (k) If the Board of Directors of the Company shall (i) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend subject to the first parenthetical in Subsection 3(b), (ii) offer to the holders of the voluntary shares of Common Stock any additional shares of Common Stock, any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (l) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon capital stock. (m) If the Per Share Warrant Price shall be adjusted as a result of one of the events set forth in the first paragraph of this Warrant, the provisions of this Section 3 shall be applied as if such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as adjusted Per Share Warrant Price had been in effect since the case may beinitial issuance of this Warrant.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall --------------------------- hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the five consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by the Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by Nasdaq, or if not then publicly traded, the fair market price as determined by the Company's Board of Directors) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be such then current market price per share of Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after the number record date of any such Special Dividend. (c) Except as provided in Subsection 3(e), in case the Company shall hereafter issue or sell any shares of common stock outstanding immediately after Common Stock for a consideration per share less than the Per Share Warrant Price on the date of such Event. Upon each adjustment in the exercise price resulting from an Eventissuance or sale, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may Common Stock outstanding immediately prior to such issuance or sale, including shares of Common Stock issuable upon the exercise of options and warrants then exercisable, multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale including shares of Common Stock issuable upon the exercise of options and warrants then exercisable. (d) Except as provided in Subsections 3(b) and 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be purchased adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) multiplied by the Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance by the Company of options to purchase up to 2,500,000 shares of Common Stock reserved for issuance pursuant to the Company's 1999 Stock Incentive Plan (the "Plan"), and the exercise of such options, (ii) the issuance by the Company of up to 935,000 shares of Common Stock upon the exercise of options currently outstanding that were not granted under the Plan, (iii) the issuance by the Company of up to 2,500,000 shares of Common Stock upon the conversion of the Company's outstanding Series A Preferred Stock, (iv) the issuance by the Company of up to 657,890 shares of Common Stock upon exercise of warrants currently outstanding (other than the Warrants and the Additional Warrants), and (v) the issuance by the Company of shares of the Common Stock pursuant to the exercise of the Warrants or the Additional Warrants. The number of shares of Common Stock set forth in this Subsection 3(e) is subject to adjustment in accordance with any anti-dilution provisions existing on the date hereof under the terms of the instruments governing their issuance. (f) If the Company issues shares of Common Stock or securities convertible or exchangeable for shares of Common Stock in connection with (a) a strategic alliance or licensing agreement or (b) the acquisition (by merger or otherwise) of all or substantially all of the capital stock or assets of another entity or business organization, the issuance of shares of Common Stock in connection with any such transaction shall require the adjustment of the Per Share Warrant Price unless the value of the Company at the time of such transaction, as determined in good faith by a committee comprised of the independent directors of the Board of Directors or, if no such committee has been appointed, in consultation with the Holder and a majority of the shares held by shareholders who are not officers, directors or otherwise employees of the Company, is equal to or greater than the Per Share Warrant Price. (g) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionreorganization, the numerator of which reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(g) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 15 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (i) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by -------- ------- reason of this Subsection 3(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided -------- further, however, that adjustments shall be required and made in accordance with ------- the provisions of this Section 3 (other than this Subsection 3(i)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/l00th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion the Company shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (j) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (k) If the Board of Directors of the Company shall (i) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend subject to the first parenthetical in Subsection 3(b), (ii) offer to the holders of the voluntary shares of Common Stock any additional shares of Common Stock, any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (l) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon capital stock. (m) If the Per Share Warrant Price shall be adjusted as a result of one of the events set forth in the first paragraph of this Warrant, the provisions of this Section 3 shall be applied as if such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as adjusted Per Share Warrant Price had been in effect since the case may beinitial issuance of this Warrant.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall hereafter --------------------------- (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stock, Common. Stock (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock Into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of not profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise Per Share Warrant price of the Warrant(s) then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the thirty consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by the Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by NASDAQ, or if not then publicly traded, the fair market price as determined in good faith by the Company's Board of Directors) less the fair market value (as determined in good faith by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or Property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be the number such then current market price per share of shares of common stock outstanding Common Stock. An adjustment made pursuant to this Subsection 8(b) shall become effective immediately after the record date of any such Event. Upon each adjustment Special Dividend. (c) Except as provided in Subsection 3(e), in case the exercise price resulting from an EventCompany shall prior to June 30, 1998 issue or sell any share of Common Stock for a consideration per share less than the Per Share Warrant Price on the date of such issuance or sale, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Common Stock outstanding immediately prior to such Event issuance or sale multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such Issuance or sale by (ii) the total number of share of Common Stock outstanding after such issuance or sale. (d) Except as provided in Subsections 3(b) and 3(e), in case the Company shall prior to June 30, 1998 issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a fractionprice per share (determined by dividing (i) the total amount if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable, upon exercise or conversion of such securities) low than the then current Per Share Warrant Price in effect on the date of such issuance or sale, the numerator of which Per Share Warrant Price shall be adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sales multiplied by the Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of share of Common Stock outstanding on the date of such issuance or sale plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance by the Company of options, warrants or rights to officers, directors and employees to purchase shares of Common Stock or the issuance of shares of Common Stock upon the exercise price thereof, including any such options, warrants or rights as are issued and outstanding as of the date hereof and (ii) the issuance by the Company of Common Stock pursuant to the exercise of any Warrant. (f) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in effect which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange affected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive after such reorganization, consolidation, merger, statutory exchange, age or conveyance had this Warrant been exercised immediately prior to the effective date of such Eventreorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall, be made in the denominator application of which shall be the exercise price provisions set forth in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(f) shall similarly apply to successive reorganizations, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance and of said provision so proposed to be made, shall be mailed to the Holders of the Warrants not less than 30 days prior to such event. A sale of all of the assets of the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (g) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, an a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the company. (h) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; provided, however, that any adjustments which by -------- ------- reason of this Subsection 8(h) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, -------- ------ however, that adjustments shall be required and made In accordance with the provisions of this Section 3 (other than this Subsection 3(h)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 8 shall be made to the nearest cent or paid by Ontro on, or with respect to, to the then outstanding shares nearest 1/100th of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall includeshare, as the case may be, for . Anything in this Section 3 to the purposes hereofcontrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 8, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or property issued securities convertible or distributed in respect of each share of common exchangeable for stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as hereafter made by the Holder would have been entitled Company to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect its stockholders shall not be made at the time thereoftaxable. (ci) In case: Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such Adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (j) If the Board of Directors of the Company shall (i) of declare any classification, reclassification dividend or other reorganization of distribution with respect to the capital stock of OntroCommon Stock, consolidation or merger of Ontro with or into another corporationother than a cash dividend subject to the first parenthetical in Subsection 3(b), or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) offer to the holders of the voluntary sham of Common Stock any additional share of Common Stock any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate In such dividend, distribution, offer or subscription right or to vote on such dissolution, liquidation or winding up. (k) It as a notice stating result of an adjustment made pursuant to this Section 8, the date Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or expected date on which a record is to be taken. Such notice shall also specify the date more classes of capital stock or expected date, if any is to be fixed, as shares of which holders of common Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may becapital stock.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall --------------------------- hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character its Common Stock any shares of capital stock of the Company, the Per Share Warrant Price shall be adjusted so that the shares of common stock Holder upon the exercise hereof shall be changed into or become exchangeable for a greater or lesser entitled to receive the number of shares of common stock, then Common Stock or other capital stock of the Exercise Price in effect on Company which he would have owned immediately following such action had such Warrant been exercised immediately prior thereto. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an b) If, at any time or from time to time after the date of this Warrant, the Company shall issue or distribute to the holders of shares of Common Stock evidences of its indebtedness, any other securities of the Company or any cash, property or other assets (excluding a subdivision, combination or reclassification, or dividend or distribution payable in shares of Common Stock, referred to in Subsection 3(a), and also excluding cash dividends or cash distributions paid out of net profits legally available therefor if the full amount thereof, together with the value of other dividends and distributions made substantially concurrently therewith or pursuant to a plan which includes payment thereof, is equivalent to not more than 5% of the Company's net worth) (any such nonexcluded event being herein called a "Event" and collectively Special Dividend"), the "Events") Per Share Warrant Price shall be adjusted, or further adjusted, to a price (to the nearest cent) determined adjusted by multiplying (i) the exercise price of the Warrant(s) Per Share Warrant Price then in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number then current market price of shares of common stock outstanding the Common Stock (defined as the average for the five consecutive business days immediately prior to the record date of the daily closing price of the Common Stock as reported by the national securities exchange upon which the Common Stock is then listed or if not listed on any such Eventexchange, the average of the closing prices as reported by the Nasdaq National Market, or if not then listed on the Nasdaq National Market, the average of the highest reported bid and lowest reported asked prices as reported by Nasdaq, or if not then publicly traded, the fair market price as determined by the Company's Board of Directors) less the fair market value (as determined by the Company's Board of Directors) of the evidences of indebtedness, cash, securities or property, or other assets issued or distributed in such Special Dividend applicable to one share of Common Stock and the denominator of which shall be such then current market price per share of Common Stock. An adjustment made pursuant to this Subsection 3(b) shall become effective immediately after the number record date of any such Special Dividend. (c) Except as provided in Subsection 3(e), in case the Company shall hereafter issue or sell any shares of common stock outstanding immediately after Common Stock for a consideration per share less than the Per Share Warrant Price on the date of such Event. Upon each adjustment in the exercise price resulting from an Eventissuance or sale, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Per Share Warrant Price shall be adjusted (to as of the nearest one-thousandth share) date of such issuance or sale so that the same shall equal the price determined by multiplying dividing (i) the sum of (A) the number of shares of Ontro common stock which may Common Stock outstanding immediately prior to such issuance or sale, including shares of Common Stock issuable upon the exercise of options and warrants then exercisable, multiplied by the Per Share Warrant Price plus (B) the consideration received by the Company upon such issuance or sale by (ii) the total number of shares of Common Stock outstanding after such issuance or sale including shares of Common Stock issuable upon the exercise of options and warrants then exercisable. (d) Except as provided in Subsections 3(b) and 3(e), in case the Company shall hereafter issue or sell any rights, options, warrants or securities convertible into Common Stock entitling the holders thereof to purchase Common Stock or to convert such securities into Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such rights, options, warrants or convertible securities plus the total consideration, if any, payable to the Company upon exercise or conversion thereof (the "Total Consideration") by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) less than the then current Per Share Warrant Price in effect on the date of such issuance or sale, the Per Share Warrant Price shall be purchased adjusted as of the date of such issuance or sale so that the same shall equal the price determined by dividing (i) the sum of (A) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) multiplied by the Per Share Warrant Price plus (B) the Total Consideration by (ii) the number of shares of Common Stock outstanding on the date of such issuance or sale (including shares of Common Stock issuable upon the exercise of options and warrants then exercisable) plus the maximum number of additional shares of Common Stock issuable upon exercise or conversion of such securities. (e) No adjustment in the Per Share Warrant Price shall be required in the case of (i) the issuance by the Company of options to purchase up to 2,500,000 shares of Common Stock reserved for issuance pursuant to the Company's 1999 Stock Incentive Plan (the "Plan"), and the exercise of such options, (ii) the issuance by the Company of up to 935,000 shares of Common Stock upon the exercise of options currently outstanding that were not granted under the Plan, (iii) the issuance by the Company of up to 2,500,000 shares of Common Stock upon the conversion of the Company's outstanding Series A Preferred Stock, (iv) the issuance by the Company of up to 657,890 shares of Common Stock upon exercise of warrants currently outstanding (other than the Warrants and the Additional Warrants), and (v) the issuance by the Company of shares of the Common Stock pursuant to the exercise of the Warrants or the Additional Warrants. The number of shares of Common Stock set forth in this Subsection 3(e) is subject to adjustment in accordance with any anti- dilution provisions existing on the date hereof under the terms of the instruments governing their issuance. (f) If the Company issues shares of Common Stock or securities convertible or exchangeable for shares of Common Stock in connection with (a) a strategic alliance or licensing agreement or (b) the acquisition (by merger or otherwise) of all or substantially all of the capital stock or assets of another entity or business organization, the issuance of shares of Common Stock in connection with any such transaction shall require the adjustment of the Per Share Warrant Price unless the value of the Company at the time of such transaction, as determined in good faith by a committee comprised of the independent directors of the Board of Directors or, if no such committee has been appointed, in consultation with the Holder and a majority of the shares held by shareholders who are not officers, directors or otherwise employees of the Company, is equal to or greater than the Per Share Warrant Price. (g) In case of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionreorganization, the numerator of which reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(g) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 15 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (h) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, in each such case, the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (i) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.01 per share of Common Stock; provided, however, that any adjustments which by -------- ------- reason of this Subsection 3(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, -------- ------- however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Subsection 3(i)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/l00th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion the Company shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (j) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (k) If the Board of Directors of the Company shall (i) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend subject to the first parenthetical in Subsection 3(b), (ii) offer to the holders of the voluntary shares of Common Stock any additional shares of Common Stock, any securities convertible into or involuntary exercisable for shares of Common Stock or any rights to subscribe thereto, or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (l) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of record the Company, the Board of Directors (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common stock for securities or Common Stock and other property deliverable upon capital stock. (m) If the Per Share Warrant Price shall be adjusted as a result of one of the events set forth in the first paragraph of this Warrant, the provisions of this Section 3 shall be applied as if such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as adjusted Per Share Warrant Price had been in effect since the case may beinitial issuance of this Warrant.

Protection Against Dilution. (a) If In the event the Company shall, at any time and or from time to time Ontro shall: after the date of issuance of this Warrant, issue or distribute to all of the holders of its shares of Common Stock evidence of its indebtedness, any other securities of the Company or any cash, property or other assets (any such event being herein called a "SPECIAL DIVIDEND"), the Per Share Exercise Price shall be adjusted by multiplying the Per Share Exercise Price then in effect by a fraction, the numerator of which shall be the then Current Market Price (as defined in paragraph 3(k) below) of the Common Stock, less the Current Market Price of the Special Dividend issued or distributed in respect of one share of Common Stock, and the denominator of which shall be the Current Market Price of the Common Stock. Such adjustment shall be made successively whenever such a record date is fixed. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date for the determination of shareholders entitled to receive such distribution. (b) In case the Company shall hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, Common Stock into a smaller number of shares or (iv) otherwise effect issue by reclassification of its Common Stock any shares of capital stock of the Company, the number of shares to be delivered upon exercise of any share of this Warrant will be appropriately increased so that each Warrant holder thereafter will be entitled to receive the number of Common Shares that such holder would have owned immediately following such action had such Warrant been exercised immediately prior thereto, and the Per Share Exercise Price will be appropriately adjusted. An adjustment made pursuant to this subsection 3(b) shall become effective immediately after the record date in the case of a re-capitalization dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification. (i) Except as provided in subsections 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the holders thereof to purchase Common Stock at a price per share (determined by dividing (i) the total amount, if any, received or receivable by the Company in consideration of the issuance or sale of such character that securities plus the consideration, if any, payable to the Company upon exercise or conversion thereof (collectively, the "TOTAL CONSIDERATION") by (ii) the number of additional shares of common stock Common Stock issued, sold or issuable upon exercise or conversion of such securities) which is less than the then Current Market Price of the Common Stock (as defined below) but not below the current Per Share Exercise Price (which event is governed by subsection 3(c)(ii)), the Per Share Exercise Price shall be changed into adjusted as of the date of such issuance or become exchangeable for sale by multiplying the Per Share Exercise Price then in effect by a greater or lesser fraction, the numerator of which shall be (x) the sum of (A) the number of shares of common stockCommon Stock outstanding on the record date of such issuance or sale plus (B) the Total Consideration divided by the Current Market Price of the Common Stock, and the denominator of which shall be (y) the number of shares of Common Stock outstanding on the record date of such issuance or sale plus the maximum number of additional shares of Common Stock issued, sold or issuable upon exercise or conversion of such securities. (ii) Except as provided in subsection 3(a) and 3(b)(i), in the event the Company shall hereafter issue or sell any Common Stock, any securities convertible into Common Stock or any rights, options or warrants to purchase Common Stock or securities convertible into Common Stock, in each case for a price per share or entitling the holders thereof to purchase Common Stock at a price per share (the "ISSUE PRICE"), (determined by dividing (i) the Total Consideration by (ii) the number of additional shares of Common Stock issuable upon exercise or conversion of such securities) which is less than the then the current Per Share Exercise Price in effect on the record date of such dividend issuance, the Per Share Exercise Price shall be adjusted to equal the Issue Price. (d) In the event of any capital reorganization or distribution reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such reorganization, reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such subdivisionreorganization, combination reclassification, consolidation, merger, statutory exchange, sale or reclassification (individually an "Event" conveyance and collectively the "Events") in any such case, if necessary, appropriate adjustment shall be adjusted, or further adjusted, to a price (made in the application of the provisions set forth in this Section 3 with respect to the nearest cent) determined by multiplying (i) the exercise price rights and interests thereafter of the Warrant(s) in effect immediately prior to such Event by (ii) a fraction, the numerator Holder of which shall be the number of shares of common stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock outstanding immediately after such Event. Upon each adjustment in the exercise price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (this Warrant to the nearest one-thousandth share) by multiplying (i) end that the number of provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this subsection 3(e) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made responsible for all of the agreements and obligations of the Company hereunder. Notice of any such reorganization, reclassification, consolidation, merger, statutory exchange, sale or paid by Ontro onconveyance and of said provisions so proposed to be made, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with mailed to the view of distributing such stock or property to its shareholders, each share issuable upon exercise Holders of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately not less than 30 days prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance event. A sale of all or substantially all of the assets of Ontro; the Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (iie) In case any event shall occur as to which the other provisions of this Section 3 are not strictly applicable but as to which the voluntary or involuntary dissolution, liquidation or winding up of Ontro; failure to make any adjustment would not fairly protect the purchase rights represented by this Warrant in accordance with the essential intent and principles hereof then, and in any each such case, Ontro shall mail the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants may appoint a firm of independent public accountants of recognized national standing reasonably acceptable to the HolderCompany, which shall give their opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles established herein, necessary to preserve the purchase rights represented by the Warrants. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants shall be borne by the Company. (f) Whenever the Per Share Exercise Price payable upon exercise of each Warrant is adjusted pursuant to this Section 3, the number of shares of Common Stock underlying a Warrant shall simultaneously be adjusted to equal the number obtained by dividing the Aggregate Exercise Price by the adjusted Per Share Exercise Price. (g) No adjustment in the Per Share Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 15 days prior thereto$0.01 per share of Common Stock; provided, a notice stating the date or expected date on however, that any adjustments which a record is by reason of this subsection 3(g) are not required to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record made shall be entitled carried forward and taken into account in any subsequent adjustment. All calculations under this Section 3 shall be made to exchange their shares the nearest cent or to the nearest 1/100th of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actiona share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Exercise Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (h) Whenever the Per Share Exercise Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly obtain, at its expense, a certificate of a firm of independent public accountants of recognized standing selected by the Board of Directors (who may be the regular auditors of the Company) setting forth the Per Share Exercise Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holders of the Warrants. (i) If the Board of Directors of the Company shall declare any dividend or other distribution with respect to the Common Stock, the Company shall mail notice thereof to the Holders of the Warrants not less than 30 days prior to the record date fixed for determining stockholders entitled to participate in such dividend or other distribution. (j) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Exercise Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (k) For the purpose of any computation under Section 3 above, the then Current Market Price per share (the "CURRENT MARKET PRICE") shall be deemed to be the last sale price of the Common Stock on the trading day prior to such date or, in case no such reported sales take place on such day, the average of the last reported bid and asked prices of the Common Stock on such day, in either case on the principal national securities exchange on which the Common Stock is admitted to trading or listed, or if not listed or admitted to trading on any such exchange, the representative closing bid price of the Common Stock as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ"), or other similar organization if NASDAQ is no longer reporting such information, or, if the Common Stock is not reported on NASDAQ, the high per share bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or if not so available, the fair market value of the Common Stock as determined by agreement between the Company's Board of Directors, on the one part, and the Holders of Warrants representing the right to purchase a majority of the Warrant Shares subject to all outstanding Warrants, on the second part. If the Board of Directors and such Holders fail to agree on the Current Market Price within 60 days of the date of the action giving rise to any adjustment pursuant to this Section 3, such Holders shall be entitled to appoint a firm of independent public accountants or appraisers of recognized national standing reasonably acceptable to the Company, which shall give their opinion as to such Current Market Price on a basis consistent with the essential intent and principles established herein. Upon receipt of such opinion, the Company will promptly mail a copy thereof to the Holder of this Warrant and shall make the adjustments described therein. The fees and expenses of such independent public accountants or appraisers shall be borne by the Company.

Protection Against Dilution. (a) If If, at any time and or from time to time Ontro shall: after the date of this Warrant, the Company shall issue or distribute to the holders of shares of the Common Stock (i) declare securities, other than shares of the Common Stock, or (ii) property, other than cash, without payment therefor, with respect to the Common Stock, then, and in each such case, the Holder, upon the exercise of this Warrant, shall be entitled to receive the securities and property which the Holder would hold on the date of such exercise if, on the date of this Warrant, the Holder had been the holder of record of the number of shares of the Common Stock subscribed for upon such exercise and, during the period from the date of this Warrant to and including the date of such exercise, had retained such shares and the securities and properties receivable by the Holder during such period. Notice of each such distribution shall be forthwith mailed to the Holder. (b) If, at any time or from time to time after the date of this Warrant, the Company shall (i) pay a dividend in shares of common stock to a holder of common stock or make a distribution on its capital stock in shares of common stock to holders of common stockthe Common Stock, (ii) subdivide its outstanding shares of common stockthe Common Stock into a greater number of shares, (iii) combine its outstanding shares of common stock, the Common Stock into a smaller number of shares or (iv) otherwise effect a re-capitalization issue by reclassification of such character that the Common Stock any shares of common capital stock of the Company, the Per Share Warrant Price shall be changed into or become exchangeable for multiplied by a greater or lesser number fraction of shares of common stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) in effect immediately prior to such Event by (ii) a fraction, which the numerator of which shall be the number of shares of common stock Common Stock (excluding treasury shares, if any) outstanding immediately prior to before such Event, event and the denominator of which shall be the number of shares of common stock Common Stock (excluding treasury shares, if any) outstanding immediately after such Eventevent. Upon each such adjustment in of the exercise price Per Share Warrant Price pursuant to this Section 3(b), the Holder shall thereafter during the Exercise Period be entitled to purchase, at the Per Share Warrant Price resulting from an Eventsuch adjustment, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) Warrant Shares obtained by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price Per Share Warrant Price in effect immediately prior to such Event, and adjustment by the denominator number of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock to the extent that shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share Warrant Shares issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants this Warrant immediately prior to any such occurrenceadjustment and dividing the product thereof by the Per Share Warrant Price resulting from such adjustment. An adjustment made pursuant to this Section 3(b) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, and adequate provision to that effect shall be made at the time thereofcombination or reclassification. (c) In case: (i) case of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with to which the Company is a party other than a merger or into another consolidation in which the Company is the continuing corporation, or the sale, lease in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another entity (including any exchange effected in connection with a merger of another corporation with the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the Holder would have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such consolidation, merger, statutory exchange, sale or conveyance and, in any such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 with respect to the rights and interests thereafter of the Holder of this Warrant to the end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Section 3(c) shall similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any shares of stock or other securities or property thereafter deliverable on the exercise of this Warrant shall be responsible for all of the agreements and obligations of the Company hereunder. Notice of any such consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed to be made, shall be mailed to the Holders of the Warrants not less than 30 days prior to such event. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (d) No adjustment in the Per Share Warrant Price shall be required unless such adjustment would require an increase or decrease of at least $0.05 per share of the Common Stock; provided, however, that any adjustments which by reason of this Section 3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further, however, that adjustments shall be required and made in accordance with the provisions of this Section 3 (other than this Section 3(d)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the Holder of this Warrant or the Common Stock issuable upon exercise hereof. All calculations under this Section 3 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Warrant Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (e) Whenever the Per Share Warrant Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Company shall promptly prepare a notice (the “Adjustment Notice”), which shall be certified by the Company’s Chief Executive Officer to be true and correct. The Adjustment Notice shall set forth the Per Share Warrant Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same, and copies of such notice shall be mailed to the Holders of the Warrants not later than thirty (30) days following the occurrence of the event giving rise to the adjustment. (f) If the Board of Directors of the Company shall (1) declare any dividend or other distribution with respect to the Common Stock, other than a cash dividend payable otherwise than out of earnings or earned surplus, (ii) offer to the holders of shares of the voluntary Common Stock any additional shares of the Common Stock, any securities convertible into or involuntary exercisable for shares of the Common Stock or any rights to subscribe thereto or (iii) propose a dissolution, liquidation or winding up of Ontro; thenthe Company, and in any such case, Ontro the Company shall mail notice thereof to the Holder, at least Holders of the Warrants not less than 15 days prior theretoto the record date fixed for determining stockholders entitled to participate in such dividend, a notice stating the date distribution, offer or expected date subscription right or to vote on which a record is to be taken. Such notice shall also specify the date such dissolution, liquidation or expected date, if any is to be fixedwinding up. (g) If, as a result of which holders an adjustment made pursuant to this Section 3, the Holder of common any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of the Common Stock and other capital stock of record the Company, the Board of Directors of the Company (whose determination shall be entitled conclusive and shall be described in a written notice to exchange their the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Warrant Price between or among shares or such classes of capital stock or shares of common the Common Stock and other capital stock for securities or other property deliverable upon and any subsequent adjustments made pursuant to this Section 3 shall apply equally to each such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may beresulting class of capital stock.

Protection Against Dilution. (a) 6.1. If at any time and from time to time Ontro shall: the Company shall (i) declare a dividend in shares of common stock to a holder of common stock or make a distribution in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stockCommon Stock, (iii) combine its outstanding shares of common stock, Common Stock or (iv) otherwise effect a re-capitalization recapitalization of such character that the shares of common stock Common Stock shall be changed into or become exchangeable for a greater or lesser number of shares of common stockCommon Stock, then the Exercise Price in effect on the record date of such dividend or distribution or the effective date of such subdivision, combination or reclassification (individually an "Event" and collectively the "Events") shall be adjusted, or further adjusted, to a price (to the nearest cent) determined by multiplying (i) the exercise price of the Warrant(s) Exercise Price in effect immediately prior to such Event by (ii) a fraction, the numerator of which shall be the number of shares of common stock Common Stock outstanding immediately prior to such Event, and the denominator of which shall be the number of shares of common stock Common Stock outstanding immediately after such Event. Upon each adjustment in the exercise price Exercise Price resulting from an Event, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants Warrant Shares shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock Warrant Shares for which may be purchased upon exercise of the Warrants Warrant was exercisable immediately prior to such Event by (ii) a fraction, the numerator of which shall be the exercise price Exercise Price in effect immediately prior to such Event, and the denominator of which shall be the exercise price Exercise Price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed to the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock Common Stock in stock of any other class of securities convertible into shares of common stock Common Stock shall be treated as a dividend paid in common stock Common Stock to the extent that shares of common stock Common Stock are to be issued issuable upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities of any other corporation or other entity shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance of all or substantially all of the assets of Ontro; or (ii) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, and in any such case, Ontro shall mail to the Holder, at least 15 days prior thereto, a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate action, as the case may be.

Protection Against Dilution. (a) If at any time and from time to time Ontro shall: In case the Company shall hereafter (i) declare pay a dividend in shares of common stock to a holder of common stock or make a distribution on its Common Stock in shares of common stock to holders of common stockCommon Stock, (ii) subdivide its outstanding shares of common stock, Common Stock into a greater number of shares or (iii) combine its outstanding shares of common stockCommon Stock into a smaller number of shares (each of (i) through (iii) an "ACTION"), or (iv) otherwise effect a re-capitalization of such character that then the shares of common stock Per Share Exercise Price shall be changed into or become exchangeable for adjusted to be equal to the product of (i) a greater or lesser fraction, the numerator of which is the number of shares of common stockCommon Stock outstanding immediately prior to such Action and the denominator of which is the number of shares of Common Stock outstanding immediately following such Action, then multiplied by (ii) the Per Share Exercise Price in effect on immediately prior to such Action. An adjustment made pursuant to this Subsection 3(a) shall become effective immediately after the record date in the case of such a dividend or distribution or and shall become effective immediately after the effective date in the case of such a subdivision, combination or reclassification reclassification. (individually an "Event" and collectively b) Whenever the "Events") Per Share Exercise Price is adjusted pursuant to subsection 3(a), the number of Warrant Shares issuable upon payment of the Aggregate Exercise Price shall be adjusted, or further adjusted, adjusted to a price (be equal to the nearest cent) determined by multiplying (i) the exercise price product of the Warrant(s) in effect number of Warrant Shares issuable upon payment of the Aggregate Exercise Price immediately prior to such Event adjustment multiplied by (ii) a fraction, the numerator of which shall be the number of shares of common stock outstanding Aggregate Exercise Price payable immediately prior to such Eventsuch (c) In the event of any capital reorganization or reclassification, or any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing corporation, or in case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of securities with another corporation (including any exchange effected in connection with a merger of a third corporation into the Company), the Holder of this Warrant shall have the right thereafter to receive on the exercise of this Warrant the kind and amount of securities, cash or other property which the denominator of which shall be the number of shares of common stock outstanding Holder would have owned or have been entitled to receive immediately after such Event. Upon each adjustment in the exercise price resulting from an Eventreorganization, the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants shall be adjusted (to the nearest one-thousandth share) by multiplying (i) the number of shares of Ontro common stock which may be purchased upon exercise of the Warrants reclassification, consolidation, merger, statutory exchange, sale or conveyance had this Warrant been exercised immediately prior to the effective date of such Event by (ii) a fractionreorganization, the numerator of which reclassification, consolidation, merger, statutory exchange, sale or conveyance and in any such case, if necessary, appropriate adjustment shall be made in the exercise price application of the provisions set forth in effect immediately prior to such Event, and the denominator of which shall be the exercise price in effect immediately after such Event. Notice of each such adjustment and each such readjustment shall be forthwith mailed this Section 3 with respect to the rights and interests thereafter of the Holder setting forth such adjustments or readjustments and the facts and calculations thereof in reasonable detail. Any dividend paid or distributed upon the common stock in stock of any other class of securities convertible into shares of common stock shall be treated as a dividend paid in common stock this Warrant to the extent end that the provisions set forth in this Section 3 shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of common stock are to be issued upon the conversion thereof. (b) In case: (i) a distribution in the form of stock or other securities or property thereafter deliverable on the exercise of this Warrant. The above provisions of this Subsection 3(c) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, statutory exchanges, sales or conveyances. The issuer of any other corporation shares of stock or other entity securities or property thereafter deliverable on the exercise of this Warrant shall be made or paid by Ontro on, or with respect to, the then outstanding shares of common stock, (ii) Ontro shall effect a re-capitalization of such character that the shares of common stock will be changed into or become exchangeable responsible for shares of common stock with a different par value or no par value, or (iii) Ontro (or a successor corporation) shall be consolidated or merged with or into another corporation or entity or shall sell, lease or convey all or substantially all of its assets in exchange for stock or property (including cash) with the view of distributing such stock or property to its shareholders, each share issuable upon exercise agreements and obligations of the Warrants shall be replaced by, and/or shall include, as the case may be, for the purposes hereof, the stock or property issued or distributed in respect of each share of common stock upon such re-capitalization, reclassification, merger, sale, lease or conveyance as the Holder would have been entitled to had the Holder exercised the Warrants immediately prior to any such occurrence, and adequate provision to that effect shall be made at the time thereof. (c) In case: (i) of any classification, reclassification or other reorganization of the capital stock of Ontro, consolidation or merger of Ontro with or into another corporation, or the sale, lease or conveyance Company hereunder. A sale of all or substantially all of the assets of Ontrothe Company for a consideration consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes. (d) No adjustment in the Per Share Exercise Price shall be given effect unless such adjustment would require an increase or decrease of at least $0.05 per share of Common Stock; or (iiprovided, however, that any adjustments which by reason of this Subsection 3(d) of the voluntary or involuntary dissolution, liquidation or winding up of Ontro; then, are not given effect shall be carried forward and taken into account in any such case, Ontro subsequent adjustment. All calculations under this Section 3 shall mail be made to the Holder, at least 15 days prior thereto, nearest cent or to the nearest 1/100th of a notice stating the date or expected date on which a record is to be taken. Such notice shall also specify the date or expected date, if any is to be fixed, as of which holders of common stock of record shall be entitled to exchange their shares of common stock for securities or other property deliverable upon such classification, reclassification, reorganization, consolidation, merger, conveyance, dissolution, liquidation, winding up or any other appropriate actionshare, as the case may be. Anything in this Section 3 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Per Share Exercise Price, in addition to those required by this Section 3, as it in its discretion shall deem to be advisable in order that any stock dividend, subdivision of shares or distribution of rights to purchase stock or securities convertible or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. (e) Whenever the Per Share Exercise Price is adjusted as provided in this Section 3 and upon any modification of the rights of a Holder of Warrants in accordance with this Section 3, the Chief Financial Officer, or equivalent officer, of the Company shall prepare a certificate setting forth the Per Share Exercise Price and the number of Warrant Shares after such adjustment or the effect of such modification, a brief statement of the facts requiring such adjustment or modification and the manner of computing the same and cause copies of such certificate to be mailed to the Holder. (f) If, as a result of an adjustment made pursuant to this Section 3, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or more classes of capital stock or shares of Common Stock and other capital stock of the Company, the Board of Directors (whose determination shall be conclusive and shall be described in a written notice to the Holder of any Warrant promptly after such adjustment) shall determine the allocation of the adjusted Per Share Exercise Price between or among shares or such classes of capital stock or shares of Common Stock and other capital stock. (g) Notwithstanding anything else contained herein to the contrary, the Per Share Exercise Price shall not be decreased to be equal to an amount less than the authorized par value of the Company as in effect at the time of the exercise of this Warrant under Section 1 hereof.