Common use of Net Exercise Clause in Contracts

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant pursuant to Section 2.1, unless a registration statement under the Securities Act providing for the resale of the Exercise Shares and the Initial Shares is in effect by payment of cash or by checkthe date that is one hundred and fifty (150) days following the Closing pursuant to the Registration Rights Agreement and such registration statement remains in effect throughout the Effectiveness Period (as defined in the Registration Rights Agreement), the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled exercised (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) shall, if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed on any established stock exchange or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Nasdaq Global Market for or the Common Stock during Nasdaq Capital Market, be the same period, or, if there is no closing sales price for such periodstock (or the closing bid, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of exercise, as reported for in The Wall Street Journal or such security, other source as the last bid price Board of Directors of the Company deems reliable. In the absence of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of markets for the foregoing basesCommon Stock, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentfaith.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.sales

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

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the contrary, after the date on which a Registration Statement, Statement (as defined in Section 7.1 of the Securities Purchase AgreementAgreement dated February 10, 2003, by and among the Company and the persons listed on the Schedule of Purchasers attached thereto as Exhibit A) has first gone effective, if (i) at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.Nasdaq

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) X= --------- A Where: X = Y (A-B) A Where X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Common Stock specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4 above, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: X = Y (A-B) A Where X = the The number of shares of Common Stock Warrant Shares to be issued to the Holder pursuant to the net exercise. Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net exercise election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made. A = the The fair market value of one share of the Company’s Common Stock (Warrant Share at the date of such calculation) time the net exercise election is made. B = The Exercise Price (as adjusted to the date of such calculation) the net exercise). For purposes of the above calculationthis Section 5, the “fair market value” value of one share Warrant Share as of Common Stock a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the date of the exercise of this Warrant; (iii) if traded over-the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices for (whichever is applicable) over the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such securitynet exercise; (iii) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that if this Warrant is being exercised upon the closing of the Initial Public Offering, the value will be the initial "Price to Public" of the number of shares of Common Stock into which each Warrant Share is convertible as specified in the exercise final prospectus with respect to such offering; and (iv) if this Warrant is being exercised in connection with a merger or acquisition, the fair market value of its a Warrant Share will be the value offered per such share in such merger or acquisition, as determined in good faith judgmentby the Board of Directors of the Company.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the contrary, after the date on which a Registration Statement, Statement (as defined in Section 7.1 of the Securities Purchase AgreementAgreement dated February 10, 2003, by and among the Company and the persons listed on the Schedule of Purchasers attached thereto as Exhibit A) has first gone effective, if (i) at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: Where: X = Y (A-B) A Where X = the The number of shares of Common Stock Warrant Shares to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (Warrant Share at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share Warrant Share as of Common Stock a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the date of the exercise of the Warrants; (iii) if traded over-the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices for (whichever is applicable) over the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such securitynet exercise; (iii) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; or the per share price of the Company's last equity offering, whichever is lower, provided, that, if the Warrant is being exercised upon the closing of the Initial Public Offering, the value will be the initial "Price to Public" of the number of shares of Common Stock into which each Warrant Share is convertible as specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 5, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) X= --------- A Where: X = Y (A-B) A Where X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 6, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Common Stock specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales bid and asked prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the pink sheets or bulletin board Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price ten (10) trading days prior to the date of such security as reported by Bloomberg or (iv) if determination of fair market value cannot (or such shorter period of time during which such stock was traded over-the-counter or on such exchange); provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.2 in connection with the Company’s initial public offering of its Common Stock, the fair market value per share shall be calculated as of such date on any the per share offering price of the foregoing basesCommon Stock to the public. If the Common Stock is not traded on the over-the-counter market or on an exchange, the fair market value shall be as determined the price per share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors (excluding for purposes of this calculation any director designated by the Holder or any of the Company in the exercise of its good faith judgmentHolder’s affiliates).

Net Exercise. If during In the Exercise Period, event of any exercise of this Warrant in connection with a mandatory conversion of the Holder is not permitted to sell Exercise Shares Series A Preferred Stock into shares of the Company’s Common Stock pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share Section 2(c) of the Common Stock is greater than Certificate of Designation, Preferences and Rights of the Exercise Price (at the date of calculation as set forth below)Series A Convertible Preferred Stock, in lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 1(b), the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Series A Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Series A Preferred Stock computed using the following formula: Where: X = Y (A-B) A Where X = the The number of shares of Common Series A Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares of Common Series A Preferred Stock purchasable under in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Series A Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 1(c), the “fair market value” value of one share of Series A Preferred Stock (or Common Stock, to the extent all such Series A Preferred Stock has been converted into the Company’s Common Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, however, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial “Price to Public” of one share of such Series A Preferred Stock (or Common Stock issuable upon conversion of such Series A Preferred Stock) specified in the exercise final prospectus with respect to such offering (net of its good faith judgmentapplicable underwriting commissions).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Preferred Stock to be issued to the Holder (rounded down to the nearest whole share) Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Preferred Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.2 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company’s initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to ------------ Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Preferred Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq Stock Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Preferred Stock specified in the final prospectus with respect to such offering. Notwithstanding any of the preceding, only thirty percent (30%) of the total number of Shares initially issuable upon exercise of its good faith judgmentthis Warrant (which number is subject to adjustment pursuant to Section 9 hereof) may be exercised by the Holder pursuant to this Section 5. The remaining seventy percent (70%) are only exercisable pursuant to Section 4 hereof.

Net Exercise. If during at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration StatementHolder, as defined then this Warrant may also be exercised, in the Purchase Agreementwhole or in part, and at such time by means of a “cashless exercise.” In such event, if the fair market value of one share of the Common Stock Shares is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share Share of the Company’s Common Stock Company (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one Share shall be determined by the Company’s Board of Directors or similar governing body in good faith; provided, however, that the fair market value per share shall mean: (x) if traded on a securities exchange or the NASDAQ National Market, the fair market value of Common Stock the Shares shall mean be deemed to be the closing or last reported sale price of the Shares on such exchange or market on the business day prior to the date of calculation, or (iy) (i) if otherwise traded in an over-the-counter market, fair market value of the Shares shall be deemed to be the average of the closing sales bid and ask prices for of the shares of Common Stock Shares on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable business day prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices date of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentcalculation.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4 above, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise of any additional consideration, Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise attached hereto indicating such election, in which event the Company shall issue to the Holder hereof a number of shares of Common Stock Warrant Shares computed using the following formula: X = Y (A-B) A Where X = the The number of shares of Common Stock Warrant Shares to be issued to the Holder pursuant to the net exercise. Y = the The number of shares Warrant Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net exercise election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made. A = the The fair market value of one share of the Company’s Common Stock (Warrant Share at the date of such calculation) time the net exercise election is made. B = The Exercise Price (as adjusted to the date of such calculationthe net exercise) For purposes of the above calculationthis Section 5, the “fair market value” value of one share Warrant Share as of Common Stock a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the date of the exercise of this Warrant; (iii) if traded over-the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices for (whichever is applicable) over the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such securitynet exercise; (iii) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that if this Warrant is being exercised upon the closing of the Initial Public Offering, the value will be the initial "Price to Public" of the number of shares of Common Stock into which each Warrant Share is convertible as specified in the exercise final prospectus with respect to such offering; and (iv) if this Warrant is being exercised in connection with a merger or acquisition, the fair market value of its a Warrant Share will be the value offered per such share in such merger or acquisition, as determined in good faith judgmentby the Board of Directors of the Company.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock issuable hereunder is PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT; [***] DENOTES OMISSIONS. greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one value per share of Common Stock shall mean (i) (i) be the average of the closing sales prices for of the shares of Common Stock Stock, on the NASDAQ Capital Market or other Eligible Market where securities exchange on which such Common Stock is listed or traded following the Securities Act of 1933, as reported by Bloomberg Financial Markets amended (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable “Act”) (the “Initial Public Offering”), for five trading days immediately prior to the Holder if Bloomberg Financial Markets exercise date. If the Common Stock is not then reporting sales prices of such security) (collectivelytraded on a securities exchange, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, then the fair market value per share of Common Stock shall be as determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 1.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company’s initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Common Stock issuable hereunder is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets twenty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 20) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not actively traded over-the- counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for twenty (20) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Corporation's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Corporation's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean mean, as of any date, (ia) (i) if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed on a national securities exchange, the closing or traded opening price as reported by Bloomberg Financial Markets for composite transactions for such date, (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (iib) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during is not so listed but is traded on the same periodNASDAQ National Market or SmallCap Market, the closing or opening price as reported on the NASDAQ National Market or SmallCap Market on such date or, if there is no sales price for sale occurred on a trading day, then the mean between the highest bid and the lowest asked prices as of the close of business on such periodtrading day, as reported on the last sales price reported by Bloomberg for such periodNASDAQ National Market or SmallCap Market, or (iiic) if neither of the foregoing appliesCommon Stock is not traded on a national securities exchange or the NASDAQ National Market or SmallCap Market, the last sales price of such security in the but is otherwise traded over-the-counter market counter, the arithmetic average of the highest bid and lowest asked prices on such date as quoted on the pink sheets National Association of Securities Dealers Automated Quotation System or bulletin board for such security as reported by Bloombergan equivalent generally accepted reporting service, or (d) if no sales price is so reported for such securitythe Corporation completes a transaction in which it ceases to be a publicly-traded company, the last bid highest price of such security as reported by Bloomberg paid to the Corporation's stockholders (on a per share basis) for their Common Stock or (ive) if fair market value cannot be calculated as of such date on any none of the foregoing basesabove apply, the fair market value shall be as determined a determination made in good faith by the Corporation's Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) X = Y (A-B) --------- A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Common Stock specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder hereof a number of shares of Common Stock computed using the following formula: Y(A - B) X = Y (A-B) -------- A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the Qualified IPO, the value will be the initial "Price to Public" of one share of such Common Stock specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreementimmediately following an IPO, and if the fair market value of one share of the Company’s Common Stock issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one value per share of Common Stock shall mean (i) (i) be the average of the closing sales prices for of the shares of Common Stock Stock, on the NASDAQ Capital Market or other Eligible Market where securities exchange on which such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by following the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectivelyInitial Public Offering, “Bloomberg”) for the 10 consecutive five trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not prior to the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for exercise date. If the Common Stock during the same periodis traded on other than a securities exchange, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, then the fair market value per share of Common Stock shall be as determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the that portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, if the “Company’s Common Stock is traded in a public market, the fair market value” value per share shall be the product of one share of Common Stock shall mean (i) (i) the average of the closing sales prices of a share of Common Stock reported for the five business days immediately before Holder delivers its Notice of Exercise to the Company and (ii) the number of shares of Common Stock on into which each Exercise Share is convertible at the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices time of such security) (collectivelyexercise provided, “Bloomberg”) for however, that in the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market event that this Warrant is not exercised pursuant to this Section 2.1 in connection with the principal Trading Market for the shares Company’s initial public offering of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as the product of (i) the per share offering price to the public of the Company’s initial public offering, and (ii) the number of shares of Common Stock into which each Exercise Share is convertible at the time of such exercise. If the Company’s Common Stock is not traded in a public market, the fair market value of one Exercise Share shall be determined by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentfaith.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, if the Market Price (as defined in the Purchase Agreement, and the fair market value below) of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, elect (the Holder shall "Conversion Right") to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value Market Price of one share of the Company’s Common Stock Exercise Shares (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes If the Common Stock is traded on a national securities exchange or admitted to unlisted trading privileges on such an exchange, or is listed on the National Market System (the "National Market System") of the above calculationNasdaq, the “fair market value” "Market Price" as of one share of Common Stock a specified day shall mean (i) (i) be the average of the closing sales prices for the shares last reported sale price of Common Stock on such exchange or on the NASDAQ Capital National Market System on such date or other Eligible if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the National Market where such System. If the Common Stock is not so listed or traded admitted to unlisted trading privileges, the Market Price as of a specified day shall be the mean of the last bid and asked prices reported by Bloomberg Financial Markets on such date (or a comparable reporting service of national reputation selected x) by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, Nasdaq or (iiy) if an Eligible Market is not reports are unavailable under clause (x) above by the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for National Quotation Bureau Incorporated. If the Common Stock during the same period, or, if there is no sales price for such periodnot so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated Market Price as of such date on any of the foregoing bases, the fair market value a specified day shall be as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during at any time after the Exercise PeriodEffectiveness Deadline there is no effective Resale Registration Statement registering the resale of the Warrant Shares by the Holder, then the Holder is not permitted may elect to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising exercise this Warrant by payment of cash or Net Exercise pursuant to this Section 1(c). At any time that this Warrant may be exercised by checkNet Exercise pursuant to this Section 1(c), if the Company shall receive written notice from the Holder may effect a “net exercise” at the time of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined below) exercise of this Warrant (or that the portion thereof being canceled) by surrender of this Warrant at Holder elects to Net Exercise the principal office of the Company together with the properly endorsed Notice of Exercise in which event Warrant, the Company shall issue deliver to such Holder (without payment by the Holder a of any exercise price in cash) that number of shares of Common Stock Warrant Shares computed using the following formula: Y (A - B) X = Y (A-B) A Where X = the The number of shares of Common Stock Warrant Shares to be issued to the Holder Holder. Y = the The number of shares of Common Stock Warrant Shares purchasable under the this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled cancelled (at the date of such calculation) ). A = the fair market value The Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation) ). B = The Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the calculations). The “fair market valueFair Market Value” of one share of Common Stock shall mean (i) (ix) the average last reported sale price and, if there are no sales, the last reported bid price, of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such last trading day prior to the date of exercise on the trading market on which the Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such securitythe Common Stock) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date), or (iiy) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing appliesdoes not apply, the last sales price of such security in the over-the-counter market on the pink sheets by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.) (the “pink sheets”) or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such securityreported, the last bid price of such security the Common Stock as reported by Bloomberg or (ivz) if the fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.-2-

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly completed and endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales bid and asked prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the Common Stock is listed, whichever is applicable, as published in the Eastern Edition of The Wall Street Journal for the ten (10) trading days prior to the date on which this Warrant is surrendered and payment of the Exercise Price has been paid (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not traded on the pink sheets over-the-counter market or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basesan exchange, the fair market value shall be as determined the price per share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 2.1, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledcancelled pursuant to this Section 2.2) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the that portion of the Warrant being canceled cancelled pursuant to this Section 2.2 (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share Exercise Share shall be determined by the Company’s Board of Common Stock shall mean (i) (i) Directors in good faith; provided, however, that in the average event that this Warrant is exercised pursuant to this Section 2.2 in connection with the closing of the closing sales prices for sale to the public of either shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service units comprised of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average Stock and warrants to purchase shares of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases“Units”), the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company Company’s initial public offering, or to the extent Units are sold in such initial public offering, the per Unit offering price of the Company’s initial public offering, in each case in the exercise initial closing of its good faith judgmentthe such offering, and (ii) the number of shares of Common Stock into which each Exercise Share is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to ------------ Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq Stock Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the initial public offering of the Company, the value will be the initial "Price to Public" of one share of such Preferred Stock (or of the aggregate number of shares of Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise PeriodIn lieu of cash exercising this Warrant, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Holder. Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is Warrants being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price exchanged (as adjusted to the date of such calculation) For purposes ). A = the Market Price on the date of receipt by the Company of the above calculation, exercise documents. B = the Exercise Price of the Warrants being exchanged (as adjusted in accordance with the terms hereof). The “fair market valueMarket Price” of one share of Common Stock on any trading day shall mean (i) (i) be deemed to be the average of the closing sales prices for ask and bid price of the Common Stock over the five (5) trading days immediately preceding receipt by the Company of the exercise documents as officially reported by the principal securities exchange or quotation medium on which the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is are listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by eligible for trading. If the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value Price cannot be calculated as of such date on any of determined pursuant to the foregoing basessentence above, the fair market value Market Price shall be as determined in good faith (using customary valuation methods) by the Board of Directors of the Company based on the information best available to it, including recent arms-length sales of Common Stock to unaffiliated persons. If, within six (6) months from the date of this Warrant, the Holder sells the Exercise Shares and receives, net of commissions, amounts outstanding due from Company, up to a maximum of $100,000, the Holder shall forgive the Debt owed to it by the Company and which shall be deemed paid in full up to the exercise maximum. If that does not occur within six months of its good faith judgmentthe date of this Warrant, the Debt shall remain in full force and effect, regardless of when the Holder is able to sell the Exercise Shares.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Corporation's Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Preferred Stock to be issued to the Holder Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Corporation's Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Preferred Stock shall be determined by the Corporation's Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 at a time when the Corporation's Common Stock is traded in a public market, the fair market value per share shall mean be closing sales price of the Common Stock as reported by such market for the business day immediately proceeding the date of exercise multiplied by (i) (i) one, if the average of the closing sales prices Warrant is exercisable for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise DateStock, or (ii) if an Eligible Market is not the principal Trading Market for the number of shares of Common Stock, the average Stock into which each share of the reported sales prices reported by Bloomberg on class of stock issuable pursuant to this Warrant is convertible at the principal Trading Market for the Common Stock during the same period, ortime of such exercise, if there the Warrant is no sales price exercisable for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither shares of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentCorporation's capital stock other than Common Stock.

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

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed executed Notice of Exercise Exercise, in the form attached hereto as Appendix A, in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Shares (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock Exercise Shares shall mean (i) be determined by the Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.4 in connection with the Company’s IPO, the fair market value per share shall be the product of (i) the average per share offering price to the public of the closing sales prices for Company’s Common Stock in an IPO, and (ii) the number of shares of Common Stock on into which each share of Exercise Shares is convertible at the NASDAQ Capital Market or other Eligible Market where time of such Common Stock is listed or traded as reported exercise. If the Holder does not agree with the Board’s good faith determination of fair market value and notifies the Board within ten (10) calendar days of the delivery by Bloomberg Financial Markets (or a comparable reporting service the Company to the Holder of national reputation such fair market value determination, the fair market value of an Exercise Share shall be determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices Holder; provided, that the fees and expenses of such security) (collectively, “Bloomberg”) for appraisal shall be paid by the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) Company if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in independent appraiser is higher than the exercise Board’s fair market value determination and, if the fair market value of its good faith judgmentthe independent appraiser is less than or equal to the Board’s fair market value determination, then the Holder shall pay the fees and expenses of the appraisal.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 1(b), the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Series E Convertible Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Series E Convertible Preferred Stock computed using the following formula: X = Y x (A-–B) A Where Where: X = the The number of shares of Common Series E Convertible Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares of Common Series E Convertible Preferred Stock purchasable under in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Series E Convertible Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 1(c), the “fair market value” value of one share of Series E Convertible Preferred Stock (or Common Stock, to the extent all such Series E Convertible Preferred Stock has been converted into the Company’s Common Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq Global Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, however, that, if the Warrant is being exercised upon the closing of an IPO, the value will be the initial “Price to Public” of one share of such Series E Convertible Preferred Stock (or Common Stock issuable upon conversion of such Series E Convertible Preferred Stock) specified in the exercise final prospectus with respect to such offering (net of its good faith judgmentapplicable underwriting commissions).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the contrary, after the Effectiveness Deadline Date (as defined in Section 7.2(b) of the Securities Purchase Agreement dated November 7, 2003, (the “Purchase Agreement”) by and among the Company and the persons listed on the Schedule of Purchasers attach thereto as Exhibit A), if (i) the Registration Statement, Statement (as defined in the Purchase Agreement, ) has not been declared effective until such time as the Registration Statement is declared effective or at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during In the Exercise Period, event of any exercise of this Warrant in connection with an automatic conversion of the Holder is not permitted to sell Exercise Shares Series D Preferred Stock into shares of the Company’s Common Stock pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share Section 2(c) of the Common Stock is greater than the Exercise Price (at the date Certificate of calculation as set forth below)Designation, in lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 1(b), the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Series D Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Series D Preferred Stock computed using the following formula: Where: X = Y (A-B) A Where X = the The number of shares of Common Series D Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares of Common Series D Preferred Stock purchasable under in respect of which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Series D Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 1(c), the “fair market value” value of one share of Series D Preferred Stock (or Common Stock, to the extent all such Series D Preferred Stock has been converted into the Company’s Common Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq Global Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, however, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial “Price to Public” of one share of such Series D Preferred Stock (or Common Stock issuable upon conversion of such Series D Preferred Stock) specified in the exercise final prospectus with respect to such offering (net of its good faith judgmentapplicable underwriting commissions).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales bid and asked prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the pink sheets or bulletin board Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price ten (10) trading days prior to the date of such security as reported by Bloomberg or (iv) if determination of fair market value can(or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not be calculated as of such date traded on any of the foregoing basesover-the-counter market or on an exchange, the fair market value shall be as determined the price per share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors Directors; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Company’s initial public offering of its Common Stock, the fair market value per share shall be the per share offering price to the public of the Company in the exercise of its good faith judgmentCompany’s initial public offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary and except as may be limited by the Board of Directors of the Company as set forth below, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of surrendering this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) -------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) ); For purposes of the above calculation, if the “Company's Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the fair market value” value of one share of Common Stock shall mean (i) (i) the average of be the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, stock (or the last sales price reported by Bloomberg for such period, or (iii) if neither mid-point of the foregoing appliesbid and ask price at the closing, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for were reported) as quoted on such security, exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last bid price market trading day prior to the day of such security determination, as reported by Bloomberg in the Wall Street Journal or (iv) if fair market value cannot be calculated such other source as of such date on any of the foregoing bases, the fair market value shall be as determined by the Company's Board of Directors of the Company in the exercise of its good faith judgmentdeems reliable.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a such number of shares of Common Stock computed using the following formula: X = Y (A-–B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the that portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = the Exercise Price (as adjusted to the date of such calculation) For the purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean be determined as follows: (i) (i) if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Company’s Common Stock is listed then traded or traded as reported by Bloomberg Financial Markets (quoted on a nationally recognized securities exchange, inter-dealer quotation system or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basesa “Trading Market”), the fair market value of one share of Common Stock shall be as determined by the closing price or last sale price of a share of Common Stock reported for the business day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company, and (ii) if the Company’s Common Stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of one share of Common Stock in the exercise of its reasonable good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price Shares (at the date of calculation as set forth below), is greater than the Exercise Price, and the Company has complied with the provisions of Section 42A of the Bermuda Act (or other like statutory provision which may affect the Company’s ability to repurchase its Common Shares or to give effect to a cashless exercise of this Warrant), then in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant (including that portion of this Warrant in payment of the Exercise Price to effect such cashless exercise) at the principal office of the Company Company, together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Shares (at the date of such calculation) provided, that such fair market value shall not be less than the then current par value of the Company’s Common Shares B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one of the Company’s Common Shares shall be determined by the Company’s Board of Directors in good faith; provided, however, that if there is a public market for the Common Shares, the fair market value per share of Common Stock shall mean (i) (i) be the average of per share closing price over the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets five (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security5) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or calculation as reported in the Wall Street Journal (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodnot so reported, the last sales price as otherwise reported by Bloomberg for such period, or (iii) if neither the National Association of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentSecurities Dealers Automated Quotation System).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Warrant Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Warrant Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Warrant Stock to be issued to the Holder Y = the number of shares of Common Warrant Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Warrant Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Warrant Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors of (a) the Company initial “price to the public” per share specified in the exercise final prospectus with respect to the initial public offering, and (b) the number of its good faith judgmentshares of Common Stock into which each share of Warrant Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: X = Y (AY(A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets ten (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 10) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for ten (10) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company; provided, that, if the Warrant is being exercised upon the closing of the issuance and sale of shares of Common Stock of the Company in the exercise Company's first underwritten public offering pursuant to an effective registration statement under the Securities Act of its good faith judgment1933, as amended (the "IPO"), the value will be the initial "Price to Public" of one share of Common Stock specified in the final prospectus with respect to such offering multiplied by the number of shares of Common Stock issuable upon conversion of one share of Preferred Stock as of the closing of the IPO.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender delivery of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under Exercise Shares for which the Holder has elected to exercise this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculationexercise) B = Exercise Price in effect (as adjusted to the date of such calculationexercise) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot of one Exercise Share shall be calculated as determined by the Company’s board of such date on any directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Company’s initial public offering of the foregoing basesits Common Stock, the fair market value per Exercise Share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company’s initial public offering, and (ii) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise. In the event the Company consummates an initial public offering during the Exercise Period, immediately prior to the closing of the Company’s initial public offering, this Warrant shall become exercisable for that number of shares of Common Stock of the Company into which the Exercise Shares issuable under this Warrant would then be convertible, so long as such shares, if such Exercise Shares had been exercised prior to such offering, would have been converted into shares of the Company’s Common Stock pursuant to the automatic conversion provisions (or otherwise) of the Company’s Amended and Restated Certificate of Incorporation. In the event this Warrant remains unexercised in whole or in part at the exercise expiration of its good faith judgmentthe Exercise Period and the fair market value of one Exercise Share is greater than the Exercise Price (at such time), this Warrant shall be deemed to be exercised automatically to the extent then exercisable for Exercise Shares pursuant to the provisions of this Section 2.1, without any further action on behalf of the Holder or the Company, immediately prior to the expiration of the Exercise Period.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price applicable exercise price (at the date of calculation as set forth belowbelow)(the “Exercise Price”), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Company, together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean be: (i) (i) if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Company’s Common Stock is listed on any established stock exchange or traded a national market system, including without limitation the Nasdaq National Market or the Nasdaq SmallCap Market of The Nasdaq Stock Market, the closing sales price of the Company’s Common Stock (or the closing bid, if no sales were reported) as quoted by on such exchange or system (as reported by Bloomberg Financial Markets in The Wall Street Journal or such other source as the Company shall reasonably deem reliable) on the day the Warrant and Notice of Exercise (or a comparable reporting service of national reputation selected complying with the requirements above) are received by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, Company; or (ii) if there shall not at the time of exercise be an Eligible Market is not the principal Trading Market established market for the shares of Company’s Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentfaith.

Net Exercise. If during the Exercise Period, This Warrant may be exercised by the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, through a cashless exchange by delivery and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice form of Exercise in which event the Company subscription attached hereto as Schedule 1 duly executed. In such event, Holder shall issue to the Holder a receive that number of shares of Common Stock Warrant Shares in exchange for the Warrant, or portion thereof, computed using the following formula: X = Y (A-A - B) --------- A Where where: X = the number of shares of Common Stock Warrant Shares to be issued to the Holder Holder; Y = the number of shares of Common Stock purchasable Warrant Shares requested to be exercised under this Warrant; A = the Warrant or, if only a portion Market Value (as defined below) of one (1) share of the Warrant is being exercised, the portion of the Warrant being canceled (at Shares on the date of such calculation) A exercise; and B = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted pursuant to the terms of this Warrant). For purposes hereof, the "Market Value" of the Warrant Shares as of a particular date shall be determined as follows: (i) if traded on a national securities exchange or through the Nasdaq Stock Market, the Market Value shall be deemed to be the volume weighted average trading price of the Warrant Shares on such exchange for the five (5) trading days immediately prior to the date of exercise indicated in the form of subscription (or if no reported sales took place on such calculation) For purposes of the above calculationday, the “fair market value” last date on which any such sales took place prior to the date of one share of Common exercise); and (ii) if traded over-the-counter only and not on the Nasdaq Stock Market, the Market Value shall mean (i) (i) be deemed to be the average of the closing sales bid and asked prices for over the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets five (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security5) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, prior to the date of exercise indicated in the form of subscription (or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the no reported sales prices reported by Bloomberg took place on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodday, the last date on which any such sales price reported by Bloomberg for such period, or (iii) if neither took place prior to the date of exercise). If the foregoing applies, the last sales price of such security in Warrant Shares are not traded on the over-the-counter market or through the Nasdaq Stock Market or on an exchange, this Warrant may be exercised by the pink sheets or bulletin board for such security Holder through a cashless exchange as reported by Bloomberg, or if no sales price is so reported for such security, described above but the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any Market Value per share of the foregoing bases, the fair market value Warrant Shares shall be as determined the price per share of the Warrant Shares that the Company could obtain from a willing buyer for Warrant Shares sold by the Company as such price shall be determined in good faith by the Company's Board of Directors of (the Company in the exercise of its good faith judgment"Board").

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkfor cash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”). A Holder who Net Exercises shall have the properly endorsed Notice of Exercise rights described in which event Sections 4(b) and 4(c) hereof, and the Company shall issue to the such Holder a number of shares of Common Stock computed using the following formula: X = (Y * (A-A - B)) / A Where X = the The number of shares of Common Stock to be issued to the Holder Holder. Y = the The number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) this Warrant. A = the The fair market value of one (1) share of the Company’s Common Stock (at the date of such calculation) ). B = The Exercise Price (as adjusted to the date of such calculation) ). For purposes of the above calculationthis Section 5, the “fair market value” value of one a Common Stock shall mean the average of the closing prices of the Common Stock quoted on any exchange or electronic securities market on which the Common Stock are listed, as published in The Wall Street Journal for the thirty (30) trading days immediately prior to the date of determination of fair market value (or such shorter period of time during which such Common Stock were traded on such exchange). In the event that this Warrant is exercised pursuant to this Section 5 in connection with the Initial Public Offering, the fair market value per share of Common Stock shall mean (i) (i) be equal to the average per share offering price to the public of the closing sales prices for Initial Public Offering. If the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed not traded on an exchange or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing baseselectronic securities market, the fair market value shall be as determined the price per Common Share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued Common Stock, as such prices shall be determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.for

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company's Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Preferred Stock to be issued to the Holder Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common 's Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Preferred Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company's Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company's initial public offering pursuant to a registration statement under the Securities Act of such security) 1933, as amended (collectively, the “BloombergIPO”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company's IPO, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the issuance of the Exercise Shares to the Holder is not permitted to sell Exercise Shares pursuant to covered by the Registration Statementregistration statement on Form S-3 (File No. 333-205704) or any other effective registration statement under the Securities Act of 1933, as defined in the Purchase Agreementamended, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu the Company shall be permitted to satisfy its obligation to issue the shares to be issued on exercise of exercising this Warrant by payment of cash or by checkissuing to the Holder, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, and the Holder shall receive Exercise Shares be permitted to exercise all or part of this Warrant by electing to receive, shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender ), in lieu of this Warrant at paying the principal office Exercise Price in immediately available funds. Upon delivery of the Company together with the a properly endorsed Notice of Exercise in which event Exercise, the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-–B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of for which the Warrant is then being exercised, the portion exercised if such exercise were by means of the Warrant being canceled (at the date of such calculation) a cash exercise rather than a cashless exercise A = the fair market value last Weighted Average Price immediately preceding the time of one share delivery of the CompanyNotice of Exercise giving rise to the applicable “cashless exercise”, as set forth in the applicable Notice of Exercise (to clarify, the “last Weighted Average Price” will be the last Weighted Average Price as calculated over an entire Trading Day such that, in the event that this Warrant is exercised at a time that the Principal Market is open, the prior Trading Day’s Common Stock (at the date of such Weighted Average Price shall be used in this calculation) B = Exercise Price (as adjusted to in effect at the date time of exercise If Exercise Shares are issued in such calculationa cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) For purposes of the above calculationSecurities Act, the “fair market value” of one share of Common Stock Exercise Shares shall mean (i) (i) take on the average registered characteristics of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market Warrants being exercised. The Company agrees not to take any position contrary to this Section 2.2, subject to any change in applicable law, regulation or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentguidance.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or other consideration (as contemplated by checkSection 2), the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = X= the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = Y= the number of shares of Common Stock Exercise Shares that are vested and purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculationAs used herein, the “fair market value” of one share of Common Stock shall mean an Exercise Share means, (i) (i) the average of the closing sales prices for the if shares of Common Stock are then traded or quoted on the NASDAQ Capital Market a nationally recognized securities exchange, interdealer quotation system or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basesmarket, the fair market value of a share shall be the volume weighted average price of a share of Common Stock reported for ten (10) trading days immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company [, (ii) if this Warrant is being exercised in connection with an IPO, then the per share offering price to the public of the IPO (or the per share price (expressed as a dollar value) payable in respect of each share of Common Stock if such IPO is in connection with a SPAC transaction)] or (ii)[(iii)] if this Warrant is being exercised in connection with a Change of Control (and not otherwise exercised pursuant to clause (i) above), then the per share price (expressed as a dollar value) payable in respect of each share of Common Stock in connection with such Change of Control. If this Warrant is being exercised in circumstances other than as set forth in clauses (i)[,][or] (ii) [or (iii)] of this paragraph, then “fair market value” shall mean the fair market value per share of the Common Stock as determined by the Company’s Board of Directors of the Company acting reasonably and in the exercise of its good faith judgmentfaith.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall at its option elect to receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Shares (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock Exercise Share shall mean (i) (i) the arithmetic average of the closing sales prices of the Common Stock quoted on a stock exchange or the arithmetic average of the bid and asked prices of the Common Stock in such over-the-counter market in which the Common Stock may be traded, whichever is applicable, for the shares 20 consecutive trading days (or such shorter period of Common Stock on time as the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or actually traded on such stock exchange and/or the over-the-counter market) immediately preceding the relevant date of exercise of the Warrant, as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by in the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, Wall Street Journal; or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, has not been traded on either a stock exchange or (iii) if neither of the foregoing applies, the last sales price of such security in on the over-the-counter market on at any time during the pink sheets or bulletin board for 20 consecutive business days immediately prior to the date of such security as reported by Bloomberg, or if no sales price is so reported for such securitycalculation, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during The Exercise Price also may be paid at the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value Holder’s election by surrender of one share all or a portion of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal for Units to the value (as determined below) of be exercised under this Warrant (or “Net Exercise”). If the portion thereof being canceled) by surrender of this Warrant at Holder elects the principal office of Net Exercise method, the Company together will issue Warrant Units in accordance with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where Where: X = the number of shares of Common Stock Warrant Units to be issued to upon exercise of the Holder Warrant Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) Units requested to be exercised A = the fair market value of one share of the Company’s Common Stock (at 1 Unit on the date of such calculation) exercise of this Warrant B = the Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock a Unit shall mean (i) (i) mean: if at any time the average of the closing sales prices for the shares of Common Stock Units are not listed on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed any securities exchange or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such securitymarket, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot of the Units shall be calculated the highest price per Unit which the Company could obtain from a willing buyer (other than an employee, director or “Affiliate” of the Company, as such term is defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”) for Units sold by the Company, as determined in good faith by its Directors (as defined in the LLC Agreement); if the exercise is in connection with the conversion of the Units to common stock of the Company (“Common Stock”) in order to facilitate a public offering of such date on any Common Stock, and if the Company’s Registration Statement relating to such initial public offering has been declared effective by the SEC, then the fair market value per Unit shall be the initial “Price to Public” of the foregoing basesCommon Stock specified in the final prospectus with respect to the offering, giving effect to the conversion mechanism with respect to such conversion of the Units to Common Stock; if the exercise is not in connection with a public offering, and: if the Units (or the Common Stock, if the Units have been converted to Common Stock) are traded on a securities exchange, the fair market value shall be deemed to be the average of the closing prices over a 5 day period ending 3 days before the day the fair market value of the Units or the Common Stock, as applicable, is being determined; or if the Units (or the Common Stock, if the Units have been converted to Common Stock) are traded over-the-counter, the fair market value shall be deemed to be the average of the closing bid and asked prices quoted on the principal market on which or through which the Units or the Common Stock, as applicable, are traded over the 5 day period ending 3 days before the day the fair market value of the Units or the Common Stock, as applicable, is being determined; if property or securities in addition to or in substitution for Units shall be issuable upon exercise of the Warrant, the fair market value of such property (to the extent such property does not include a security which is listed on any securities exchange or traded in the over-the-counter market, in which fair market value shall be calculated as provided in Section 1(c)(i) - (iii) above) shall be determined in good faith by the Board of Company’s Directors of the Company (as defined in the exercise of its good faith judgmentLLC Agreement).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, Statement (as defined in the Purchase Subscription Agreement) or pursuant to another registration statement that has been declared effective under Securities Act of 1933, as amended, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market NYSE Amex or other Eligible Market where such the Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 five (5) consecutive trading days immediately preceding such prior to the Exercise Date, or (ii) if an Eligible Market the NYSE Amex is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value In lieu of one share of the Common Stock is greater than making a cash payment for the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined defined below) of this Warrant (an Assumed Preferred Stock Purchase Right, the Purchaser may pay all or the such portion thereof being canceled) of such Exercise Price by surrender electing not to receive all of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue such Assumed Purchase Right Shares but only to the Holder a receive that number of shares of Common Stock computed using such Assumed Purchase Right Shares as shall be determined in accordance with the following formula: X = Y (AY(A-B) ------ A Where Where: X = the number of shares of Parent Common Stock to be issued to the Holder Purchaser pursuant to this Section 2.1(e) Y = the number of shares of Common Assumed Purchase Right Shares for which the Assumed Preferred Stock purchasable under the Warrant or, if only a portion Purchase Right is being exercised as of the Warrant date the Assumed Preferred Stock Purchase Right is being exercised, exercised (the portion of the Warrant being canceled (at the date of such calculation"EXERCISE DATE") A = the fair market value of one closing price per share of the Company’s Parent Common Stock (at as reported by The Nasdaq National Market, rounded to the date fourth decimal place as of the applicable Exercise Date of a share of Parent Common Stock constituting such calculation) Assumed Purchase Right Shares B = the exercise price in effect as of the applicable Exercise Price (as adjusted to the date Date of a share of Parent Common Stock constituting such calculation) Assumed Purchase Right Shares For purposes of the above calculationthis Section 2(e), the “fair market value” "Exercise Price" for all or any portion of one share the Assumed Purchase Right Shares held by a Purchaser shall equal (a) the Assumed Preferred Stock Purchase Price, multiplied by (b) the number of Assumed Purchase Right Shares payable in respect of the number of shares of Parent Common Stock shall mean (i) (i) for which the average Assumed Preferred Stock Purchase Right is being exercised. The Purchaser may elect to make payment of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market all or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices any portion of such securityaggregate Exercise Price pursuant to, and in the manner set forth in this Section 2.1(e) (collectively, “Bloomberg”) for by submitting to Genzyme after the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the Effective Time at its principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price office a notice of such security in the over-the-counter market on the pink sheets or bulletin board for such security net issue exercise, which is attached hereto as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.EXHIBIT C.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash cash, check or by checkcancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the this Warrant or, if only a portion of the Warrant is being exercised, the that portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot of one Exercise Share shall be calculated as determined by the Company’s Board of such date on any Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.2 in connection with the Company’s initial public offering of the foregoing basesits Common Stock, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company Company’s initial public offering, and (ii) the number of shares of Common Stock into which each Exercise Share is convertible at the time of such exercise. If the Holder has not exercised this Warrant prior to the expiration of this Warrant, this Warrant shall automatically be deemed to be exercised in full in the exercise manner set forth in Section 2, without any further action on behalf of its good faith judgmentthe Holder, immediately prior to such expiration.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock New Security issuable hereunder is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock the New Security computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock the New Security purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock of the New Security purchasable under the Warrant (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes hereof, where a public market exists for the New Securities at the time of such exercise, the fair market value of a share of the above calculation, the “fair market value” of one share of Common Stock New Security shall mean (i) (i) the average closing price of the closing sales prices for the New Security (or equivalent shares of Common Stock on underlying the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by New Security if the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets New Security is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock)) is traded or the closing price quoted on any exchange or electronic securities market on which the pink sheets New Security (or bulletin board equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock) is listed, whichever is applicable, as published in The Wall Street Journal for such security as reported by Bloomberg, or if no sales price the trading day immediately prior to the date of determination of fair market value. In the event that this Warrant is so reported for such securityexercised in connection with the Company’s initial public offering (the “IPO”), the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot per share of the New Security shall be calculated as the product of (a) the per share offering price to the public of the IPO, and (b) the number of shares of Common Stock into which each share of the New Security is convertible at the time of such date exercise. If the New Security (or equivalent shares of Common Stock underlying the New Security if the New Security is not Common Stock) is not traded on any of the foregoing basesover-the-counter market, an exchange or an electronic securities market, the fair market value shall be as determined the price per share of the New Security that the Company could obtain from a willing buyer for shares of the New Security sold by the Company from authorized but unissued shares of the New Security, as such prices shall be determined in good faith by the Company’s Board of Directors Directors. For the avoidance of doubt, unless otherwise exercised, the Company in Warrant shall survive the exercise of its good faith judgmentIPO.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the contrary, after the Effectiveness Deadline Date (as defined in Section 7.2(b) of the Securities Purchase Agreement dated December 17, 2004, (the "Purchase Agreement") by and among the Company and the persons listed on the Schedule of Purchasers attach thereto as Exhibit A), if (i) the Registration Statement, Statement (as defined in the Purchase Agreement, ) has not been declared effective until such time as the Registration Statement is declared effective or at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ----- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a elect (the “net exercise” of this Warrant, in which event, if so effected, the Holder shall Conversion Right”) to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) be the product of (i) the average daily Market Price (as defined below) during the period of the closing sales prices most recent 10 days, ending on the last business day before the effective date of exercise of the Conversion Right, on which the national securities exchanges were open for trading and (ii) the number of shares of the Common Stock (as defined herein) into which each Exercise Share is convertible on such date. If the Common Stock is traded on a national securities exchange or admitted to unlisted trading privileges on such an exchange, or is listed on the National Market System (the “National Market System”) of the Nasdaq, the Market Price as of a specified day shall be the last reported sale price of Common Stock on such exchange or on the NASDAQ Capital National Market System on such date or other Eligible if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange or on the National Market where such System. If the Common Stock is not so listed or traded admitted to unlisted trading privileges, the Market Price as of a specified day shall be the mean of the last bid and asked prices reported by Bloomberg Financial Markets on such date (or a comparable reporting service of national reputation selected x) by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, Nasdaq or (iiy) if an Eligible Market is not reports are unavailable under clause (x) above, by the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for National Quotation Bureau Incorporated. If the Common Stock during the same period, or, if there is no sales price for such periodnot so listed or admitted to unlisted trading privileges and bid and ask prices are not reported, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated Market Price as of such date on any of the foregoing bases, the fair market value a specified day shall be as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during the Exercise PeriodNotwithstanding anything contained in Section 2(a) above, the Holder is not permitted holder of the Warrant may also elect to sell exercise this Warrant on a “net exercise” basis by (i) the surrender of the Warrant, together with a completed Exercise Shares pursuant Agreement indicating a net exercise, to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share Secretary of the Common Stock is greater than Company at its principal offices and (ii) full compliance with the Exercise Price (at the date other applicable provisions of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect Warrant. Upon a “net exercise” of this the Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (Y) (A-B) A Where Where: X = the number of shares of Common Stock to be issued to the Holder Holder. Y = the total number of shares of Common Stock purchasable under the Warrant issuable upon exercise of this Warrant, or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled exercised (at the date of such calculation) expressed as a fraction). A = the fair market value Fair Market Value Price of one share of the Company’s Common Stock (at the date of such calculation) Stock. B = Exercise Price (as adjusted to the date of such calculation) Price. For purposes of the above calculationthis Warrant, the “fair market value‘Fair Market Value Price” of one a share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder prices, if Bloomberg Financial Markets is available, and, if not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stockavailable, the average of the reported sales bid and asked prices reported by Bloomberg for the Common Stock, as applicable, on the principal Trading Market market therefor for the Common Stock during five (5) Trading Days preceding the same period, or, if there day which is no sales price for such period, two (2) business days prior to the last sales price reported by Bloomberg for such period, or (iii) if neither day of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloombergexercise, or if no sales such price is so reported for such securityavailable, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, then the fair market value shall be as determined in good faith by a majority of the Board of Directors (excluding any director nominated by or otherwise affiliated with the Holder or an affiliate of the Holder), and in making such determination it shall not give consideration to any discount related to shares representing minority interest or related to any illiquidity or lack of marketability of shares arising from restrictions on transfer under federal or state securities laws. If the Holder of the Warrant to be exercised disagrees with such determination of Fair Market Value Price, such Holder shall provide written notice to the Company thereof (a “Value Dispute”) and the Fair Market Value Price of a share of Common Stock as of the day of exercise shall be determined by the following procedures. Each of the Company, on the one hand, and the Holder submitting the Value Dispute, on the other hand, shall appoint an independent appraiser, each of whom shall independently determine the Fair Market Value Price per share of Common Stock (the “Appraised Values”). If the higher of the Appraised Values is not more than 25% higher than the lower of the Appraised Values, then the Fair Market Value Price per share will be the average of the two Appraised Values. If the higher of the Appraised Values is more than 25% higher than the lower of the Appraised Values, then the parties shall appoint a third independent appraiser who shall, within thirty (30) days following receipt of the Appraised Values, select one of the two Appraised Values as the Fair Market Value Price per share which is closest to the Fair Market Value Price per share determined by such third independent appraiser (the “Third Appraiser’s Determination”). The Third Appraiser’s Determination shall be binding on and non-appealable by the Company and the Holder of the Warrant to be exercised. In the event of a Third Appraiser’s Determination, if the aggregate amount by which the Fair Market Value Price of the Warrant Shares being exercised exceeds the aggregate Exercise Price is less than $5,000,000, the cost of all independent appraisers shall be paid by the Holder, and if the amount of such excess is $5,000,000 or more, each of the Company and the Holder shall pay the costs of the independent appraiser approved by it and the cost of the third independent appraiser shall be split equally by the Company and the Holder. In calculating the aggregate value of the Warrant for purposes of the foregoing agreement regarding allocation of appraisal expenses, there shall be added to the aggregate value determined as described above, the aggregate value determined in connection with the same procedure under any Warrant held by an affiliate of the Holder and exercised as of (or within three business days of) the exercise date of this Warrant. Notwithstanding the foregoing, in the exercise event the Warrant is exercised in connection with the Company’s initial public offering of its good faith judgmentCommon Stock, the fair market value per share shall be the per share offering price to the public of the Common Stock in the Company’s initial public offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, ------------ the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the trading day immediately preceding the date of delivery of the Notice of Exercise (iit being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express) on the date of delivery of such Notice); (ii) if traded over- the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices (whichever is applicable) on the trading day immediately preceding the date of delivery of the Notice of Exercise (it being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express) on the date of delivery of such Notice); and (iii) if there is no public market for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company. Notwithstanding the foregoing, if the Warrant is being exercised upon the closing of the Company's initial underwritten public offering of common stock (the "IPO"), the value will be the initial "Price to Public" of one share of such Common Stock specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Preferred Stock to be issued to the Holder Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Preferred Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company’s initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales bid and asked prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the pink sheets or bulletin board Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price ten (10) trading days prior to the date of such security as reported by Bloomberg or (iv) if determination of fair market value can(or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not be calculated as of such date traded on any of the foregoing basesover-the-counter market or on an exchange, the fair market value shall be as determined the price per share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Class B Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder hereof a number of shares of Class B Common Stock computed using the following formula: Y(A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Class B Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Class B Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Class B Common Stock (or, to the extent all such Class B Common Stock has been redesignated into the Company's Common Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company; provided, that, if the Warrant is being exercised upon the closing of the issuance and sale of shares of Common Stock of the Company in the exercise Company's first underwritten public offering pursuant to an effective registration statement under the Securities Act of its good faith judgment1933, as amended (the "IPO"), the value will be the initial "Price to Public" of one share of such Class B Common Stock (or Common Stock issuable upon conversion of such Class B Common Stock) specified in the final prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value In lieu of one share of the Common Stock is greater than paying the Exercise Price (at the date of calculation as set forth below), provided in lieu of exercising this Warrant by payment of cash or by check6(a) above, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this the Warrant (or by indicating on the portion thereof being canceled) by surrender notice of this Warrant at exercise that the principal office of the Company together with the properly endorsed Notice of Exercise Holder is making such election, in which event the Company shall issue to the Holder Fresenius a number of shares of Common Stock (calculated to the nearest share) computed using the following formula: X = Y (AX= Y(A-B) --------- A Where X = X= the number of shares of Common Stock to be issued to the Holder Y = Fesenius. Y= the number of shares of Common Stock purchasable under the Warrant or, if only a portion of for which the Warrant is being exercised, . A= the portion of the Warrant being canceled (at the date of such calculation) A = the current fair market value of one share of Common Stock. B= the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” purchase price of one share of Common Stock under the Warrant (initially $5.00). As used herein, current fair market value of Common Stock shall mean (i) (i) mean, with respect to each share of Common Stock: the average of the closing sales prices for of the shares of Company's Common Stock sold on all securities exchanges on which the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by may at the Company and reasonably acceptable to the Holder time be listed, or, if Bloomberg Financial Markets is not then reporting there have been no sales prices of on any such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stockexchange on any day, the average of the reported sales highest bid and lowest asked prices reported by Bloomberg on all such exchanges at the principal Trading Market for the Common Stock during the same periodend of such day, or, if there on any day the Common Stock is no sales price for such periodnot so listed, the last sales average of the representative bid and lowest asked price on such day in the domestic over-the counter market as reported by Bloomberg for such periodthe National Quotation Bureau, Incorporated, or (iii) if neither of any similar successor organization. If at any time the foregoing applies, Common Stock is not listed on any securities exchange or not quoted in the last sales price of such security in NASDAQ System or the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such securitymarket, the last bid price of such security as reported by Bloomberg or (iv) if current fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value Common Stock shall be the highest price per share which the Company could obtain from an independent, willing buyer (not a current employee or director) for shares of Common Stock sold by the Company, from authorized but unissued shares, as determined by the Board of Directors in good faith. In the event that the Holder does not agree with such determination, the price shall be determined by the regular accountants of the Company in the exercise of its good faith judgmentutilizing customary valuation principles.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, ------------ the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the trading day immediately preceding the date of delivery of the Notice of Exercise (iit being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); (ii) if traded over-the- counter, the value shall be deemed to be the average of the closing sales bid or sale prices (whichever is applicable) on the trading day immediately preceding the date of delivery of the Notice of Exercise (it being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); and (iii) if there is no active public market for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the Company's first underwritten public offering of common stock (the "IPO"), the value will be the initial "Price to Public" of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Shares is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share Share of the Company’s Common Stock Company (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one Share shall be determined by the Company’s Board of Directors or similar governing body in good faith but shall in no event be less than the then-current liquidation value thereof; provided, however, that in the event the Company makes an initial public offering of its Shares the fair market value per share shall mean: (x) if traded on a securities exchange or the NASDAQ National Market, the fair market value of Common Stock the Shares shall mean (i) (i) be deemed to be the average of the closing sales or last reported sale prices for of the shares of Common Stock Shares on such exchange or market over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30-day period ending five business days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices date of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datecalculation, or (iiy) if otherwise traded in an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloombergmarket, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value Shares shall be as determined by deemed to be the Board of Directors average of the Company in closing bid and ask prices of the exercise Shares over the 30-day period ending five business days prior to the date of its good faith judgmentcalculation.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth belowexercise), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one value means on any date, as it relates to a share of the Company’s Common Stock shall mean (each a “Share”): (i) if the Shares are readily tradable on an established securities market, (ix) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company high and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales low prices of such security) (collectivelyShares as reported on the principal national securities exchange on which the Shares are then listed on the date specified herein, “Bloomberg”) for or if there were no sales on such date, on the 10 consecutive trading days immediately next preceding such Exercise Dateday on which there were sales, or (iiy) if an Eligible Market is such Shares are not the principal Trading Market for the shares of Common Stocklisted on a national securities exchange, the average of the last reported sales prices bid price, as reported by Bloomberg on the principal Trading Market for the Common Stock during the same periodFinancial Industry Regulatory Authority, orInc. or a similar organization, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by BloombergShares for each of the twenty (20) business days preceding the specified date, or (ii) if no sales price is so reported for such securitythe Shares are not readily tradable on an established securities market, the last bid price value determined by any means determined fair and reasonable by the board of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any directors of the foregoing basesCompany, the fair market value which determination shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentfinal and binding on all parties.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly completed and endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = X= the number of shares of Common Stock to be issued to the Holder Y = Y= the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = A= the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = B= Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) the average of the closing sales bid and asked prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the Common Stock is listed, whichever is applicable, as published in the Eastern Edition of The Wall Street Journal for the ten (10) trading days prior to the date on which this Warrant is surrendered and payment of the Exercise Price has been paid (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not traded on the pink sheets over-the-counter market or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basesan exchange, the fair market value shall be as determined the price per share that the Company could obtain from a willing buyer for Common Stock sold by the Company from authorized but unissued shares, as such price shall be determined in good faith by the Company’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If Notwithstanding any provisions herein to the contrary, if during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and Period the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Global Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the NASDAQ Global Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-A - B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company’s Common Stock, the fair market value of one share of Common Stock Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial “Price to Public” of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If Notwithstanding any provisions herein to the contrary, if during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and Period the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = Y= the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = A= the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = B= the Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, period or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, period or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by BloombergBloomberg or, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.. 2.2

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Series B Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Series B Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Series B Preferred Stock to be issued to the Holder Y = the number of shares of Common Series B Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Series B Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Series B Preferred Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company’s initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Series B Preferred Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Warrant Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Warrant Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Warrant Stock to be issued to the Holder Y = the number of shares of Common Warrant Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Warrant Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Warrant Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors of (a) the Company initial “price to the public” per share specified in the exercise final prospectus with respect to the initial public offering, and (b) the number of its good faith judgmentshares of Common Stock into which each share of Warrant Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise PeriodPeriod (a) a registration statement covering the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”), or an exemption from registration, is not available for the issuance and resale of such Unavailable Warrant Shares, the Holder is not permitted to sell Exercise Shares pursuant to may, in its sole discretion or (b) the Registration Statement, Fair Market Value (as defined in the Purchase Agreement, and the fair market value below) of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this WarrantWarrant in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Exercise Price, in which event, if so effected, the Holder shall receive Exercise Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender delivery of this Warrant the properly endorsed Notice of Exercise at the principal office of the Company together with the properly endorsed Notice of Exercise Company, in which event the Company shall issue to the Holder a number of shares of the Common Stock computed using the following formula: formula (a “Net Exercise”): X = Y (AY(A-B) A Where X = the number of shares of Common Stock Warrant Shares to be issued to the Holder Holder. Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Shares with respect to which this Warrant is being exercised, exercised (which shall include both the number of Warrant Shares issued to the Holder and the number of Warrant Shares subject to the portion of the Warrant being canceled (at cancelled in payment of the date of such calculation) Exercise Price). A = the fair market value Fair Market Value (as defined below) of one share of the Company’s Common Stock (at the date of such calculation) ). B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment).

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the ------------ Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock {the "Common Stock"}) as of a particular date shall mean be determined as follows: (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the closing price of the securities on such exchange on the trading day immediately preceding the date of delivery of the Notice of Exercise (iit being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices (whichever is applicable) on the trading day immediately preceding the date of delivery of the Notice of Exercise (it being understood that the original Warrant may be surrendered on the subsequent day if such original Warrant is provided to an overnight courier service (eg, Federal Express); and (iii) if there is no active public market for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the Company's first underwritten public offering of common stock (the "IPO"), the value will be the initial "Price to Public" of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Shares is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Shares to be issued to the Holder Y = the number of shares of Common Stock Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share Share of the Company’s Common Stock Company (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one Share shall be determined by the Company's Board of Directors or similar governing body in good faith but shall in no event be less than the then-current liquidation value thereof; provided, however, that in the event the Company makes an initial public offering of its Shares the fair market value per share of Common Stock shall mean mean: (i) if the Warrant is being converted in connection with and contingent upon a public offering of the Shares, and if the Company's registration statement relating to such public offering has been declared effective by the U.S. Securities and Exchange Commission, then the initial "Price to Public" specified in the final prospectus with respect to such offering; or (iii) if the Warrant is not being converted in connection with and contingent upon a public offering of the Company's securities, then as follows: (x) if traded on a securities exchange or the NASDAQ National Market, the fair market value of the Shares shall be deemed to be the average of the closing sales or last reported sale prices for of the shares of Common Stock Shares on such exchange or market over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30-day period ending five business days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices date of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datecalculation, or (iiy) if otherwise traded in an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloombergmarket, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value Shares shall be as determined by deemed to be the Board of Directors average of the Company in closing bid and ask prices of the exercise Shares over the 30-day period ending five business days prior to the date of its good faith judgmentcalculation.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) X = ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.Nasdaq

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant pursuant to Section 2.1, unless a registration statement under the Securities Act providing for the resale of the Exercise Shares and the Initial Shares is in effect by payment of cash or by checkthe date that is one hundred and fifty (150) days following the Closing pursuant to the Registration Rights Agreement and such registration statement remains in effect throughout the Effectiveness Period (as defined in the Registration Rights Agreement), the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceledexercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled exercised (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean (i) (i) shall, if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed on any established stock exchange or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Nasdaq Global Market for or the Common Stock during Nasdaq Capital Market, be the same period, or, if there is no closing sales price for such periodstock (or the closing bid, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of exercise, as reported for in The Wall Street Journal or such security, other source as the last bid price Board of Directors of the Company deems reliable. In the absence of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of markets for the foregoing basesCommon Stock, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentfaith.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Corporation's Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth belowexercise), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Preferred Stock to be issued to the Holder Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Corporation's Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Preferred Stock shall mean (i) (i) be determined by the average Corporation's Board of Directors in good faith as of the closing sales prices for date of exercise; provided, however, that in the shares event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Corporation's initial public offering of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Corporation's initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to SECTION 5, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise of any additional consideration, shares of Common Stock from the Vested Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Vested Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis SECTION 6, the “fair market value” value of one share of Common Stock as of a particular date shall mean be determined as follows: (i) if traded on a securities exchange or on the National Market System of the NASDAQ Stock Market, the value shall be deemed to be the average of the daily closing price of common stock of the Company as reported on such securities exchange or the National Market System of the NASDAQ Stock Market (ias reported in THE WALL STREET JOURNAL or, if not reported therein, in another authoritative source) for the five (5) consecutive full trading days (in which such shares are traded on such securities exchange or the National Market System of the NASDAQ Stock Market) ending at the close of trading on the trading day immediately preceding such particular date; (ii) if traded over-the-counter, the value shall be deemed to be the average of the closing sales bid or sale prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock (whichever is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”applicable) for the 10 five (5) consecutive full trading days ending at the close of trading on the trading day immediately preceding such Exercise Date, or particular date; and (iiiii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company in the exercise Company. The portion of its good faith judgmentthis Warrant which is canceled pursuant to this Section 6 shall be deemed to have been exercisable for Vested Shares.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, ------------ the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise Exercise, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the Company's first underwritten public offering of common stock (the "IPO"), the value will be the initial "Price to Public" of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.

Net Exercise. If Notwithstanding any provisions herein to the contrary, if during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and Period the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, or by cancellation of indebtedness, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Company’s Series B Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Series B Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Series B Preferred Stock to be issued to the Holder Y = the number of shares of Common Series B Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Series B Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Series B Preferred Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share shall be as determined by the Board product of Directors (i) the per share offering price to the public of the Company in Company’s initial public offering, and (ii) the exercise number of its good faith judgmentshares of Common Stock into which each share of Series B Preferred Stock is convertible at the time of such exercise.

Net Exercise. If Notwithstanding any provisions herein to the contrary, if during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and Period the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = Y= the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = A= the fair market value of one share of the Company’s Common Stock (at the date of such calculation) B = B= the Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market American Stock Exchange or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”“) for the 10 consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible Market the American Stock Exchange is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, period or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, period or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by BloombergBloomberg or, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Corporation's Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation shall issue to the Holder a number of shares of Common Preferred Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Preferred Stock to be issued to the Holder Y = the number of shares of Common Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Corporation's Preferred Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Preferred Stock shall be determined by the Corporation's Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 at a time when the Corporation's Common Stock is traded in a public market, the fair market value per share shall mean be closing sales price of the Common Stock as reported by such market for the business day immediately proceeding the date of exercise multiplied by (i) (i) one, if the average of the closing sales prices Warrant is exercisable for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise DateStock, or (ii) if an Eligible Market is not the principal Trading Market for the number of shares of Common Stock, the average Stock into which each share of the reported sales prices reported by Bloomberg on class of stock issuable pursuant to this Warrant is convertible at the principal Trading Market for the Common Stock during the same period, ortime of such exercise, if there the Warrant is no sales price exercisable for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither shares of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentCorporation's capital stock other than Common Stock.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provision herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Share is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the that portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Share (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one Exercise Share shall be determined by the Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Company’s initial public offering of its Common Stock, the fair market value per share shall be the product of (i) the per share offering price to the public of the Company’s initial public offering, and (ii) the number of shares of Common Stock into which each Exercise Share is convertible at the time of such exercise; provided further, that if this Warrant is exercised following the Company’s initial public offering of its Common Stock, the fair market value of each Exercise Share shall mean (i) be the product of (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange or electronic securities market on which the pink sheets or bulletin board Common Stock is listed, whichever is applicable, as published in The Wall Street Journal for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price thirty (30) trading days prior to the date of such security as reported by Bloomberg or (iv) if determination of fair market value cannot be calculated as (or such shorter period of time during which such shares of Common Stock were traded over-the-counter or on such exchange), and (ii) the number of shares of Common Stock into which each Exercise Share is convertible at the time of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgmentexercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) -------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “"fair market value” " of one share of Common Stock shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Nasdaq National Market or other Eligible Market trading market where such Common Stock security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “"Bloomberg”") for the 10 ten (10) consecutive trading days immediately preceding such Exercise Datedate, or (ii) if an Eligible the Nasdaq National Market is not the principal Trading Market trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and Period the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), and a registration statement covering the shares that are the subject of the Exercise Notice (the “Unavailable Exercise Shares”) or an exemption from registration is not available for the resale of the Unavailable Exercise Shares, in lieu of exercising this Warrant by payment of cash or by check, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall receive Exercise Shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Exercise Shares with respect to which this Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) exercised A = the fair market value Fair Market Value (as defined below) of one share of the Company’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculationthis Warrant, the “fair market valueFair Market Value” of one share of Common Stock shall mean (i) (i) the average of the closing sales prices price for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such the Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for on the 10 consecutive last trading days immediately preceding such day prior to the Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported closing sales prices price reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, on the last sales price reported by Bloomberg for such periodtrading day prior to the Exercise Date, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment. For purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as in effect on the date hereof, assuming the Holder is not an affiliate of the Company, it is intended that the Exercise Shares issued in a net exercise pursuant to this Section 2.1 shall be deemed to have been acquired by the Holder, and the holding period for the Exercise Shares shall be deemed to have commenced, on the date this Warrant was originally issued.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below)contrary, in lieu of exercising this Warrant for cash, by payment surrender of cash or by checkthe Warrant (together with a duly executed copy of a Notice of Exercise in the form attached hereto) to the Company at its principal offices, the Holder may effect a “net exercise” elect to receive such reduced number of this Warrant, in which event, if so effected, the Holder shall receive Exercise Series B-3 Preferred Shares equal to the value (as determined defined below) of this Warrant (or the portion thereof hereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise cancelled), in which event the Company shall issue to the Holder a holder hereof the number of shares of Common Stock Series B-3 Preferred Shares computed using the following formula: X = Y (A-B) A Where Where: X = the The number of shares of Common Stock Series B-3 Preferred Shares to be issued to the Holder Holder; Y = the The number of shares of Common Stock purchasable Series B-3 Preferred Shares issuable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) ); A = the The fair market value of one share of the Company’s Common Stock Series B-3 Preferred Share (at the date of such calculation) ); and B = The Exercise Price (as adjusted to the date of such calculation) ). For purposes of the above calculationthis Section 6, the “fair market value” value of one share Series B-3 Preferred Share (or, to the extent all such Series B-3 Preferred Shares have been converted into the Company’s Ordinary Shares) as of Common Stock a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the date the Holder if Bloomberg Financial Markets is not then reporting sales prices delivers the applicable Notice of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or Exercise; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during date the same period, or, Holder delivers the applicable Notice of Exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, however, that if the Warrant is being exercised in connection with the exercise initial public offering of its good faith judgmentthe Company, the fair market value per share shall be the product of (i) the per share offering price to the public of the Company’s initial public offering, and (ii) the number of Ordinary Shares into which each Series B-3 Preferred Share is convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Company's Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” may, commencing on May 12, 2004 and thereafter for the full term of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the this Warrant or, if only a portion of the this Warrant is being exercised, the portion of the this Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s 's Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean be on any particular date (i) (ia) the average last reported closing bid price per share of Common Stock on such date on the Nasdaq SmallCap Market (or the Nasdaq National Market, as the case may be), or (b) if there is no such price on such date, then the closing bid price on the Nasdaq SmallCap Market (or the Nasdaq National Market, as the case may be) on the date nearest preceding such date, or (c) if the Common Stock is not then listed or quoted on the Nasdaq SmallCap Market or the Nasdaq National Market, and if prices for the Common Stock are then reported in the "pink sheets" published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the closing sales prices for Common Stock so reported, or (d) if the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is are not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basespublicly traded, the fair market value shall be of a share of Common Stock as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Shares is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Exercise Shares computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock Exercise Shares (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock the Exercise Shares shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Holder if Bloomberg Financial Markets is not then reporting sales prices Company’s initial public offering of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (ii) if an Eligible Market is not the principal Trading Market for the shares of its Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value per share of Exercise Shares shall be as determined by the Board of Directors per share offering price to the public of the Company in the exercise of its good faith judgmentCompany’s initial public offering.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Stock computed using the following formula: Y (A - B) -------------- X = Y (A-B) A Where Where: X = the number of shares of Common Stock to be issued to the Holder pursuant to this net exercise; Y = the number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made A = the fair market value of one share of the Company’s Common Stock (at the date of such calculation) time the net issue election is made; B = the Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Common Stock (or, to the extent all such Common Stock has been converted into the Company's Common Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company in the exercise of its good faith judgmentCompany.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Corporation’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company Corporation together with the properly endorsed Notice of Exercise in which event the Company Corporation shall issue to the Holder a number of shares of Common Stock computed using the following formula: X = Y (A-B) A Where X = the number of shares of Common Stock to be issued to the Holder Y = the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the CompanyCorporation’s Common Stock (at the date of such calculation) B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock shall mean mean, as of any date, (ia) (i) if the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed on a national securities exchange, the closing or traded opening price as reported by Bloomberg Financial Markets for composite transactions for such date, (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or (iib) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during is not so listed but is traded on the same periodNASDAQ National Market or SmallCap Market, the closing or opening price as reported on the NASDAQ National Market or SmallCap Market on such date or, if there is no sales price for sale occurred on a trading day, then the mean between the highest bid and the lowest asked prices as of the close of business on such periodtrading day, as reported on the last sales price reported by Bloomberg for such periodNASDAQ National Market or SmallCap Market, or (iiic) if neither of the foregoing appliesCommon Stock is not traded on a national securities exchange or the NASDAQ National Market or SmallCap Market, the last sales price of such security in the but is otherwise traded over-the-counter market counter, the arithmetic average of the highest bid and lowest asked prices on such date as quoted on the pink sheets National Association of Securities Dealers Automated Quotation System or bulletin board for such security as reported by Bloombergan equivalent generally accepted reporting service, or (d) if no sales price is so reported for such securitythe Corporation completes a transaction in which it ceases to be a publicly-traded company, the last bid highest price of such security as reported by Bloomberg paid to the Corporation’s stockholders (on a per share basis) for their Common Stock or (ive) if fair market value cannot be calculated as of such date on any none of the foregoing basesabove apply, the fair market value shall be as determined a determination made in good faith by the Corporation’s Board of Directors of the Company in the exercise of its good faith judgmentDirectors.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant Notwithstanding any provisions herein to the Registration Statementcontrary, as defined in the Purchase Agreement, and if the fair market value of one share of the Common Stock Exercise Shares is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or by checkcash, the Holder may effect a “net exercise” of this Warrant, in which event, if so effected, the Holder shall elect to receive Exercise Shares shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock Series E Preferred computed using the following formula: X = Y (A-B) ------- A Where X = the number of shares of Common Stock Exercise Shares to be issued to the Holder Y = the number of shares of Common Stock Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) A = the fair market value of one share of the Company’s Common Stock (at 's Exercise Shares on the date of such calculation) Exercise Date B = Exercise Price (as adjusted to the date of such calculation) For purposes of the above calculation, the “fair market value” value of one share of Common Stock Exercise Shares shall mean (i) (i) the average of the closing sales prices for the shares of Common Stock on the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected be determined by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices Company's Board of such security) (collectivelyDirectors in good faith; provided, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Datehowever, or (ii) if an Eligible Market is not the principal Trading Market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security that in the over-the-counter market on event that this Warrant is exercised pursuant to this Section (A) after the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing basesCompany's initial public offering, the fair market value on the Exercise Date shall be as determined by the Board of Directors closing price of the Company Company's Common Stock on the market on which it is traded and (B) on the date of the Company's initial public offering and the notice of exercise was received prior to such date with a specification that such exercise be effective upon the initial public offering, then the fair market value of one share of Exercise Share shall be the per share offering price to the public of the Company's initial public offering. Thus, if this Warrant is exercised in connection with the exercise Company's initial public offering of its good faith judgmentCommon Stock as provided in (B) above, the fair market value per share of Exercise Shares shall be the product of (i) the per share offering price to the public of the Company's initial public offering and (ii) the number of shares of Common Stock into which each share of Series E Preferred is then convertible at the time of such exercise.

Net Exercise. If during the Exercise Period, the Holder is not permitted to sell Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and the fair market value of one share of the Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in In lieu of exercising this Warrant by payment of cash or by checkpursuant to Section 4, the Holder may effect a “net exercise” of this Warrantelect to receive, in which event, if so effected, without the payment by the Holder shall receive Exercise Shares of any additional consideration, shares of Preferred Stock equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice notice of Exercise such election, in which event the Company shall issue to the Holder holder hereof a number of shares of Common Preferred Stock computed using the following formula: Y (A - B) --------- X = Y (A-B) A Where Where: X = the The number of shares of Common Preferred Stock to be issued to the Holder pursuant to this net exercise; Y = the The number of shares Shares in respect of Common Stock purchasable under which the Warrant or, if only a portion of the Warrant net issue election is being exercised, the portion of the Warrant being canceled (at the date of such calculation) made; A = the The fair market value of one share of the Company’s Common Preferred Stock (at the date of such calculation) time the net issue election is made; B = The Exercise Price (as adjusted to the date of such calculation) the net issuance). For purposes of the above calculationthis Section 5, the “fair market value” value of one share of Preferred Stock (or, to the extent all such Preferred Stock has been converted into the Company's Common Stock Stock) as of a particular date shall mean be determined as follows: (i) (i) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing sales prices for of the shares of Common Stock securities on such exchange over the NASDAQ Capital Market or other Eligible Market where such Common Stock is listed or traded as reported by Bloomberg Financial Markets thirty (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable 30) day period ending three (3) days prior to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading days immediately preceding such Exercise Date, or net exercise election; (ii) if an Eligible Market is not traded over-the-counter, the principal Trading Market for the shares of Common Stock, value shall be deemed to be the average of the reported sales closing bid or sale prices reported by Bloomberg on (whichever is applicable) over the principal Trading Market for thirty (30) day period ending three (3) days prior to the Common Stock during the same period, or, net exercise; and (iii) if there is no sales price for such periodactive public market, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot shall be calculated as of such date on any of the foregoing bases, the fair market value shall be thereof, as determined in good faith by the Board of Directors of the Company Company; provided, that, if the Warrant is being exercised upon the closing of the IPO, the value will be the initial "Price to Public" of one share of such Preferred Stock (or Common Stock issuable upon conversion of such Preferred Stock) specified in the exercise of its good faith judgmentfinal prospectus with respect to such offering.