Common use of Treatment of Warrant upon a Change of Control Clause in Contracts

Treatment of Warrant upon a Change of Control. (1) In the event of a Change of Control in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities (as defined below) or a combination of cash and Marketable Securities (a “Cash/Public Change of Control”), if this Warrant is outstanding upon the consummation of such Cash/Public Change of Control then (i) if the Fair Market Value (as defined below) of one share of Common Stock is greater than the then applicable Exercise Price, this Warrant may be exercised at the election of the Purchaser as of immediately prior to such Cash/Public Change of Control and (ii) if the Fair Market Value of one share of Common Stock is less than or equal to the then applicable Exercise Price, this Warrant will expire immediately prior to the consummation of such Change of Control. The “Fair Market Value” of one share of Common Stock shall mean (x) the closing price of the Common Stock on the business day prior to the date of exercise on the Nasdaq Capital Market 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 the Common Stock) (collectively, “Bloomberg”) or (y) or if the foregoing does not apply, the last sales price of the Common Stock in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, and, if there are no sales, the last reported bid price of the Common Stock as reported by Bloomberg or, if fair market value cannot be calculated as of such date on either of the foregoing bases, the price determined in good faith by the Company’s Board of Directors.