Contract
EXHIBIT
99.2
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS AND UNTIL
SUCH SECURITIES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION
IS
NOT REQUIRED. THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS
EXERCISE ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 5
OF
THIS WARRANT.
Warrant
No. 2006-___ Number
of
Shares: _____
Date
of
Issuance: March 7, 2006
(subject
to adjustment)
SONTRA
MEDICAL CORPORATION
Void
after March 7, 2011
Sontra
Medical Corporation, a Minnesota corporation (the “Company”), for value
received, hereby certifies that _______________ (including registered assigns,
the “Registered Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company, at any time or from time to time on or after
September 7, 2006 (the “Vesting Date”) and on or before March 7, 2011 at not
later than 5:00 p.m. (Boston, Massachusetts time) up to _________ shares of
Common Stock, $.01 par value per share, of the Company (the “Common Stock”), at
a purchase price of $0.58 per share. The shares purchasable upon exercise of
this Warrant, and the purchase price per share, each as adjusted from time
to
time pursuant to the provisions of this Warrant, are hereinafter referred to
as
the “Warrant Shares” and the “Purchase Price,” respectively.
1. Registration
Rights.
The
Warrant Shares possess certain registration rights pursuant to that certain
Common Stock and Warrant Purchase Agreement, dated as of March 7,
2006,
by and
between the Company and the Investors listed therein (the “Purchase Agreement”).
2 Exercise.
(a) This
Warrant may be exercised by the Registered Holder, in whole or in part, at
any
time following the Vesting Date by surrendering this Warrant, with the purchase
form appended hereto as Exhibit I
duly
executed by such Registered Holder or by such Registered Holder’s duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full
in
cash, by certified or bank check, or by wire transfer of immediately available
funds, in lawful money of the United States, of the Purchase Price payable
in
respect of the number of Warrant Shares purchased upon such exercise.
At
any
time after March 7, 2007 that the Registration Statement (as defined in the
Purchase Agreement) covering the resale of the Warrant Shares is not effective
or is suspended, or that the related prospectus is outdated, defective or
requires a supplement or amendment for any reason, the Registered Holder may,
at
its option during such time, undertake a “cashless exercise” by electing to pay
some or all of the Purchase Price payable upon an exercise of this Warrant
by
canceling a portion of this Warrant exercisable for such number of Warrant
Shares as is determined by dividing (i) the total Purchase Price payable in
respect of the number of Warrant Shares being purchased upon such exercise
by
(ii) the excess of the fair
market value per share of Common Stock as
of the
effective date of exercise,
as
determined pursuant
to subsection 1(e) below, over the Purchase Price per share. If the Registered
Holder wishes to exercise this Warrant pursuant to this method of payment with
respect to the maximum number of Warrant Shares purchasable pursuant to this
method, then the number of Warrant Shares so purchasable shall be equal to
the
total number of Warrant Shares, minus the product obtained by multiplying
(x) the total number of Warrant Shares by (y) a fraction, the
numerator of which shall be the Purchase Price per share and the denominator
of
which shall be the fair
market value per share of Common Stock as
of the
effective date of exercise,
as
determined pursuant
to subsection 1(e) below. Notwithstanding anything herein to the contrary,
on
the termination date of this Warrant, if the conditions set forth above for
a
cashless exercise then exist, this Warrant shall be automatically exercised
via
cashless exercise pursuant to this subsection 2(a).
(b) If
on any
date after the effectiveness of the Registration Statement, the closing price
of
the Common Stock, as
quoted
on the Nasdaq National Market, the Nasdaq Capital Market or the principal
exchange on which the Common Stock is listed, or if not so listed then in the
over-the-counter market as published in The Wall Street Journal, for 20
consecutive trading days equals at least $1.16 (subject to adjustment in the
event of any subdivision, combination or reclassification affecting the Common
Stock), the Company shall have the right, at its option and upon 30 days written
notice to the Registered Holder, to terminate this Warrant; provided that (i)
the Vesting Date shall have occurred, (ii) the Registered Holder shall have
the
right to exercise this Warrant at any time prior to such termination pursuant
to
Section 2(a), and (iii) the Registration Statement shall be effective at all
times during such 30-day notice period. Upon such termination, the Registered
Holder shall have no further rights hereunder.
The
Registered Holder shall have the right to exercise the Warrant until the
termination of the 30-day notice period, provided that such 30-day notice period
terminates prior to March 7, 2011.
(c) Each
exercise of this Warrant shall be deemed to have been effected immediately
prior
to the close of business on the day on which this Warrant shall have been
surrendered to the Company as provided in subsection 2(a) above. At such time,
the person or persons in whose name or names any certificates for Warrant Shares
shall be issuable upon such exercise as provided in subsection 2(d) below shall
be deemed to have become the holder or holders of record of the Warrant Shares
represented by such certificates.
(d) In
the
event of any exercise of the rights represented by this Warrant, certificates
for the Shares so purchased shall be delivered to the Registered Holder within
a
reasonable time and, unless this Warrant has been fully exercised or has
expired, a new Warrant representing the shares with respect to which this
Warrant shall not have been exercised shall also be issued to the Holder within
such reasonable time.
(e) For
purposes of this Warrant, the per share fair market value of the Company’s
Common Stock shall mean:
(i)
If
the
Company’s Common Stock is publicly traded, the per share fair market value shall
be the average of the closing prices of the Common Stock as quoted on the Nasdaq
National Market, the Nasdaq Capital Market or the principal exchange on which
the Common Stock is listed, or if not so listed then the fair market value
shall
be the average of the closing bid prices of the Common Stock in the
over-the-counter market as published in The Wall Street Journal, in each case
for the fifteen trading days ending five trading days prior to the date of
determination of fair market value;
(ii)
If
the
Company’s Common Stock is not so publicly traded, the per share fair market
value shall be such fair market value as is determined in good faith by the
Board of Directors of the Company after taking into consideration factors it
deems appropriate, including, without limitation, recent sale and offer prices
of the capital stock of the Company in private transactions negotiated at arm's
length.
3. Adjustments.
(a) If
outstanding shares of the Company’s Common Stock shall be subdivided into a
greater number of shares or a dividend in Common Stock shall be paid in respect
of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall, simultaneously with
the effectiveness of such subdivision or immediately after the record date
of
such dividend be proportionately reduced and the number of Warrant Shares
issuable upon exercise of the Warrant immediately prior to such subdivision
or
the record date of such dividend shall, simultaneously with the effectiveness
of
such subdivision or immediately after the record date of such dividend, be
proportionately increased. If outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased, and the number
of Warrant Shares issuable upon exercise of this Warrant immediately prior
to
such combination shall, simultaneously with the effectiveness of such
combination, be proportionately reduced.
(b) If
there
shall occur any capital reorganization or reclassification or
change
of securities of the class issuable upon exercise of this Warrant (other than
a
change in par value, or as a result of a subdivision or combination), or in
case
of any merger of the Company with or into another corporation (other
than a merger with another corporation in which the Company is the surviving
corporation),
or in
case of any sale of all or substantially all of the assets of the Company,
the
Company, or such successor or purchasing corporation, as the case may be, shall
duly execute and deliver to the holder of this Warrant a new Warrant (in form
and substance reasonably satisfactory to the holder of this Warrant), or the
Company shall make appropriate provision without the issuance of a new Warrant,
so that the holder of this Warrant shall have the right to receive, at a total
purchase price not to exceed that payable upon the exercise of the unexercised
portion of this Warrant, and in lieu of the shares of Common Stock theretofore
issuable upon exercise of this Warrant, (i) the kind and amount of shares of
stock, other securities, money and property receivable upon such
reclassification, change, merger or sale by a holder of the number of shares
of
Common Stock then purchasable under this Warrant, or (ii) in the case of such
a
merger or sale in which the consideration paid consists all or in part of assets
other than securities of the successor or purchasing corporation, at the option
of the Registered Holder of this Warrant, the securities of the successor or
purchasing corporation having a value at the time of the transaction equivalent
to the fair market value per share of Common Stock at the time of the
transaction, as determined pursuant
to subsection 1(e) above.
The
provisions of this subsection 3(b) shall similarly apply to successive
reclassifications, changes, mergers and transfers.
(c) When
any
adjustment is required to be made pursuant to this Section 3, the Company shall
promptly mail to the Registered Holder a certificate setting forth the Purchase
Price and the number of Warrant Shares issuable upon exercise of this Warrant
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Such certificate shall also set forth the kind and amount
of
stock or other securities or property into which this Warrant shall be
exercisable following such adjustment.
4. Fractional
Shares.
The
Company shall not be required upon the exercise of this Warrant to issue any
fractional shares, but shall make an adjustment therefor in cash on the basis
of
the fair market value per share of Common Stock, as determined pursuant to
subsection 1(e) above.
5. Requirements
for Transfer.
(a) This
Warrant and the Warrant Shares shall not be sold or transferred unless either
(i) they first shall have been registered under the Securities Act of 1933,
as amended (the “Act”), or (ii) the Company first shall have been furnished
with an opinion of legal counsel, reasonably satisfactory to the Company, to
the
effect that such sale or transfer is exempt from the registration requirements
of the Act.
(b) Each
certificate representing Warrant Shares shall bear a legend substantially in
the
following form:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended, and may not be offered, sold or otherwise
transferred, pledged or hypothecated unless and until such securities are
registered under such Act or an opinion of counsel satisfactory to the Company
is obtained to the effect that such registration is not required.”
The
foregoing legend shall be removed from the certificates representing any Warrant
Shares, at the request of the holder thereof, at such time as they become
eligible for resale pursuant to Rule 144(k) under the Act.
6. Representations
and Warranties of Registered Holder.
The
Registered Holder represents and warrants to the Company as
follows:
(a) This
Warrant and the Warrant Shares issuable upon exercise thereof are
being
acquired for the Registered Holder’s own account, not as nominee or agent, and
not with a view to the resale or distribution of any part thereof in violation
of the Act, and the Registered Holder has no present intention of selling,
granting any participation in, or otherwise distributing the same in violation
of the Act. The Registered Holder is not a registered broker dealer or an entity
engaged in the business of being a broker dealer. The Registered Holder
understands that this
Warrant and the Warrant Shares issuable upon exercise thereof
are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Warrant
and the Warrant Shares issuable upon exercise thereof
may be
resold without registration under the Act only in certain limited
circumstances.
(b)
The
Registered Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the purchase
of
this Warrant and the Warrant Shares purchasable pursuant to the terms of this
Warrant and of protecting its interests in connection therewith.
(c)
The
Registered Holder is able to bear the economic risk of the purchase of the
Warrant Shares pursuant to the terms of this Warrant.
7. Reservation
of Stock.
The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant, such number of Warrant Shares and
other stock, securities and property, as from time to time shall be issuable
upon the exercise of this Warrant; provided, however, that if at any time the
Company shall not have sufficient shares so available, the Company shall
promptly take corrective action to remedy such shortfall.
8. Exchange
of Warrants.
Upon
the surrender by the Registered Holder of any Warrant or Warrants, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 5 hereof, issue and deliver to or
upon the order of such Registered Holder, at the Company’s expense, a new
Warrant or Warrants of like tenor, in the name of such Registered Holder or
as
such Registered Holder (upon payment by such Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces
of the Warrant or Warrants so surrendered.
9. Replacement
of Warrants.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company
will
issue, in lieu thereof, a new Warrant of like tenor.
10. Transfers,
etc.
(a) The
Company will maintain a register containing the names and addresses of the
Registered Holders of this Warrant. Any Registered Holder may change its address
as shown on the warrant register by written notice to the Company requesting
such change.
(b) Subject
to the provisions of Section 5 hereof, this Warrant and all rights hereunder
are
transferable, in whole or in part, upon surrender of this Warrant with a
properly executed assignment (in the form of Exhibit II
hereto)
at the principal office of the Company.
(c) Until
any
transfer of this Warrant is made in the warrant register, the Company may treat
the Registered Holder of this Warrant as the absolute owner hereof for all
purposes; provided, however, that if and when this Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary and with no liability whatsoever to the Registered Holder.
11. Mailing
of Notices, etc.
All
notices and other communications from the Company to the Registered Holder
of
this Warrant shall be given by hand, by messenger, mailed by first-class
certified, registered mail, postage prepaid, or by a nationally recognized
overnight delivery company to the address furnished to the Company in writing
by
the last Registered Holder of this Warrant who shall have furnished an address
to the Company in writing. All notices and other communications from the
Registered Holder of this Warrant or in connection herewith to the Company
shall
be given by hand, by messenger, mailed by first-class certified or registered
mail, postage prepaid, or by a nationally recognized overnight delivery company
to the Company at its principal office set forth below. If the Company should
at
any time change the location of its principal office to a place other than
as
set forth in the preamble hereto, it shall give prompt written notice to the
Registered Holder of this Warrant and thereafter all references in this Warrant
to the location of its principal office at the particular time shall be as
so
specified in such notice.
12. No
Rights as Stockholder.
Until
the exercise of this Warrant, the Registered Holder of this Warrant shall not
have or exercise any rights by virtue hereof as a stockholder of the Company.
13. Change
or Waiver.
Any
term of this Warrant may be changed or waived only by an instrument in writing
signed by the party against which enforcement of the change or waiver is sought.
14. Headings.
The
headings in this Warrant are for purposes of reference only and shall not limit
or otherwise affect the meaning of any provision of this Warrant.
15. Governing
Law.
This
Warrant will be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
SONTRA
MEDICAL CORPORATION
By:________________________________
Name:
Title:
EXHIBIT
I
PURCHASE
FORM
To:
Sontra
Medical CorporationDated:____________
00
Xxxxx
Xxxxxxx
Xxxxxxxx,
XX 00000
Attn: Chief
Financial Officer
The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No. ___), hereby irrevocably elects to purchase ________ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment
of
$____________ in lawful money of the United States, representing the full
purchase price for such shares at the price per share provided for in such
Warrant.
Please
issue a certificate or certificates representing said shares in the name of
the
undersigned or in such other name as is specified below:
_________________________________
(Name)
_________________________________
_________________________________
(Address)
The
undersigned hereby represents and warrants that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares
and all representations and warranties of the undersigned set forth in Section
6
of the attached Warrant are true and correct as of the date hereof.
Signature:_____________________
Address:______________________
______________________
EXHIBIT
II
ASSIGNMENT
FORM
FOR
VALUE
RECEIVED, ________________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant
(No.
____) with respect to the number of shares of Common Stock covered thereby
set
forth below, unto:
Name
of Assignee Address Shares
Dated:_____________________ Signature:________________________________
Dated:_____________________ Witness:_________________________________
