COMMON STOCK PURCHASE WARRANT To Purchase _______ Shares of Common Stock of Matritech, Inc.
EXHIBIT
4.5
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”),
AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
COMMON
STOCK PURCHASE WARRANT
To
Purchase _______ Shares of Common Stock of
Matritech,
Inc.
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”)
CERTIFIES that, for value received, ______________ (the “Holder”),
is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the six month and
one
day anniversary of January 13, 2006 (the “Initial
Exercise Date”)
and on
or prior to the close of business on the fifth anniversary of the Closing Date
(the “Termination
Date”)
but
not thereafter, to subscribe for and purchase from Matritech, Inc., a
corporation incorporated in the State of Delaware (the “Company”),
up to
________ shares (the “Warrant
Shares”)
of
Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”),
such
number of Warrant Shares being subject to adjustments as provided herein.
Additionally, the Holder of this Warrant may become entitled, upon the
conditions and subject to the limitations on exercise and the conditions
hereinafter set forth, to exercise the Warrant for the Additional
Warrant Shares
(as defined below) at the Additional
Warrant Exercise Price
(as
defined below) and, in such event, this Warrant will be exericisable for the
Additional Warrant Shares at any time prior to the close of business on the
Termination Date. With respect to the Warrant Shares, the purchase price of
one
share of Common Stock under this Warrant shall be $0.65 (the “Warrant
Share Exercise Price”,
and
together with the Additional Warrant Exercise Price, the “Exercise
Price”),
subject to adjustment hereunder. The Warrant Share Exercise Price and the number
of Warrant Shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. Capitalized terms used and not otherwise defined
herein shall
have
the
meanings set forth in that certain Securities Purchase Agreement (the
“Purchase
Agreement”),
dated
January __, 2006, among the Company and the purchasers signatory
thereto.
1. Title
to Warrant.
Prior
to the Termination Date and subject to compliance with applicable laws and
Section 7 of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by
the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed; provided,
however,
during
any 12 month period and except for transfers to an Affiliate of the Holder,
the
Holder, collectively with successor Holders, may not transfer this Warrant
in
more than two transactions to more than four assignees per transaction. The
transferee shall sign an investment letter in form and substance reasonably
satisfactory to the Company.
2. Authorization
of Shares.
The
Company covenants that all Warrant Shares and all Additional Warrant Shares
which may be issued upon the exercise of the purchase rights represented by
this
Warrant will, upon exercise of the purchase rights represented by this Warrant
and in accordance with the terms hereof, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof imposed by the Company other than restrictions
on
transfer provided for in the Transaction Documents.
3. Exercise
of Warrant.
(a)
Except as provided in Section 4 herein, exercise of the purchase rights
represented by this Warrant may be made at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by the surrender
of
this Warrant and the Notice of Exercise Form annexed hereto duly executed,
at
the office of the Company (or such other office or agency of the Company as
it
may designate by notice in writing to the registered Holder at the address
of
such Holder appearing on the books of the Company) and upon payment of the
applicable Exercise Price of the shares thereby purchased by wire transfer
or
cashier’s check drawn on a United States bank or by means of a cashless exercise
pursuant to Section 3(d), the Holder shall be entitled to receive a certificate
for the number of Warrant Shares so purchased. Certificates for shares purchased
hereunder shall be delivered to the Holder within five (5) trading days after
the date on which this Warrant shall have been exercised as aforesaid. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the applicable Exercise Price and all
taxes required to be paid by the Holder, if any, pursuant to Section 5 prior
to
the issuance of such shares, have been paid. If the Company fails to deliver
to
the Holder a certificate or certificates representing the Warrant Shares
pursuant to this Section 3(a) by the fifth trading day after the date of
exercise, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company fails
to
deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to an exercise by the fifth trading day after the date of
exercise and the Holder has not rescinded such exercise pursuant to this Section
3(a), and if after
such
fifth trading day the Holder is required by its broker to purchase (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares
of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the
number of Warrant Shares and Additional Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue
times
(B) the price at which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares and Additional Warrant
Shares for which such exercise was not honored or deliver to the Holder the
number of shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations hereunder. For
example, if the Holder purchases Common Stock having a total purchase price
of
$11,000 to cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such purchase
obligation of $10,000, under clause (1) of the immediately preceding sentence
the Company shall be required to pay the Holder $1,000. The Holder shall provide
the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations and other evidence
reasonably requested by the Company. Nothing herein shall limit a Holder's
right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock upon exercise of this Warrant
as required pursuant to the terms hereof.
(b) If
this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares and
Additional Warrant Shares, deliver to Holder a new Warrant evidencing the rights
of Holder to purchase the unpurchased Warrant Shares and Additional Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
(c) The
Company shall not effect any exercise of this Warrant, and the Holder shall
not
have the right to exercise any portion of this Warrant, pursuant to Section
3(a)
or otherwise, to the extent that after giving effect to such issuance after
exercise, the Holder (together with the Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 9.99%
of
the number of shares of the Common Stock outstanding immediately after giving
effect to such issuance. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its affiliates and
(B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other
Warrants) subject to a limitation on
conversion
or exercise analogous to the limitation contained herein beneficially owned
by
the Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 3(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the 1934 Act. To the extent
that
the limitation contained in this Section 3(c) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned
by
the Holder) and of which a portion of this Warrant is exercisable shall be
in
the sole discretion of such ▇▇▇▇▇▇, and the submission of a Notice of Exercise
shall be deemed to be such Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. For purposes of this Section 3(c),
in determining the number of outstanding shares of Common Stock, the Holder
may
rely on the number of outstanding shares of Common Stock as reflected in (x)
the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company’s Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the Holder, the
Company shall within two trading days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was reported. The
provisions of this Section 3(c) may be waived by the Holder upon, at the
election of the Holder (other than SDS Capital Partners SPC, LTD. or its
affiliates), not less than 61 days’ prior notice to the Company, and the
provisions of this Section 3(c) shall continue to apply until such
61st
day (or
such later date, as determined by the Holder, as may be specified in such notice
of waiver).
(d) This
Warrant may also be exercised at any time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number
of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
| (A)= |
the
daily volume weighted average price of the Common Stock on the trading
day
immediately preceding the date of such
election;
|
| (B)= |
the
Warrant Share Exercise Price of this Warrant, as adjusted; and
|
| (X)= |
the
number of Warrant Shares issuable upon exercise of this Warrant in
accordance with the terms of this Warrant by means of a cash exercise
rather than a cashless exercise.
|
4. No
Fractional Shares or Scrip.
No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay
a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Warrant Share Exercise Price.
5. Charges,
Taxes and Expenses.
Issuance of certificates for Warrant Shares and Additional Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall
be
issued in the name of the Holder or in such name or names as may be directed
by
the Holder; provided,
however,
that in
the event certificates for Warrant Shares are to be issued in a name other
than
the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.
6. Closing
of Books.
The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.
7. Transfer,
Division and Combination.
(a) Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 1 and 7(e) hereof and to the provisions of Section 3(a) of the
Purchase Agreement, this Warrant and all rights hereunder are transferable,
in
whole or in part, upon surrender of this Warrant at the principal office of
the
Company, together with a written assignment of this Warrant substantially in
the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. A Warrant, if properly assigned, may be exercised by a new holder
for
the purchase of Warrant Shares without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants
in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
(e) If,
at
the time of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant
to
an
effective
registration statement under the 1933 Act and under applicable state securities
or blue sky laws, the Company may require, unless waived in its reasonable
discretion, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect
that
such transfer may be made without registration under the 1933 Act and under
applicable state securities or blue sky laws, (ii) that the holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the 1933 Act or a qualified institutional buyer as defined
in
Rule 144A(a) under the 1933 Act.
8. No
Rights as Shareholder until Exercise.
This
Warrant does not entitle the Holder to any voting rights or other rights as
a
shareholder of the Company prior to the exercise hereof. Upon the surrender
of
this Warrant and the payment of the aggregate Exercise Price (or by means of
a
cashless exercise pursuant to Section 3(d) hereof), the Warrant Shares and
Additional Warrant Shares so purchased shall be and be deemed to be issued
to
such Holder as the record owner of such shares as of the close of business
on
the later of the date of such surrender or payment.
9. Loss,
Theft, Destruction or Mutilation of Warrant.
The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares or Additional Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and deliver
a
new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
10. Saturdays,
Sundays, Holidays, etc.
If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.
11. Adjustments
of Exercise Price and Number of Warrant Shares.
(a) Dilutive
Issuances.
If the
Company shall issue or sell, or is, in accordance with subsections (b)(i)
through (viii) below, deemed to have issued or sold (each, a “Dilutive
Issuance”),
any
additional shares of Common Stock, other than Excluded Stock (the “New
Issuance Shares”),
without consideration or for a consideration per share less than the Exercise
Price in effect immediately prior to the time of such issue or sale (the lowest
price at which such shares of Common Stock are issued or deemed to be issued
hereunder is hereinafter referred to as the “New
Issuance Price”),
then
and in each such case (a “Trigger
Issuance”)
the
then-existing Warrant Share Exercise Price, shall be reduced, as of the close
of
business on the effective date of the Trigger Issuance, to a price determined
in
accordance with the immediately succeeding paragraphs.
Prior
to
stockholder approval of the Stockholder Proposals, the Warrant Share Exercise
Price shall be reduced to the higher of (i) the New Issuance Price or (ii)
$0.61
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after
the
date hereof) (the “Full-Ratchet
Floor Price”).
From
and after the date of stockholder approval of the Stockholder Proposals, if
any,
the Warrant Share Exercise Price shall be reduced to the New Issuance Price.
In
the event that in the time period prior to such stockholder approval a Dilutive
Issuance is made and the Warrant Share Exercise Price is adjusted to the
Full-Ratchet Floor Price instead of the New Issuance Price, then immediately
following such stockholder approval, the Warrant Share Exercise Price shall
be
adjusted to such New Issuance Price if such New Issuance Price is lower than
the
then current Warrant Share Exercise Price.
For
purposes of this subsection (a), “Excluded
Stock”
means
(1) shares of Common Stock issued pursuant to the terms thereof upon the
exercise or conversion of the Company’s options, warrants or convertible
securities outstanding as of the Closing Date in accordance with the terms
of
such options, warrants or other securities as in effect on the Closing Date
and
provided that such securities have not been amended since the Closing Date
to
increase the number of shares of Common Stock issuable thereunder or to lower
the exercise or conversion price thereof; (2) stock, stock options or other
stock rights issued pursuant to any stock or option plan duly adopted by a
majority of the non-employee members of the Board of Directors of the Company
or
a majority of the members of a committee of non-employee directors established
for such purpose; (3) securities issued pursuant to a bona fide underwritten
public offering with gross proceeds of at least $25,000,000; (4) the Notes,
the
Warrants and the shares of Common Stock issuable pursuant to the terms thereof;
(5) securities issued in a bona fide business acquisition the primary purpose
of
which, as determined in good faith by a majority of the members of the Board
of
Directors of the Company, is not raising capital; (6) capital stock or
convertible securities issued in a joint venture, strategic partnership or
licensing arrangement, the primary purpose of which, as determined in good
faith
by a majority of the members of the Board of Directors of the Company, is not
raising capital; and (7) shares of common stock issued or issuable by reason
of
a dividend, stock split or other distribution on shares of common stock (but
only to the extent that such a dividend, split or distribution results in an
adjustment in the Exercise Price pursuant to the other provisions herein).
Additionally,
for purposes of this subsection (a), the following subsections (b)(i) to (viii)
shall also be applicable:
(b)
(i)
Issuance
of Rights or Options.
In case
at any time the Company shall in any manner grant (directly and not by
assumption in a merger or otherwise) any warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock (such
warrants, rights or options being called “Options” and such convertible or
exchangeable stock or securities being called “Convertible Securities”) whether
or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon the conversion
or
exchange of such Convertible Securities (determined by dividing (i) the sum
(which sum shall constitute
the
applicable consideration) of (x) the total amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus (y) the aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus (z), in the case of such Options
which relate to Convertible Securities, the aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Warrant
Share
Exercise Price in effect immediately prior to the time of the granting of such
Options, then the total number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total amount
of
such Convertible Securities issuable upon the exercise of such Options shall
be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Warrant Share
Exercise Price. Except as otherwise provided in subsection (b)(iii) of this
Section 11, no adjustment of the Warrant Share Exercise Price shall be made
upon
the actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.
(ii)
Issuance
of Convertible Securities.
In case
the Company shall in any manner issue (directly and not by assumption in a
merger or otherwise) or sell any Convertible Securities, whether or not the
rights to exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the sum (which sum
shall
constitute the applicable consideration) of (x) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus (y) the aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than
the Warrant Share Exercise Price in effect immediately prior to the time of
such
issue or sale, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of all such Convertible Securities shall be deemed
to have been issued for such price per share as of the date of the issue or
sale
of such Convertible Securities and thereafter shall be deemed to be outstanding
for purposes of adjusting the Warrant Share Exercise Price, provided that (a)
except as otherwise provided in subsection (b)(iii) of this Section 11, no
adjustment of the Warrant Share Exercise Price shall be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities and (b) no further adjustment of the Warrant Share Exercise Price
shall be made by reason of the issue or sale of Convertible Securities upon
exercise of any Options to purchase any such Convertible Securities for which
adjustments of the Warrant Share Exercise Price have been made pursuant to
the
other provisions of Section 11.
(iii)
Change
in Option Price or Conversion Rate.
Upon
the happening of any of the following events, namely, if the purchase price
provided for in any Option
referred
to in subsection (b)(i) hereof, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities referred to in
subsections (b)(i) or (b)(ii), or the rate at which Convertible Securities
referred to in subsections (b)(i) or (b)(ii) are convertible into or
exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against
dilution), the Warrant Share Exercise Price in effect at the time of such event
shall forthwith be readjusted to the Warrant Share Exercise Price which would
have been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the termination of any Option for which any
adjustment was made pursuant to subsections (a) and (b) hereof or any right
to
convert or exchange Convertible Securities for which any adjustment was made
pursuant to this subsection (b) (including without limitation upon the
redemption or purchase for consideration of such Convertible Securities by
the
Company), the Warrant Share Exercise Price then in effect hereunder shall
forthwith be changed to the Warrant Share Exercise Price which would have been
in effect at the time of such termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such termination,
never been issued.
(iv)
Stock
Dividends.
In case
the Company shall declare a dividend or make any other distribution upon any
stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration.
(v)
Consideration
for Stock.
In case
any shares of Common Stock, Options or Convertible Securities shall be issued
or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash received by
the
Company shall be deemed to be the fair value of such consideration as determined
in good faith by the Board of Directors of the Company using standard commercial
valuation methods appropriate for valuing such assets; provided, however, that
if the Required Holders (as defined in the Securities Purchase Agreement) do
not
agree to such fair value calculation within three business days after receipt
thereof from the Company, then such fair value shall be determined in good
faith
by an investment banker or other appropriate expert of national reputation
selected by the Company and reasonably acceptable to the Required Holders,
with
the costs of such appraisal to be borne 50% equally by the Company and 50%
by
the Holders (ratably on the basis of the respective number of Warrant Shares
outstanding). In case any Options shall be issued in connection with the issue
and sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options
by
the parties thereto, such Options shall be deemed to have been issued for
nominal consideration. If Common Stock, Options or Convertible Securities shall
be issued or sold by the Company and, in connection therewith, other Options
or
Convertible
Securities (the “Additional Rights”) are issued without any specific
consideration allocated to such Additional Rights, then the consideration
received or deemed to be received by the Company for such Additional Rights
shall be deemed to be nominal.
(vi)
Record
Date.
In case
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or Convertible Securities or (ii) to subscribe
for or purchase Common Stock, Options or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale of the shares
of
Common Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the granting
of
such right of subscription or purchase, as the case may be.
(vii)
Treasury
Shares.
The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company or any of its
wholly-owned subsidiaries, and the disposition of any such shares (other than
the cancellation or retirement thereof) shall be considered an issue or sale
of
Common Stock for the purpose of this Section 11.
(c) Stock
Splits and Dividends.
If the
Company shall, at any time or from time to time while Warrants are outstanding,
pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, subdivide its outstanding shares of Common Stock into a greater number
of
shares or combine its outstanding shares of Common Stock into a smaller number
of shares or issue by reclassification of its outstanding shares of Common
Stock
any shares of its capital stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), then the Warrant Share Exercise Price and the number of Warrant
Shares in effect immediately prior to the date upon which such change shall
become effective shall be adjusted by the Company so that the Holder shall
be
entitled to receive the number of shares of Common Stock or other capital stock
which such Holder would have received immediately following such event had
this
Warrant been exercised immediately prior to such event. Such adjustments shall
be made successively whenever any event listed above shall occur.
(d) Reorganization
or Reclassification.
If any
capital reorganization or reclassification of the capital stock of the Company
shall be effected in such a way (including, without limitation, by way of
consolidation or merger) that holders of Common Stock but not holders of Company
Warrants shall be entitled to receive stock, securities or assets with respect
to or in exchange for Common Stock then, as a condition of such reorganization
or reclassification, lawful and adequate provision shall be made whereby the
Holder shall thereafter have the right to receive, upon the basis and upon
the
terms and conditions specified herein and in lieu of the shares of Common Stock
of the Company immediately theretofore receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares of Common
Stock equal to the number of
shares
of
such stock immediately theretofore so receivable had such reorganization or
reclassification not taken place and in any such case appropriate provision
shall be made with respect to the rights and interests of such Holder to the
end
that the provisions hereof (including without limitation provisions for
adjustments of the Warrant Share Exercise Price) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such rights (including an immediate
adjustment, by reason of such reorganization or reclassification, of the
Exercise Price to the value for the Common Stock reflected by the terms of
such
reorganization or reclassification if the value so reflected is less than the
Warrant Share Exercise Price in effect immediately prior to such reorganization
or reclassification). In the event of a merger or consolidation of the Company
as a result of which a greater or lesser number of shares of common stock of
the
surviving corporation are issuable to holders of the Common Stock of the Company
outstanding immediately prior to such merger or consolidation, the Warrant
Share
Exercise Price in effect immediately prior to such merger or consolidation
shall
be adjusted in the same manner as though there were a subdivision or combination
of the outstanding shares of Common Stock of the Company.
(e) Distributions.
In case
the Company shall fix a payment date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection
with
a consolidation or merger in which the Company is the continuing corporation)
of
evidences of indebtedness or assets (other than cash dividends or cash
distributions payable out of consolidated earnings or earned surplus or
dividends or distributions referred to in subsection (c) of this Section 11),
or
subscription rights or warrants, the Warrant Share Exercise Price to be in
effect after such payment date shall be determined by multiplying the Warrant
Share Exercise Price in effect immediately prior to such payment date by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding multiplied by the Market Price (as defined below) per share
of
Common Stock immediately prior to such payment date, less the fair market value
(as determined by the Company’s Board of Directors in good faith) of said assets
or evidences of indebtedness so distributed, or of such subscription rights
or
warrants, and the denominator of which shall be the total number of shares
of
Common Stock outstanding multiplied by such Market Price per share of Common
Stock immediately prior to such payment date. “Market
Price”
means,
for any security as of any date, the last sales price of such security on the
principal trading market where such security is listed or traded as reported
by
Bloomberg Financial Markets (or a comparable reporting service of national
reputation selected by the Company and reasonably acceptable to the holder
hereof if Bloomberg Financial Markets is not then reporting closing sales prices
of such security) (in any case, “Bloomberg”),
or if
the foregoing does not apply, the last reported sales price of such security
on
a national exchange or in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no such price is
reported for such security by Bloomberg, the average of the bid prices of all
market makers for such security as reported in the “pink sheets” by Pink Sheets
LLC, in each case for such date or, if such date was not a trading day for
such
security, on the next preceding date which was a trading day. If the Market
Price cannot be calculated for such security as of such date on any of the
foregoing bases, the Market Price of such security on such date shall be the
fair market value as reasonably
determined
by an investment banking firm selected by the Company and reasonably acceptable
to the holder hereof, with the costs of such appraisal to be borne by the
Company. Such adjustment shall be made successively whenever such a payment
date
is fixed.
(f) Effective
Date of Adjustment.
An
adjustment to the Warrant Share Exercise Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires
an
adjustment.
(g) Subsequent
Adjustments.
In the
event that, as a result of an adjustment made pursuant to subsections (a)
through (e), the Holder shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, the number of such
other
shares so receivable upon the exercise of this Warrant shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained herein.
(h) Other
Action Affecting Exercise Price.
If, at
any time during the Exercise Period, the Company takes any action affecting
the
Common Stock that would be covered by Section 11, but for the manner in which
such action is taken or structured, which would in any way diminish the value
of
this Warrant, then the Warrant Share Exercise Price shall be adjusted in such
manner as the Board of Directors of the Company shall in good faith determine
to
be equitable under the circumstances.
(i) Additional
Warrant Shares.
If
after the Registration Statement registering the Warrant Shares required by
Section 2(a) of the Registration Rights Agreement has been declared effective
by
the Securities and Exchange Commission, (i)(A) sales of Warrant Shares can
no
longer be made pursuant to such Registration Statement, (B) such Registration
Statement is no longer effective, or (C) the Common Stock is not listed or
included for quotation on the Nasdaq Capital Market, the Nasdaq National Market,
the New York Stock Exchange or the American Stock Exchange and (ii) the Holder
no longer holds any portion of the Notes (or Conversion Shares into which they
have been converted) (each of such events, a “Default
Event”)
and
such Default Event exists without interruption for more than five (5) business
days, then this Warrant will become exercisable for an additional number of
shares of Common Stock (the “Additional
Warrant Shares”)
equal
to (s) the number of Warrant Shares then issuable upon exercise of the Warrant
assuming a cashless exercise pursuant to Section 3(d) of this Warrant,
multiplied by (t) ten hundredths (.10). If the Default Event continues without
interruption for more than sixty (60) days, then this Warrant will become
exercisable for a further amount of Additional Warrant Shares equal to (u)
the
number of Warrant Shares then issuable upon exercise of the Warrant assuming
a
cashless exercise pursuant to Section 3(d) of this Warrant, multiplied by (v)
five hundredths (.05). If the Default Event continues without interruption
for
more than one hundred twenty (120) days, then this Warrant will become
exercisable (in part or in whole) for a further amount of Additional Warrant
Shares equal to (w) the number of Warrant Shares then issuable upon exercise
of
the Warrant assuming a cashless exercise pursuant to Section 3(d) of this
Warrant,
multiplied
by (x) five hundredths (.05). Thereafter, for each additional sixty (60) day
period after the one hundred and twentieth (120th)
day
following the commencement of a Default Event during which such Default Event
continues without interruption, but limited to a period of three hundred sixty
(360) days of existence of a continuous Default Event, this Warrant will become
exercisable for a further amount of Additional Warrant Shares equal to (y)
the
number of Warrant Shares then issuable upon exercise of the Warrant assuming
a
cashless exercise pursuant to Section 3(d) of this Warrant, multiplied by (z)
five hundredths (.05). After the three hundred and sixtieth (360th)
day of
existence of a continuous Default Event, the Holder will accrue no further
rights to Additional Warrant Shares. The exercise price for such Additional
Warrant Shares (the “Additional
Share Exercise Price”)
shall
be $.01 per share.
12. Voluntary
Adjustment by the Company.
The
Company may at any time during the term of this Warrant reduce the then current
Warrant Share Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company provided that such
reduction shall apply on a pro
rata
basis to
all of the Warrants.
13. Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Warrant Share
Exercise Price is adjusted, as herein provided, the Company shall give notice
thereof to the Holder, which notice shall state the number of Warrant Shares
(and other securities or property) purchasable upon the exercise of this Warrant
and the Warrant Share Exercise Price for such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
14. Call
Provision.
Unless
and to the extent Holder is prohibited from exercising under Section 3(c),
notwithstanding any other provision contained herein to the contrary, in the
event that the closing bid price of a share of Common Stock as traded on the
American Stock Exchange, Inc. (or such other exchange or stock market on which
the Common Stock may then be listed or quoted) equals or exceeds $2.60
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after
the
date hereof) for twenty (20) consecutive trading days commencing after the
Registration Statement (as defined in the Registration Rights Agreement) has
been declared effective, the Company, upon thirty (30) days prior written notice
(the “Notice
Period”)
given
to the Holder within one business day immediately following the end of such
twenty (20) trading day period, may call this Warrant, in whole or in part,
at a
redemption price equal to $0.65 per
share
of Common Stock then purchasable pursuant to this Warrant; provided that (i)
all
of Warrant Shares issuable upon the exercise of this Warrant either (A) are
registered pursuant to an effective Registration Statement (as defined in the
Registration Rights Agreement) which has not been suspended and for which no
stop order is in effect, and pursuant to which the Holder is able to sell such
shares of Common Stock at all times during the Notice Period or (B) no longer
constitute Registrable Securities (as defined in the Registration Rights
Agreement): (ii) the number of shares of Common Stock issuable upon the exercise
of Warrants included in such notice of redemption does not exceed the cumulative
trading volume of the Common Stock on any stock exchange or market on which
the
Common Stock may then be traded for the thirty (30) consecutive trading days
prior to the first day of the Notice Period; (iii) the Company has not
issued
a
warrant redemption notice on any other series of warrants within 60 days of
the
first day of the Notice Period; and (iv) the first day of such Notice Period
is
not within 365 days of the Closing Date or within 90 days of the Termination
Date. In the event that less than all of the Company Warrants (as defined below)
are called pursuant to this Section 14, any call of less than all the Company
Warrants shall be on a pro rata basis for each holder of Company Warrants.
Notwithstanding any such notice by the Company, the Holder shall have the right
to exercise this Warrant prior to the end of the Notice Period. The term
“Company
Warrants”
means
a
series of Warrants of like tenor issued by the Company pursuant to the Purchase
Agreement.
15. Notice
of
Corporate Action. If at any time:
(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right
to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock
of any class or any other securities or property, or to receive any other right,
or
(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all
or
substantially all the property, assets or business of the Company to, another
corporation or,
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company;
then,
in
any one or more of such cases, the Company shall give to Holder (i) at least
10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote
in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case
of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10
days’
prior written notice of the date when the same shall take place. Such notice
in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof,
and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of ▇▇▇▇▇▇ appearing on the books
of
the Company and delivered in accordance with Section 17(d).
16. Authorized
Shares.
The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise
of
any purchase rights under this Warrant. The Company further covenants that
its
issuance of
this
Warrant shall constitute full authority to its officers who are charged with
the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may
be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements
of
the Trading Market upon which the Common Stock may be listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall
not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of
this
Warrant, but will at all times in good faith assist in the carrying out of
all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares or Additional Warrant
Shares above the amount payable therefor upon such exercise immediately prior
to
such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable Warrant Shares or Additional Warrant Shares upon the exercise
of this Warrant, and (c) use commercially reasonable efforts to obtain all
such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
17. Miscellaneous.
(a) Jurisdiction.
This
Warrant shall constitute a contract under the laws of Delaware, without regard
to its conflict of law, principles or rules.
(b) Restrictions.
The
Holder acknowledges that the Warrant Shares and Additional Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities
laws.
(c) Nonwaiver
and Expenses.
No
course of dealing or any delay or failure to exercise any right hereunder on
the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly fails
to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as shall
be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
(d) Notices.
Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.
(e) Limitation
of Liability.
No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares or Additional Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to
any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or
by creditors of the Company.
(f) Remedies.
Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(g) Successors
and Assigns.
Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such Holder
or
holder of Warrant Shares or Additional Warrant Shares.
(h) Amendment.
This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(i) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(j) Headings.
The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
********************
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated:
January 13, 2006
|
MATRITECH,
INC.
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Chief Executive Officer
|
||
NOTICE
OF EXERCISE
To: Matritech,
Inc.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of Matritech,
Inc.
pursuant to the terms of the attached Warrant (only if exercised in full),
and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
o
in lawful money of the
United States; or
o
the cancellation of such number of
Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 3(d), to exercise this Warrant with respect to the maximum number
of
Warrant Shares purchasable pursuant to the cashless exercise provision set
forth
in subsection 3(d).
(3) Please
issue a certificate or certificates representing said Warrant Shares in the
name
of the undersigned or in such other name as is specified below:
_______________________________
The
Warrant Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
(4)
Accredited
Investor/Qualified Institutional Buyer.
The
undersigned is either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act of 1933,
as
amended (the “Securities Act”) or (ii) a qualified institutional buyer as
defined in Rule 144(A)(a) under the Securities Act.
[PURCHASER]
By:
______________________________
Name:
Title:
Dated:
________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form
and supply required information.
Do
not
use this form to exercise the warrant.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:
______________, _______
Holder's
Signature: ____________________________
Holder's
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.