Exhibit 10.3

 

[FORM OF SERIES D WARRANT]

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF
REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO
BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS SERIES D
WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO
SECTION 1(a) OF THIS SERIES D WARRANT.

 

TROVAGENE, INC.

 

SERIES D WARRANT TO PURCHASE COMMON STOCK

 

Series D Warrant No.:                

 

Date of Issuance: [           ], 2019 (“Issuance Date”)

 

Initial Exercise Date: [         ], 2019 (“Initial Exercise Date”)

 

Trovagene, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lincoln Park Capital Fund, LLC, the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon exercise of this Series D Warrant to
Purchase Common Stock (including any Series D Warrants to Purchase Common Stock
issued in exchange, transfer or replacement hereof, the “Series D Warrant”), at
any time or times on or after the Initial Exercise Date, but not after 11:59
p.m., New York time, on the Expiration Date (as defined below), [426,743](1) 
(subject to adjustment as provided herein) fully paid and non-assessable shares
of Common Stock (as defined below) (the “Series D Warrant Shares”).  Except as
otherwise defined herein, capitalized terms in this Series D Warrant shall have
the meanings set forth in Section 17.  This Series D Warrant is the Series D
Warrant issued pursuant to (i) Section 1 of that certain Securities Purchase
Agreement, dated as of [        ], 2019 (the “Subscription Date”), by and
between the Company and Lincoln Park Capital Fund, LLC, as amended from time to
time (the “Securities Purchase Agreement”).

 

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(1) May be adjusted.

 

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1.                                      EXERCISE OF SERIES D WARRANT.

 

(a)                                 Mechanics of Exercise.  Subject to the terms
and conditions hereof (including, without limitation, the limitations set forth
in Section 1(f)), this Series D Warrant may be exercised by the Holder on any
day on or after the Initial Exercise Date, in whole or in part, by delivery
(whether via facsimile or otherwise) of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to
exercise this Series D Warrant.  Within one (1) Trading Day following an
exercise of this Series D Warrant as aforesaid, the Holder shall deliver payment
to the Company of an amount equal to the Exercise Price in effect on the date of
such exercise multiplied by the number of Series D Warrant Shares as to which
this Series D Warrant was so exercised (the “Aggregate Exercise Price”) in cash
or via wire transfer of immediately available funds if the Holder did not notify
the Company in such Exercise Notice that such exercise was made pursuant to a
Cashless Exercise (as defined in Section 1(d)).  The Holder shall not be
required to deliver the original of this Series D Warrant in order to effect an
exercise hereunder.  Execution and delivery of an Exercise Notice with respect
to less than all of the Series D Warrant Shares shall have the same effect as
cancellation of the original of this Series D Warrant and issuance of a new
Series D Warrant evidencing the right to purchase the remaining number of
Series D Warrant Shares.  Execution and delivery of an Exercise Notice for all
of the then-remaining Series D Warrant Shares shall have the same effect as
cancellation of the original of this Series D Warrant after delivery of the
Series D Warrant Shares in accordance with the terms hereof.  On or before the
first (1st) Trading Day following the date on which the Company has received an
Exercise Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form
attached hereto as Exhibit B, to the Holder and the Company’s transfer agent
(the “Transfer Agent”), which confirmation shall constitute an instruction to
the Transfer Agent to process such Exercise Notice in accordance with the terms
herein. On or before the second (2nd) Trading Day following the date on which
the Company has received such Exercise Notice (or such earlier date as required
pursuant to the 1934 Act or other applicable law, rule or regulation for the
settlement of a trade of such Series D Warrant Shares initiated on the
applicable Exercise Date), the Company shall (i) provided that the Transfer
Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit/Withdrawal at Custodian system, or (ii) if the Transfer
Agent is not participating in the DTC Fast Automated Securities Transfer
Program, upon the request of the Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Exercise Notice, a
certificate, registered in the name of the Holder or its designee, for the
number of shares of Common Stock to which the Holder shall be entitled pursuant
to such exercise.  Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the
Series D Warrant Shares with respect to which this Series D Warrant has been
exercised, irrespective of the date such Series D Warrant Shares are credited to
the Holder’s DTC account or the date of delivery of the certificates evidencing
such Series D Warrant Shares (as the case may be).  If this Series D Warrant is
submitted in connection with any exercise pursuant to this Section 1(a) and the
number of Series D Warrant Shares represented by this Series D Warrant submitted
for exercise is greater than the number of Series D Warrant Shares being
acquired upon an exercise and upon surrender of this Series D Warrant to the
Company by the Holder, then, at the request of the

 

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Holder, the Company shall as soon as practicable and in no event later than
three (3) Business Days after any exercise and at its own expense, issue and
deliver to the Holder (or its designee) a new Series D Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Series D
Warrant Shares purchasable immediately prior to such exercise under this
Series D Warrant, less the number of Series D Warrant Shares with respect to
which this Series D Warrant is exercised.  No fractional shares of Common Stock
are to be issued upon the exercise of this Series D Warrant, but rather the
number of shares of Common Stock to be issued shall be rounded up to the nearest
whole number.  The Company shall pay any and all transfer, stamp, issuance and
similar taxes, costs and expenses (including, without limitation, fees and
expenses of the Transfer Agent) that may be payable with respect to the issuance
and delivery of Series D Warrant Shares upon exercise of this Series D Warrant. 
Notwithstanding the foregoing, except in the case where an exercise of this
Series D Warrant is validly made pursuant to a Cashless Exercise, the Company’s
failure to deliver Series D Warrant Shares to the Holder on or prior to the
later of (A) two (2) Trading Days after receipt of the applicable Exercise
Notice (or such earlier date as required pursuant to the 1934 Act or other
applicable law, rule or regulation for the settlement of a trade of such
Series D Warrant Shares initiated on the applicable Exercise Date) and (B) one
(1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or
valid notice of a Cashless Exercise) (such later date, the “Share Delivery
Deadline”) shall not be deemed to be a breach of this Series D Warrant.  From
the Issuance Date through and including the Expiration Date, the Company shall
maintain a transfer agent that participates in the DTC’s Fast Automated
Securities Transfer Program.

 

(b)                                 Exercise Price.  For purposes of this
Series D Warrant, “Exercise Price” means $[3.39](2), subject to adjustment as
provided herein.

 

(c)                                  Company’s Failure to Timely Deliver
Securities.  If the Company shall fail, for any reason or for no reason, to
issue to the Holder within three (3) Trading Days after receipt of the
applicable Exercise Notice, a certificate for the number of shares of Common
Stock to which the Holder is entitled and register such shares of Common Stock
on the Company’s share register or to credit the Holder’s balance account with
DTC for such number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise of this Series D Warrant (as the case may be) (a
“Delivery Failure”), then, in addition to all other remedies available to the
Holder, (X) the Company shall pay in cash to the Holder on each day after the
Share Delivery Deadline and during such Delivery Failure an amount equal to 2%
of the product of (A) the sum of the number of shares of Common Stock not issued
to the Holder on or prior to the Share Delivery Deadline and to which the Holder
is entitled, multiplied by (B) any trading price of the Common Stock selected by
the Holder in writing as in effect at any time during the period beginning on
the applicable Exercise Date and ending on the applicable Share Delivery
Deadline, and (Y) the Holder, upon written notice to the Company, may void its
Exercise Notice with respect to, and retain or have returned, as the case may
be, any portion of this Series D Warrant that has not been exercised pursuant to
such Exercise Notice; provided that the voiding of an Exercise Notice shall not
affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice pursuant to this Section 1(c) or otherwise.  In
addition to the foregoing, if on or prior to the Share Delivery Deadline either
(I) the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, the Company shall fail to issue and deliver to

 

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(2)  May fluctuate.

 

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the Holder (or its designee) a certificate and register such shares of Common
Stock on the Company’s share register or, if the Transfer Agent is participating
in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall
fail to credit the balance account of the Holder or the Holder’s designee with
DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder or pursuant to the Company’s obligation
pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or
after such Share Delivery Deadline the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of all or any portion of the number of shares of Common Stock
issuable upon such exercise that the Holder is entitled to receive from the
Company (a “Buy-In”), then, in addition to all other remedies available to the
Holder, the Company shall, within three (3) Business Days after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an
amount equal to the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (including, without limitation, by any other Person in
respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the
Company’s obligation to so issue and deliver such certificate (and to issue such
shares of Common Stock) or credit the balance account of such Holder or such
Holder’s designee, as applicable, with DTC for the number of Series D Warrant
Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) (and to issue such Series D Warrant Shares) shall terminate, or
(ii) promptly honor its obligation to so issue and deliver to the Holder a
certificate or certificates representing such Series D Warrant Shares or credit
the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Series D Warrant Shares to which the Holder is
entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of Series D Warrant Shares multiplied by (B) the
lowest Closing Sale Price of the Common Stock on any Trading Day during the
period commencing on the date of the applicable Exercise Notice and ending on
the date of such issuance and payment under this clause (ii) (the “Buy-In
Payment Amount”).  Nothing shall limit the 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 (or to electronically deliver such shares of Common
Stock) upon the exercise of this Series D Warrant as required pursuant to the
terms hereof.

 

(d)                                 Cashless Exercise.  Notwithstanding anything
contained herein to the contrary (other than Section 1(f) below), if at the time
of exercise hereof a registration statement is not effective (or the prospectus
contained therein is not available for use) for the resale by the Holder of all
of the Series D Warrant Shares, then the Holder may, in its sole discretion,
exercise this Series D Warrant in whole or in part by means of a “cashless
exercise” (a “Cashless Exercise”) in which the Holder shall be entitled to
receive a number of Series D Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

 

A= as applicable: (i) the VWAP on the Trading Day immediately preceding the date
of the applicable Notice of Exercise if such Notice of Exercise is (1) both
executed and delivered pursuant to Section 1(a) hereof on a day that is not a
Trading Day or (2) both executed and delivered pursuant to Section 1(a) hereof
on a Trading Day prior to the opening of “regular trading hours” (as defined in
Rule

 

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600(b)(64) of Regulation NMS promulgated under the federal securities laws) on
such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the
Trading Day immediately preceding the date of the applicable Notice of Exercise
or (z) the Bid Price of the Common Stock on the principal Trading Market as
reported by Bloomberg L.P. as of the time of the Holder’s execution of the
applicable Notice of Exercise if such Notice of Exercise is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading
hours” on a Trading Day) pursuant to Section 1(a) hereof or (iii) the VWAP on
the date of the applicable Notice of Exercise if the date of such Notice of
Exercise is a Trading Day and such Notice of Exercise is both executed and
delivered pursuant to Section 1(a) hereof after the close of “regular trading
hours” on such Trading Day.

 

B = the Exercise Price then in effect for the applicable Series D Warrant Shares
at the time of such exercise.

 

C = the number of Series D Warrant Shares that would be issuable upon exercise
of this Series D Warrant in accordance with the terms of this Series D Warrant
if such exercise were by means of a cash exercise rather than a Cashless
Exercise.

 

If the Series D Warrant Shares are issued in a Cashless Exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act,
the Series D Warrant Shares take on the characteristics of the Series D Warrants
being exercised.  For purposes of Rule 144(d) promulgated under the 1933 Act, as
in effect on the Subscription Date, it is intended that the Series D Warrant
Shares issued in a Cashless Exercise shall be deemed to have been acquired by
the Holder, and the holding period for the Series D Warrant Shares shall be
deemed to have commenced, on the date this Series D Warrant was originally
issued pursuant to the Securities Purchase Agreement. The Company agrees not to
take any position contrary to this Section 1(d).

 

(e)                                  Disputes.  In the case of a dispute as to
the determination of the Exercise Price or the arithmetic calculation of the
number of Series D Warrant Shares to be issued pursuant to the terms hereof, the
Company shall promptly issue to the Holder the number of Series D Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 13.

 

(f)                                   Limitations on Exercises.  The Company
shall not effect the exercise of any portion of this Series D Warrant, and the
Holder shall not have the right to exercise any portion of this Series D
Warrant, pursuant to the terms and conditions of this Series D Warrant and any
such exercise shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the
“Maximum Percentage”) of the shares of Common Stock outstanding immediately
after giving effect to such exercise.  For purposes of the foregoing sentence,
the aggregate number of shares of Common Stock beneficially owned by the Holder
and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of
shares of Common Stock issuable upon exercise of this Series D Warrant with
respect to which the determination of such

 

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sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of this
Series D Warrant beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the unexercised or
unconverted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or Series D
Warrants) beneficially owned by the Holder or any other Attribution Party
subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 1(f).  For purposes of this Section 1(f), beneficial
ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. 
For purposes of determining the number of outstanding shares of Common Stock the
Holder may acquire upon the exercise of this Series D Warrant without exceeding
the Maximum Percentage, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (x) the Company’s most recent Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the SEC, as the case may be, (y) a more recent public
announcement by the Company or (z) any other written notice by the Company or
the Transfer Agent, if any, setting forth the number of shares of Common Stock
outstanding (the “Reported Outstanding Share Number”).  If the Company receives
an Exercise Notice from the Holder at a time when the actual number of
outstanding shares of Common Stock is less than the Reported Outstanding Share
Number, the Company shall (i) notify the Holder in writing of the number of
shares of Common Stock then outstanding and, to the extent that such Exercise
Notice would otherwise cause the Holder’s beneficial ownership, as determined
pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must
notify the Company of a reduced number of Series D Warrant Shares to be acquired
pursuant to such Exercise Notice (the number of shares by which such purchase is
reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the
Company shall return to the Holder any exercise price paid by the Holder for the
Reduction Shares.  For any reason at any time, upon the written or oral request
of the Holder, the Company shall within one (1) Business Day confirm orally and
in writing or by electronic mail 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 Series D Warrant, by the Holder and
any other Attribution Party since the date as of which the Reported Outstanding
Share Number was reported.  In the event that the issuance of shares of Common
Stock to the Holder upon exercise of this Series D Warrant results in the Holder
and the other Attribution Parties being deemed to beneficially own, in the
aggregate, more than the Maximum Percentage of the number of outstanding shares
of Common Stock (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which the Holder’s and the other Attribution Parties’
aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess
Shares”) shall be deemed null and void and shall be cancelled ab initio, and the
Holder shall not have the power to vote or to transfer the Excess Shares.  As
soon as reasonably practicable after the issuance of the Excess Shares has been
deemed null and void, the Company shall return to the Holder the exercise price
paid by the Holder for the Excess Shares.  Upon delivery of a written notice to
the Company, the Holder may from time to time increase (with such increase not
effective until the sixty-first (61st) day after delivery of such notice) or
decrease the Maximum Percentage to any other percentage not in excess of 9.99%
as specified in such notice; provided that (i) any such increase in the Maximum
Percentage will not be effective until the sixty-first (61st) day after such
notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder

 

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and the other Attribution Parties and not to any other holder of Series D
Warrants that is not an Attribution Party of the Holder.  For purposes of
clarity, the shares of Common Stock issuable pursuant to the terms of this
Series D Warrant in excess of the Maximum Percentage shall not be deemed to be
beneficially owned by the Holder for any purpose including for purposes of
Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act.  No prior inability to
exercise this Series D Warrant pursuant to this paragraph shall have any effect
on the applicability of the provisions of this paragraph with respect to any
subsequent determination of exercisability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 1(f) to the extent necessary to
correct this paragraph or any portion of this paragraph which may be defective
or inconsistent with the intended beneficial ownership limitation contained in
this Section 1(f) or to make changes or supplements necessary or desirable to
properly give effect to such limitation.  The limitation contained in this
paragraph may not be waived and shall apply to a successor holder of this
Series D Warrant.

 

(g)                                  Reservation of Shares.

 

(i)            Required Reserve Amount.  So long as this Series D Warrant
remains outstanding, the Company shall at all times keep reserved for issuance
under this Series D Warrant a number of shares of Common Stock at least equal to
100% of the maximum number of shares of Common Stock as shall be necessary to
satisfy the Company’s obligation to issue shares of Common Stock under the
Series D Warrants then outstanding (without regard to any limitations on
exercise) (the “Required Reserve Amount”); provided that at no time shall the
number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be
reduced other than proportionally in connection with any exercise or redemption
of Series D Warrants or such other event covered by Section 2(a) below.  The
Required Reserve Amount (including, without limitation, each increase in the
number of shares so reserved) shall be allocated pro rata among the holders of
the Series D Warrants based on number of shares of Common Stock issuable upon
exercise of Series D Warrants held by each holder on the Closing Date (without
regard to any limitations on exercise) or increase in the number of reserved
shares, as the case may be (the “Authorized Share Allocation”). In the event
that a holder shall sell or otherwise transfer any of such holder’s Series D
Warrants, each transferee shall be allocated a pro rata portion of such holder’s
Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Series D Warrants shall be allocated to
the remaining holders of Series D Warrants, pro rata based on the number of
shares of Common Stock issuable upon exercise of the Series D Warrants then held
by such holders (without regard to any limitations on exercise).

 

(ii)           Insufficient Authorized Shares.  If, notwithstanding
Section 1(g)(i) above, and not in limitation thereof, at any time while any of
the Series D Warrants remain outstanding, the Company does not have a sufficient
number of authorized and unreserved shares of Common Stock to satisfy its
obligation to reserve the Required Reserve Amount (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary to
increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for all the Series D
Warrants then outstanding.  Without limiting the generality of the

 

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foregoing sentence, as soon as practicable after the date of the occurrence of
an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a
meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock.  In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the
stockholders that they approve such proposal.  In the event that the Company is
prohibited from issuing shares of Common Stock upon an exercise of this Series D
Warrant due to the failure by the Company to have sufficient shares of Common
Stock available out of the authorized but unissued shares of Common Stock (such
unavailable number of shares of Common Stock, the “Authorization Failure
Shares”), in lieu of delivering such Authorization Failure Shares to the Holder,
the Company shall pay cash in exchange for the cancellation of such portion of
this Series D Warrant exercisable into such Authorization Failure Shares at a
price equal to the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on
any Trading Day during the period commencing on the date the Holder delivers the
applicable Exercise Notice with respect to such Authorization Failure Shares to
the Company and ending on the date of such issuance and payment under this
Section 1(f); and (ii) to the extent the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount,
brokerage commissions and other out-of-pocket expenses, if any, of the Holder
incurred in connection therewith.  Nothing contained in this
Section 1(g)(ii) shall limit any obligations of the Company under any provision
of the Securities Purchase Agreement.

 

2.                                      ADJUSTMENT OF EXERCISE PRICE AND NUMBER
OF SERIES D WARRANT SHARES.

 

The Exercise Price and number of Series D Warrant Shares issuable upon exercise
of this Series D Warrant are subject to adjustment from time to time as set
forth in this Section 2.

 

(a)                                 Stock Dividends and Splits.  Without
limiting any provision of Section 2(b), Section 3 or Section 4, if the Company,
at any time on or after the date of the Securities Purchase Agreement, (i) pays
a stock dividend on one or more classes of its then outstanding shares of Common
Stock or otherwise makes a distribution on any class of capital stock that is
payable in shares of Common Stock, (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then
outstanding shares of Common Stock into a larger number of shares or
(iii) combines (by combination, reverse stock split or otherwise) one or more
classes of its then outstanding shares of Common Stock into a smaller number of
shares, then in each such case (a) the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event
and (b) the number of Series D Warrant Shares that may be purchased upon
exercise of this Series D Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the adjusted number of Series D Warrant Shares shall be
the same as the aggregate Exercise Price in effect immediately prior to such
adjustment (without regard to any limitations

 

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on exercise contained herein).  Any adjustment made pursuant to clause (i) of
this paragraph shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.

 

(b)                                 Other Events.  In the event that the Company
(or any Subsidiary (as defined in the Securities Purchase Agreement)) shall take
any action to which the provisions hereof are not strictly applicable, or, if
applicable, would not operate to protect the Holder from dilution or if any
event occurs of the type contemplated by the provisions of this Section 2 but
not expressly provided for by such provisions (including, without limitation,
the granting of  stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s board of directors shall in good faith
determine and implement an appropriate adjustment in the Exercise Price and the
number of Series D Warrant Shares (if applicable) so as to protect the rights of
the Holder, provided that no such adjustment pursuant to this Section 2(b) will
increase the Exercise Price or decrease the number of Series D Warrant Shares as
otherwise determined pursuant to this Section 2, provided further that if the
Holder does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then the Company’s board of directors
and the Holder shall agree, in good faith, upon an independent investment bank
of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding absent manifest error and whose fees
and expenses shall be borne by the Company.

 

(c)                                  Calculations.  All calculations under this
Section 2 shall be made by rounding to the nearest cent or the nearest
1/100th of a share, as applicable.  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, and the disposition of any such shares shall be
considered an issuance or sale of Common Stock.

 

(d)                                 Intentionally omitted.

 

(e)                                  Par Value. Notwithstanding anything to the
contrary in this Series D Warrant, in no event shall the Exercise Price be
reduced below the par value of the Company’s Common Stock.

 

3.                                      RIGHTS UPON DISTRIBUTION OF ASSETS.  In
addition to any adjustments pursuant to Section 2 above, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to
acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash,
stock or other securities, property, options, evidence of indebtedness or any
other assets by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a
“Distribution”), at any time after the issuance of this Series D Warrant, then,
in each such case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have participated therein
if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Series D Warrant (without regard to

 

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any limitations or restrictions on exercise of this Series D Warrant, including
without limitation, the Maximum Percentage) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be
determined for the participation in such Distribution (provided, however, that
to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder and the other Attribution Parties exceeding the
Maximum Percentage, then the Holder shall not be entitled to participate in such
Distribution to the extent of the Maximum Percentage (and shall not be entitled
to beneficial ownership of such shares of Common Stock as a result of such
Distribution (and beneficial ownership) to the extent of any such excess) and
the portion of such Distribution shall be held in abeyance for the benefit of
the Holder until such time or times, if ever, as its right thereto would not
result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any
subsequent Distribution held similarly in abeyance) to the same extent as if
there had been no such limitation).

 

4.             PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)                                 Purchase Rights.  In addition to any
adjustments pursuant to Section 2 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock,
Series D Warrants, securities or other property pro rata to the record holders
of any class of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of
this Series D Warrant (without regard to any limitations or restrictions on
exercise of this Series D Warrant, including without limitation, the Maximum
Percentage) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be
determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such
Purchase Right would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to
participate in such Purchase Right to the extent of the Maximum Percentage (and
shall not be entitled to beneficial ownership of such shares of Common Stock as
a result of such Purchase Right (and beneficial ownership) to the extent of any
such excess) and such Purchase Right to such extent shall be held in abeyance
for the benefit of the Holder until such time or times, if ever, as its right
thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be
granted such right (and any Purchase Right granted, issued or sold on such
initial Purchase Right or on any subsequent Purchase Right held similarly in
abeyance) to the same extent as if there had been no such limitation).

 

(b)                                 Fundamental Transactions.  The Company shall
not enter into or be party to a Fundamental Transaction unless (i)  the
Successor Entity assumes in writing all of the obligations of the Company under
this Series D Warrant and the other Transaction Documents (as defined in the
Securities Purchase Agreement) in accordance with the provisions of this
Section 4(b) pursuant to written agreements in form and substance satisfactory
to the Holder and approved by the Holder prior to such Fundamental Transaction,
including agreements to deliver

 

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to the Holder in exchange for this Series D Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and
substance to this Series D Warrant, including, without limitation, which is
exercisable for a corresponding number of shares of capital stock equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this
Series D Warrant (without regard to any limitations on the exercise of this
Series D Warrant) prior to such Fundamental Transaction, and with an exercise
price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such adjustments to the number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this
Series D Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a
publicly traded corporation whose common stock is quoted on or listed for
trading on an Eligible Market.  Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of the applicable Fundamental Transaction, the
provisions of this Series D Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may
exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Series D Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the
Company herein.  Upon consummation of each Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Series D Warrant at any time after the consummation
of the applicable Fundamental Transaction, in lieu of the shares of Common Stock
(or other securities, cash, assets or other property (except such items still
issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Series D Warrant prior to the
applicable Fundamental Transaction, such shares of publicly traded common stock
(or its equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of the
applicable Fundamental Transaction had this Series D Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Series D Warrant), as adjusted in
accordance with the provisions of this Series D Warrant.  Notwithstanding the
foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at
its sole option, by delivery of written notice to the Company to waive this
Section 4(b) to permit the Fundamental Transaction without the assumption of
this Series D Warrant.  In addition to and not in substitution for any other
rights hereunder, prior to the consummation of each Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common
Stock (a “Corporate Event”), the Company shall make appropriate provision to
insure that the Holder will thereafter have the right to receive upon an
exercise of this Series D Warrant at any time after the consummation of the
applicable Fundamental Transaction but prior to the Expiration Date, in lieu of
the shares of the Common Stock (or other securities, cash, assets or other
property (except such items still issuable under Sections 3 and 4(a) above,
which shall continue to be receivable thereafter)) issuable upon the exercise of
the Series D Warrant prior to such Fundamental Transaction, such shares of
stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have
been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Series D Warrant been exercised immediately

 

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prior to the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Series D Warrant).  Provision made pursuant
to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Holder.

 

(c)                                  Application.  The provisions of this
Section 4 shall apply similarly and equally to successive Fundamental
Transactions and Corporate Events and shall be applied as if this Series D
Warrant (and any such subsequent warrants) were fully exercisable and without
regard to any limitations on the exercise of this Series D Warrant (provided
that the Holder shall continue to be entitled to the benefit of the Maximum
Percentage, applied however with respect to shares of capital stock registered
under the 1934 Act and thereafter receivable upon exercise of this Series D
Warrant (or any such other warrant)).

 

5.                                      NONCIRCUMVENTION. The Company hereby
covenants and agrees that the Company will not, by amendment of its Certificate
of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as
defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issuance 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 Series D
Warrant, and will at all times in good faith carry out all the provisions of
this Series D Warrant and take all action as may be required to protect the
rights of the Holder.  Without limiting the generality of the foregoing, the
Company (a) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Series D Warrant above the Exercise Price
then in effect, and (b) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of this Series D
Warrant.

 

6.                                      WARRANT HOLDER NOT DEEMED A STOCKHOLDER.
Except as otherwise specifically provided herein, the Holder, solely in its
capacity as a holder of this Series D Warrant, shall not be entitled to vote or
receive dividends or be deemed the holder of share capital of the Company for
any purpose, nor shall anything contained in this Series D Warrant be construed
to confer upon the Holder, solely in its capacity as the Holder of this Series D
Warrant, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Series D
Warrant Shares which it is then entitled to receive upon the due exercise of
this Series D Warrant.  In addition, nothing contained in this Series D Warrant
shall be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Series D Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.  Notwithstanding this Section 6, the Company
shall provide the Holder with copies of the same notices and other information
given to the stockholders of the Company generally, contemporaneously with the
giving thereof to the stockholders.

 

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7.                                      REISSUANCE OF WARRANTS.

 

(a)                                 Transfer of Warrant.  If this Series D
Warrant is to be transferred, the Holder shall surrender this Series D Warrant
to the Company, whereupon the Company will forthwith issue and deliver upon the
order of the Holder a new Series D Warrant (in accordance with Section 7(d)),
registered as the Holder may request, representing the right to purchase the
number of Series D Warrant Shares being transferred by the Holder and, if less
than the total number of Series D Warrant Shares then underlying this Series D
Warrant is being transferred, a new Series D Warrant (in accordance with
Section 7(d)) to the Holder representing the right to purchase the number of
Series D Warrant Shares not being transferred.

 

(b)                                 Lost, Stolen or Mutilated Warrant.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Series D Warrant (as to which a
written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Holder to the Company in customary and
reasonable form and, in the case of mutilation, upon surrender and cancellation
of this Series D Warrant, the Company shall execute and deliver to the Holder a
new Series D Warrant (in accordance with Section 7(d)) representing the right to
purchase the Series D Warrant Shares then underlying this Series D Warrant.

 

(c)                                  Exchangeable for Multiple Warrants.  This
Series D Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Series D Warrant or Series D Warrants
(in accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Series D Warrant Shares then underlying this Series D
Warrant, and each such new Series D Warrant will represent the right to purchase
such portion of such Series D Warrant Shares as is designated by the Holder at
the time of such surrender; provided, however, no warrants for fractional shares
of Common Stock shall be given.

 

(d)                                 Issuance of New Warrants.  Whenever the
Company is required to issue a new Series D Warrant pursuant to the terms of
this Series D Warrant, such new Series D Warrant (i) shall be of like tenor with
this Series D Warrant, (ii) shall represent, as indicated on the face of such
new Series D Warrant, the right to purchase the Series D Warrant Shares then
underlying this Series D Warrant (or in the case of a new Series D Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Series D Warrant Shares
designated by the Holder which, when added to the number of shares of Common
Stock underlying the other new Series D Warrants issued in connection with such
issuance, does not exceed the number of Series D Warrant Shares then underlying
this Series D Warrant), (iii) shall have an issuance date, as indicated on the
face of such new Series D Warrant which is the same as the Issuance Date, and
(iv) shall have the same rights and conditions as this Series D Warrant.

 

8.                                      NOTICES.  Whenever notice is required to
be given under this Series D Warrant, unless otherwise provided herein, such
notice shall be given in accordance with Section 9(f) of the Securities Purchase
Agreement.  The Company shall provide the Holder with prompt written notice of
all actions taken pursuant to this Series D Warrant (other than the issuance of
shares of Common Stock upon exercise in accordance with the terms hereof),
including in reasonable detail a

 

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description of such action and the reason therefor.  Without limiting the
generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon each adjustment of the Exercise Price and the number of
Series D Warrant Shares, setting forth in reasonable detail, and certifying, the
calculation of such adjustment(s), (ii) at least ten Trading Days prior to the
date on which the Company closes its books or takes a record (A) with respect to
any dividend or distribution upon the shares of Common Stock, (B) with respect
to any grants, issuances or sales of any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property to holders of
shares of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder, and (iii) at least ten
(10) Trading Days prior to the consummation of any Fundamental Transaction. To
the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any of its
Subsidiaries, the Company shall simultaneously file such notice with the SEC (as
defined in the Securities Purchase Agreement) pursuant to a Current Report on
Form 8-K.  If the Company or any of its Subsidiaries provides material
non-public information to the Holder that is not simultaneously filed in a
Current Report on Form 8-K and the Holder has not agreed to receive such
material non-public information, the Company hereby covenants and agrees that
the Holder shall not have any duty of confidentiality to the Company, any of its
Subsidiaries or any of their respective officers, directors, employees,
Affiliates or agents with respect to, or a duty to any of the foregoing not to
trade on the basis of, such material non-public information. It is expressly
understood and agreed that the time of execution specified by the Holder in each
Exercise Notice shall be definitive and may not be disputed or challenged by the
Company.

 

9.                                      AMENDMENT AND WAIVER.  Except as
otherwise provided herein, the provisions of this Series D Warrant (other than
Section 1(f)) may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Holder.  No waiver
shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.

 

10.                               SEVERABILITY.  If any provision of this
Series D Warrant is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, the provision that would
otherwise be prohibited, invalid or unenforceable shall be deemed amended to
apply to the broadest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Series D Warrant so long as this Series D
Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties.  The parties will endeavor in
good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).

 

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11.                               GOVERNING LAW.  This Series D Warrant shall be
governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Series D Warrant shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York.  The Company hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to the Company at the address set forth in
Section 9(f) of the Securities Purchase Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.  The
Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.  Nothing contained herein shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action against the
Company in any other jurisdiction to collect on the Company’s obligations to the
Holder, to realize on any collateral or any other security for such obligations,
or to enforce a judgment or other court ruling in favor of the Holder.  THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS SERIES D WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

12.                               CONSTRUCTION; HEADINGS.  This Series D Warrant
shall be deemed to be jointly drafted by the Company and the Holder and shall
not be construed against any Person as the drafter hereof.  The headings of this
Series D Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Series D Warrant.  Terms used in this
Series D Warrant but defined in the other Transaction Documents shall have the
meanings ascribed to such terms on the Closing Date (as defined in the
Securities Purchase Agreement) in such other Transaction Documents unless
otherwise consented to in writing by the Holder.

 

13.                               DISPUTE RESOLUTION.

 

(a)                                 Submission to Dispute Resolution.

 

(i)                                     In the case of a dispute relating to the
Exercise Price, the Closing Sale Price, or fair market value or the arithmetic
calculation of the number of Series D Warrant Shares (as the case may be)
(including, without limitation, a dispute relating to

 

15

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the determination of any of the foregoing), the Company or the Holder (as the
case may be) shall submit the dispute to the other party via facsimile (A) if by
the Company, within two (2) Business Days after the occurrence of the
circumstances giving rise to such dispute or (B) if by the Holder, at any time
after the Holder learned of the circumstances giving rise to such dispute.  If
the Holder and the Company are unable to promptly resolve such dispute relating
to such Exercise Price, such Closing Sale Price or such fair market value or
such arithmetic calculation of the number of Series D Warrant Shares (as the
case may be), at any time after the second (2nd) Business Day following such
initial notice by the Company or the Holder (as the case may be) of such dispute
to the Company or the Holder (as the case may be), then the Holder may, at its
sole option, select an independent, reputable investment bank  to resolve such
dispute.

 

(ii)                                  The Holder and the Company shall each
deliver to such investment bank (A) a copy of the initial dispute submission so
delivered in accordance with the first sentence of this Section 13 and
(B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th)
Business Day immediately following the date on which the Holder selected such
investment bank (the “Dispute Submission Deadline”) (the documents referred to
in the immediately preceding clauses (A) and (B) are collectively referred to
herein as the “Required Dispute Documentation”) (it being understood and agreed
that if either the Holder or the Company fails to so deliver all of the Required
Dispute Documentation by the Dispute Submission Deadline, then the party who
fails to so submit all of the Required Dispute Documentation shall no longer be
entitled to (and hereby waives its right to) deliver or submit any written
documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the
Required Dispute Documentation that was delivered to such investment bank prior
to the Dispute Submission Deadline). Unless otherwise agreed to in writing by
both the Company and the Holder or otherwise requested by such investment bank,
neither the Company nor the Holder shall be entitled to deliver or submit any
written documentation or other support to such investment bank in connection
with such dispute (other than the Required Dispute Documentation).

 

(iii)                               The Company and the Holder shall cause such
investment bank to determine the resolution of such dispute and notify the
Company and the Holder of such resolution no later than ten (10) Business Days
immediately following the Dispute Submission Deadline. The fees and expenses of
such investment bank shall be borne solely by the Company, and such investment
bank’s resolution of such dispute shall be final and binding upon all parties
absent manifest error.

 

(b)                                 Miscellaneous.  The Company expressly
acknowledges and agrees that (i) this Section 13 constitutes an agreement to
arbitrate between the Company and the Holder (and constitutes an arbitration
agreement) under the rules then in effect under § 7501, et seq. of the New York
Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply
for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel
compliance with this Section 13, (ii) a dispute relating to the Exercise Price
includes, without limitation, disputes as to (A) whether an issuance or sale or
deemed issuance or sale of Common Stock occurred under Section 2(b), (B) the
consideration per share at which an

 

16

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issuance or deemed issuance of Common Stock occurred, and (C) whether an
agreement, instrument, security or the like constitutes and Option or
Convertible Security, (iii) the terms of this Series D Warrant and each other
applicable Transaction Document shall serve as the basis for the selected
investment bank’s resolution of the applicable dispute, such investment bank
shall be entitled (and is hereby expressly authorized) to make all findings,
determinations and the like that such investment bank determines are required to
be made by such investment bank in connection with its resolution of such
dispute (including, without limitation, determining (A) whether an issuance or
sale or deemed issuance or sale of Common Stock occurred under Section 2(b),
(B) the consideration per share at which an issuance or deemed issuance of
Common Stock occurred, and (C) whether an agreement, instrument, security or the
like constitutes and Option or Convertible Security and in resolving such
dispute such investment bank shall apply such findings, determinations and the
like to the terms of this Series D Warrant and any other applicable Transaction
Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall
have the right to submit any dispute described in this Section 13 to any state
or federal court sitting in The City of New York, Borough of Manhattan in lieu
of utilizing the procedures set forth in this Section 13 and (v) nothing in this
Section 13 shall limit the Holder from obtaining any injunctive relief or other
equitable remedies (including, without limitation, with respect to any matters
described in this Section 13).

 

14.                               REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Series D Warrant
shall be cumulative and in addition to all other remedies available under this
Series D Warrant and the other Transaction Documents, at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the right of the Holder to pursue actual and
consequential damages for any failure by the Company to comply with the terms of
this Series D Warrant.  The Company covenants to the Holder that there shall be
no characterization concerning this instrument other than as expressly provided
herein.  Amounts set forth or provided for herein with respect to payments,
exercises and the like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). 
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder and that the remedy at law for any such
breach may be inadequate.  The Company therefore agrees that, in the event of
any such breach or threatened breach, the holder of this Series D Warrant shall
be entitled, in addition to all other available remedies, to specific
performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case
without the necessity of proving actual damages and without posting a bond or
other security.  The Company shall provide all information and documentation to
the Holder that is  requested by the Holder to enable the Holder to confirm the
Company’s compliance with the terms and conditions of this Series D Warrant
(including, without limitation, compliance with Section 2 hereof).  The issuance
of shares and certificates for shares as contemplated hereby upon the exercise
of this Series D Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the Holder or its agent on its behalf.

 

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15.                               PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER
COSTS.  If (a) this Series D Warrant is placed in the hands of an attorney for
collection or enforcement or is collected or enforced through any legal
proceeding or the holder otherwise takes action to collect amounts due under
this Series D Warrant or to enforce the provisions of this Series D Warrant or
(b) there occurs any bankruptcy, reorganization, receivership of the company or
other proceedings affecting company creditors’ rights and involving a claim
under this Series D Warrant, then the Company shall pay the costs incurred by
the Holder for such collection, enforcement or action or in connection with such
bankruptcy, reorganization, receivership or other proceeding, including, without
limitation, attorneys’ fees and disbursements.

 

16.                               TRANSFER.  Subject to applicable laws, this
Series D Warrant may be offered for sale, sold, transferred or assigned without
the consent of the Company.

 

17.                               CERTAIN DEFINITIONS.  For purposes of this
Series D Warrant, the following terms shall have the following meanings:

 

(a)                                 “1933 Act” means the Securities Act of 1933,
as amended, and the rules and regulations thereunder.

 

(b)                                 “1934 Act” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.

 

(c)                                  “Affiliate” means, with respect to any
Person, any other Person that directly or indirectly controls, is controlled by,
or is under common control with, such Person, it being understood for purposes
of this definition that “control” of a Person means the power directly or
indirectly either to vote 10% or more of the stock having ordinary voting power
for the election of directors of such Person or direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.

 

(d)                                 “Attribution Parties” means, collectively,
the following Persons and entities: (i) any investment vehicle, including, any
funds, feeder funds or managed accounts, currently, or from time to time after
the Issuance Date, directly or indirectly managed or advised by the Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or
indirect Affiliates of the Holder or any of the foregoing, (iii) any Person
acting or who could be deemed to be acting as a Group together with the Holder
or any of the foregoing and (iv) any other Persons whose beneficial ownership of
the Company’s Common Stock would or could be aggregated with the Holder’s and
the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. 
For clarity, the purpose of the foregoing is to subject collectively the Holder
and all other Attribution Parties to the Maximum Percentage.

 

(e)                                  “Bid Price” means, for any security as of
the particular time of determination, the bid price for such security on the
Principal Market as reported by Bloomberg as of such time of determination, or,
if the Principal Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal
securities exchange or trading market where such security is listed or traded as
reported by Bloomberg as of such time

 

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of determination, or if the foregoing does not apply, the bid price of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg as of such time of determination, or, if
no bid price is reported for such security by Bloomberg as of such time of
determination, the average of the bid prices of any market makers for such
security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly
Pink Sheets LLC) as of such time of determination.  If the Bid Price cannot be
calculated for a security as of the particular time of determination on any of
the foregoing bases, the Bid Price of such security as of such time of
determination shall be the fair market value as mutually determined by the
Company and the Holder.  If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 13.  All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.

 

(f)                                   “Bloomberg” means Bloomberg, L.P.

 

(g)                                  “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

 

(h)                                 “Closing Sale Price” means, for any security
as of any date, the last closing trade price for such security on the Principal
Market, as reported by Bloomberg, or, if the Principal Market begins to operate
on an extended hours basis and does not designate the closing trade price, then
the last trade price of such security prior to 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last trade price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing does
not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or,
if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the
“pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).  If the
Closing Sale Price cannot be calculated for a security on a particular date on
any of the foregoing bases, the Closing Sale Price of such security on such date
shall be the fair market value as mutually determined by the Company and the
Holder.  If the Company and the Holder are unable to agree upon the fair market
value of such security, then such dispute shall be resolved in accordance with
the procedures in Section 13.  All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during such period.

 

(i)                                     “Common Stock” means (i) the Company’s
shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital
resulting from a reclassification of such common stock.

 

(j)                                    “Convertible Securities” means any stock
or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

19

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(k)                                 “Eligible Market” means the New York Stock
Exchange, the NYSE American, The Nasdaq Global Select Market, The Nasdaq Global
Market or the Principal Market.

 

(l)                                     “Expiration Date” means the date that is
the fifth (5th) anniversary of the Initial Exercise Date or, if such date falls
on a day other than a Trading Day or on which trading does not take place on the
Principal Market (a “Holiday”), the next date that is not a Holiday.

 

(m)                              “Fundamental Transaction” means (A) that the
Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more
Subject Entities to make, or allow the Company to be subject to or have its
Common Stock be subject to or party to one or more Subject Entities making, a
purchase, tender or exchange offer that is accepted by the holders of at least
either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock
held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not
outstanding; or (z) such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity making or
party to, such purchase, tender or exchange offer, become collectively the
beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50%
of the outstanding shares of Common Stock, or (iv) consummate a stock or share
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more Subject Entities whereby all such Subject Entities, individually or in
the aggregate, acquire, either (x) at least 50% of the outstanding shares of
Common Stock, (y) at least 50% of the outstanding shares of Common Stock
calculated as if any shares of Common Stock held by all the Subject Entities
making or party to, or Affiliated with any Subject Entity making or party to,
such stock purchase agreement or other business combination were not
outstanding; or (z) such number of shares of Common Stock such that the Subject
Entities become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock,
or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the
Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the
“beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock,
merger, consolidation, business combination, reorganization, recapitalization,
spin-off, scheme of arrangement, reorganization, recapitalization or
reclassification or otherwise in any manner whatsoever, of either (x) at least
50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock, (y) at least 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock not held by all such Subject
Entities as of the date of this Series D Warrant calculated as if any shares of
Common Stock held by all such Subject Entities were not outstanding, or (z) a
percentage of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock or other equity securities of the Company
sufficient to allow such Subject Entities to effect a statutory short

 

20

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form merger or other transaction requiring other shareholders of the Company to
surrender their shares of Common Stock without approval of the shareholders of
the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or
the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this definition to the extent necessary to
correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.

 

(n)                                 “Group” means a “group” as that term is used
in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

(o)                                 “Options” means any rights, warrants or
options to subscribe for or purchase shares of Common Stock or Convertible
Securities.

 

(p)                                 “Parent Entity” of a Person means an entity
that, directly or indirectly, controls the applicable Person and whose common
stock or equivalent equity security is quoted or listed on an Eligible Market,
or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.

 

(q)                                 “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity or a government or any department
or agency thereof.

 

(r)                                    “Principal Market” means the The Nasdaq
Capital Market.

 

(s)                                    “SEC” means the United States Securities
and Exchange Commission or the successor thereto.

 

(t)                                    “Subject Entity” means any Person,
Persons or Group or any Affiliate or associate of any such Person, Persons or
Group.

 

(u)                                 “Successor Entity” means the Person (or, if
so elected by the Holder, the Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction or the Person (or, if so elected by the
Holder, the Parent Entity) with which such Fundamental Transaction shall have
been entered into.

 

(v)                                 “Trading Day” means, as applicable, (x) with
respect to all price or trading volume determinations relating to the Common
Stock, any day on which the Common Stock is traded on the Principal Market, or,
if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which
the Common Stock is then traded, provided that “Trading Day” shall not include
any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended
from trading during the final hour of trading on such exchange or market (or if
such exchange or market does not designate in advance the closing time of
trading on such exchange or market, then during the hour ending at 4:00:00 p.m.,

 

21

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New York time) unless such day is otherwise designated as a Trading Day in
writing by the Holder or (y) with respect to all determinations other than price
determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.

 

(w)                               “VWAP” means, for any security as of any date,
the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such
security, then on the principal securities exchange or securities market on
which such security is then traded) during the period beginning at 9:30:01 a.m.,
New York time, and ending at 4:00:00 p.m., New York time, as reported by
Bloomberg through its “HP” function (set to weighted average) or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York time, and
ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no
dollar volume-weighted average price is reported for such security by Bloomberg
for such hours, the average of the highest closing bid price and the lowest
closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).  If the
VWAP cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder.  If the Company and the
Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 13. 
All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction
during such period.

 

[signature page follows]

 

22

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IN WITNESS WHEREOF, the Company has caused this Series D Warrant to Purchase
Common Stock to be duly executed as of the Issuance Date set out above.

 

 

TROVAGENE, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
SERIES D WARRANT TO PURCHASE COMMON STOCK

 

TROVAGENE, INC.

 

The undersigned holder hereby elects to exercise the Series D Warrant to
Purchase Common Stock No.         (the “Series D Warrant”) of Trovagene, Inc., a
Delaware corporation (the “Company”) as specified below.  Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in
the Series D Warrant.

 

1.                                      Form of Exercise Price.  The Holder
intends that payment of the Aggregate Exercise Price shall be made as:

 

o                                    a “Cash Exercise” with respect to
                  Series D Warrant Shares; and/or

 

¨                                    a “Cashless Exercise” with respect to
                Series D Warrant Shares.

 

In the event that the Holder has elected a Cashless Exercise with respect to
some or all of the Series D Warrant Shares to be issued pursuant hereto, the
Holder hereby represents and warrants that this Exercise Notice was executed by
the Holder at            [a.m.][p.m.] on the date set forth below.

 

2.                                      Payment of Exercise Price.  In the event
that the Holder has elected a Cash Exercise with respect to some or all of the
Series D Warrant Shares to be issued pursuant hereto, the Holder shall pay the
Aggregate Exercise Price in the sum of $                    to the Company in
accordance with the terms of the Series D Warrant.

 

3.                                      Delivery of Series D Warrant Shares. 
The Company shall deliver to Holder, or its designee or agent as specified
below,            shares of Common Stock in accordance with the terms of the
Series D Warrant.  Delivery shall be made to Holder, or for its benefit, as
follows:

 

¨                                    Check here if requesting delivery as a
certificate to the following name and to the following address:

 

Issue to:

 

 

 

 

 

 

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¨                                    Check here if requesting delivery by
Deposit/Withdrawal at Custodian as follows:

 

DTC Participant:

 

 

 

DTC Number:

 

 

 

Account Number:

 

 

Date:                 ,

 

 

 

Name of Registered Holder

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Tax ID:

 

 

 

 

 

Facsimile:

 

 

 

 

 

E-mail Address:

 

 

 

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EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby acknowledges this Exercise Notice and hereby directs
               to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated          , 201 , from the
Company and acknowledged and agreed to by                .

 

 

TROVAGENE, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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