exv10w1



 





EXHIBIT 10.1





VOID AFTER 5:00 P.M., NEW YORK CITY

TIME, ON                     

(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)




THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.



Right to Purchase                      Shares of     

Common Stock, par value $0.01 per share   




Date:                     




SONTRA MEDICAL CORPORATION

STOCK PURCHASE WARRANT




     THIS CERTIFIES THAT, for value received, [___Holder___], or its registered assigns, is entitled
to purchase from Sontra Medical Corporation, a corporation organized under the laws of the State of
Minnesota (the “Company”), at any time or from time to time during the period specified in Section
2 hereof,                      fully paid and nonassessable shares (the “Warrant Shares”) of the Company’s
common stock, par value $0.01 per share (the “Common Stock”), at an exercise price per share (the
“Exercise Price”) equal to $                     per share. The number of Warrant Shares and the Exercise Price
are subject to adjustment as provided in Section 4 hereof. The term “Warrant” and all references
thereto, as used throughout this instrument, shall mean this instrument as originally executed, or
if later amended or supplemented, then as so amended or supplemented, including all Warrants issued
upon transfer or exchange of this Warrant as provided herein.



 









 





     This Warrant is subject to the following terms, provisions and conditions:


1. Exercise of Warrant.




     (a) Subject to the provisions hereof, including, without limitation, the limitations contained
in Section 9 hereof, this Warrant may be exercised by the holder hereof, in whole or in part, by
the surrender of this Warrant, together with a completed exercise agreement in the form attached
hereto (the “Exercise Agreement”), to the Company during normal business hours on any business day
at the Company’s principal executive offices (or such other office or agency of the Company as it
may designate by written notice to the holder hereof), and upon (i) payment to the Company in cash,
by certified or official bank check or by wire transfer for the account of the Company, of the
Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the holder is
effectuating a Cashless Exercise (as defined in Section 8 hereof) pursuant to Section 8 hereof,
delivery to the Company of a written notice of an election to effect a Cashless Exercise for the
Warrant Shares specified in the Exercise Agreement.



     (b) The Warrant Shares purchased upon exercise of this Warrant in accordance with this Section
1 shall be deemed to be issued to the holder hereof or the holder’s designee, as the record owner
of such shares, as of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and payment shall have
been made for such shares as set forth above or, if such date is not a business day, on the next
succeeding business day. The Warrant Shares so purchased, representing the aggregate number of
shares specified in the Exercise Agreement, shall be delivered to the holder hereof or the holder’s
designee within a reasonable time, not exceeding three business days, after this Warrant shall have
been so exercised (the “Delivery Period”). If the Company’s transfer agent is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, and so long as the
certificates therefor do not bear a legend and the holder is not obligated to return such
certificate for the placement of a legend thereon, the Company may cause its transfer agent to
electronically transmit the Warrant Shares so purchased to the holder or the holder’s designee by
crediting the account of the holder or the holder’s designee or its respective nominee with DTC
through its Deposit Withdrawal Agent Commission system (“DTC Transfer”). If the aforementioned
conditions to a DTC Transfer are not satisfied, the Company shall deliver to the holder or the
holder’s designee physical certificates representing the Warrant Shares so purchased.
Notwithstanding the foregoing, the holder or the holder’s designee may instruct the Company to
deliver to the holder or such designee physical certificates representing the Warrant Shares so
purchased in lieu of delivering such shares by way of DTC Transfer. Any certificates so delivered
shall be in such denominations as may be reasonably requested by the holder hereof or the holder’s
designee, shall be registered in the name of the holder or such other name as shall be designated
by the holder and, if the Warrant Shares have been registered under the Securities Act to or
otherwise may be sold by the holder pursuant to Rule 144 promulgated under the Securities Act (or a
successor rule), shall not bear any restrictive legend. If this Warrant shall have been exercised
only in part, then the Company shall, at its expense, at the time of delivery of such certificates,
deliver to the holder a new Warrant representing the number of shares with respect to which this
Warrant shall not then have been exercised.



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     (c) In addition to any other rights available to the holder hereof, if the Company fails to
cause its transfer agent to transmit to the holder a certificate or certificates representing the
Warrant Shares pursuant to an exercise before the end of the Delivery Period, and if after such
date 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 shares of 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 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.


2. Period of Exercise. This Warrant shall be exercisable at any time or from time to time
during the period (the “Exercise Period”) commencing on the date of initial issuance of this
Warrant (the “Issue Date”) and ending at 5:00 p.m., New York City time, on the fifth anniversary of
the Issue Date.



3. Certain Agreements of the Company. The Company hereby covenants and agrees as follows:




     (a) Shares to be Fully Paid. All Warrant Shares shall, upon issuance in accordance
with the terms of this Warrant, be validly issued, fully paid and non-assessable and free from all
taxes, liens, claims and encumbrances.



     (b) Reservation of Shares. During the Exercise Period, the Company shall at all times
have authorized, and reserved for the purpose of issuance upon exercise of this Warrant, a
sufficient number of shares of Common Stock to provide for the exercise in full of this Warrant
(without giving effect to the limitations on exercise set forth in Section 9 hereof).



     (c) Listing. The Company shall secure the listing or quotation of the shares of
Common Stock issuable upon exercise of this Warrant upon each national securities exchange or
automated or electronic quotation system, if any, upon which shares of Common Stock are then



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listed or quoted or become listed or quoted (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of Common Stock shall be
so listed or quoted, such listing or quotation of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so list or apply for quotation on
each national securities exchange or automated or electronic quotation system, as the case may be,
and shall maintain such listing or quotation of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the same class shall be
listed or quoted on such national securities exchange or automated or electronic quotation system.



     (d) Successors and Assigns. This Warrant shall be binding upon any entity succeeding
to the Company by merger, consolidation, or acquisition of all or substantially all of the
Company’s assets or similar transaction.



     (e) Blue Sky Laws. The Company shall, on or before the date of issuance of any
Warrant Shares, use its reasonable efforts to qualify the Warrant Shares for, or obtain exemption
for the Warrant Shares for, sale to the holder of this Warrant upon the exercise hereof under
applicable securities or “blue sky” laws of the states of the United States; provided, however,
that the Company shall not be required in connection therewith or as a condition thereto to (i)
qualify to do business in any jurisdiction where it would not otherwise be required to qualify but
for this Section 3(e), (ii) subject itself to general taxation in any such jurisdiction or (iii)
file a general consent to service of process in any such jurisdiction.



     (f) Additional Covenants. The Company shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the Company, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other 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 the
holder hereof against dilution (to the extent specifically provided herein) or impairment. Without
limiting the generality of the foregoing, the Company will (i) not permit the par value, if any, of
its Common Stock to exceed the then effective Exercise Price, (ii) not amend or modify any
provision of the Certificate of Incorporation or by-laws of the Company in any manner that would
adversely affect the rights of the holder hereof, (iii) take all such action as may be reasonably
necessary in order that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other
than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body having jurisdiction
thereof as may be reasonably necessary to enable the Company to perform its obligations under this
Warrant.


4. Antidilution Provisions. During the Exercise Period, the Exercise Price and the number
of Warrant Shares issuable hereunder shall be subject to adjustment from time to time as provided
in this Section 4.




     (a) Stock Splits, Stock Dividends, Etc. If, at any time during the Exercise Period,
the number of outstanding shares of Common Stock is increased by a stock split, stock dividend,



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combination, reclassification or other similar event, the Exercise Price in effect immediately
prior to such increase shall be proportionately reduced, or if the number of outstanding shares of
Common Stock is decreased by a reverse stock split, combination, reclassification or other similar
event, the Exercise Price in effect immediately prior to such decrease shall be proportionately
increased.



     (b) Merger, Consolidation, Etc. If, at any time during the Exercise Period, there
shall be (i) any reclassification or change of the outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation or merger of the Company with any
other entity (other than a merger in which the Company is the surviving or continuing entity and
its capital stock is unchanged), (iii) any sale or transfer of all or substantially all of the
assets of the Company or (iv) any share exchange or other transaction pursuant to which all of the
outstanding shares of Common Stock are converted into other securities or property (each of (i) -
(iv) above being a “Corporate Change”), then the holder hereof shall thereafter have the right to
receive upon exercise of this Warrant, in lieu of the Warrant Shares otherwise issuable, such
shares of stock, securities and/or other property as would have been issued or payable in such
Corporate Change with respect to or in exchange for the number of Warrant Shares which would have
been issuable upon exercise had such Corporate Change not taken place (without giving effect to the
limitations contained in Section 9), and in any such case, appropriate provisions (in form and
substance reasonably satisfactory to the holder hereof) shall be made with respect to the rights
and interests of the holder to the end that the economic value of this Warrant is in no way
diminished by such Corporate Change and that the provisions hereof (including, without limitation,
in the case of any such consolidation, merger or sale in which the successor entity or purchasing
entity is not the Company, an immediate adjustment of the Exercise Price and Warrant Shares so that
the Exercise Price and Warrant Shares immediately after the Corporate Change reflects the same
relative value as compared to the value of the surviving entity’s common stock that existed between
the Exercise Price and the Warrant Shares and the value of the Company’s Common Stock immediately
prior to such Corporate Change) shall thereafter be applicable, as nearly as may be practicable in
relation to any shares of stock or securities thereafter deliverable upon the exercise thereof (but
not before the public announcement of the transaction that may result in a Corporate Change). The
above provisions shall apply regardless of whether or not there would have been a sufficient number
of shares of Common Stock authorized and available for issuance upon exercise hereof as of the date
of such transaction, and shall similarly apply to successive reclassifications, consolidations,
mergers, sales, transfers or share exchanges.



     (c) Distributions. If, at any time during the Exercise Period, the Company shall
declare or make any distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a partial liquidating dividend, by way of return of capital or otherwise (including
any dividend or distribution to the Company’s shareholders in cash or shares (or rights to acquire
shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the holder
hereof shall be entitled, upon any exercise of this Warrant after the date of record for
determining shareholders entitled to such Distribution (or if no such record is taken, the date on
which such Distribution is declared or made), to receive the amount of such assets which would have
been payable to the holder with respect to the Warrant Shares issuable upon such exercise (without
giving effect to the limitations contained in Section 9) had the holder hereof been the



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holder of such Warrant Shares on the record date for the determination of shareholders
entitled to such Distribution (or if no such record is taken, the date on which such Distribution
is declared or made).



     (d) Convertible Securities and Purchase Rights. If, at any time during the Exercise
Period, the Company issues any securities or other instruments which are convertible into or
exercisable or exchangeable for Common Stock (“Convertible Securities”) or options, warrants or
other rights to purchase or subscribe for Common Stock or Convertible Securities (“Purchase Rights”
and together with the Convertible Securities, “Common Stock Equivalents”) pro rata to the record
holders of any class of Common Stock, whether or not such Common Stock Equivalents are immediately
convertible, exercisable or exchangeable, then the holder hereof shall be entitled, upon any
exercise of this Warrant after the date of record for determining shareholders entitled to receive
such Common Stock Equivalents (or if no such record is taken, the date on which such Common Stock
Equivalents are issued), to receive the aggregate number of Common Stock Equivalents which the
holder would have received with respect to the Warrant Shares issuable upon such exercise (without
giving effect to the limitations contained in Section 9) had the holder hereof been the holder of
such Warrant Shares on the record date for the determination of shareholders entitled to receive
such Common Stock Equivalents (or if no such record is taken, the date on which such Convertible
Securities or Common Stock Equivalents were issued).



     (e) Dilutive Issuances.



          (i) Adjustment Upon Dilutive Issuance. If, at any time during the Exercise Period,
the Company issues or sells, or in accordance with subparagraph (ii) of this Section 4(e) is deemed
to have issued or sold, any shares of Common Stock for no consideration or for a consideration per
share less than the Exercise Price in effect on the date of issuance or sale (or deemed issuance or
sale) (a “Dilutive Issuance”), then effective immediately upon the Dilutive Issuance, the Exercise
Price shall be adjusted to equal the Exercise Price then in effect multiplied by a fraction (A) the
numerator of which shall be the sum of (x) the number of shares of outstanding Common Stock
immediately prior to the Dilutive Issuance plus (y) the number of shares of Common Stock that would
have been issued in a Dilutive Issuance at a price per share equal to the Exercise Price then in
effect and (B) the denominator of which shall be equal to the number of shares of outstanding
Common Stock immediately after the Dilutive Issuance.




          (ii) For purposes of determining the adjusted Exercise Price under clause (i) of this Section
4(e), the following will be applicable:




               (1) Issuance of Common Stock Equivalents. In the event the Company shall at any time
following the Issue Date take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether directly or by
assumption in a merger in which the Company is the surviving corporation) issue or sell, any Common
Stock Equivalents, whether or not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Exercise Price in effect immediately prior to the time of such
issue or sale, or if, after any such issuance of Common Stock Equivalents, the price per share for
which additional shares of Common Stock may be issuable thereafter is amended or



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adjusted, and such price as so amended shall be less than the Exercise Price in effect at the
time of such amendment or adjustment, then the Exercise Price then in effect shall be adjusted as
provided in Section 4(e)(i). No further adjustments of the number of shares of Common Stock for
which this Warrant is exercisable and the Exercise Price then in effect shall be made upon the
actual issue of such Common Stock upon conversion or exchange of such Common Stock Equivalents.



               (2) Computation of Consideration. To the extent that any additional shares of Common
Stock or any Common Stock Equivalents (or any warrants or other rights therefor) shall be issued
for cash consideration, the consideration received by the Company therefor shall be the amount of
the cash received by the Company therefor, or, if such additional shares of Common Stock or Common
Stock Equivalents are offered by the Company for subscription, the subscription price, or, if such
additional shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers
for public offering without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued dividends and
without taking into account any compensation, discounts or expenses paid or incurred by the Company
for and in the underwriting of, or otherwise in connection with, the issuance thereof). In
connection with any merger or consolidation in which the Company is the surviving corporation
(other than any consolidation or merger in which the previously outstanding shares of Common Stock
of the Company shall be changed to or exchanged for the stock or other securities of another
corporation), the amount of consideration therefore shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board, of such portion of the assets and business of
the nonsurviving corporation as the Board may determine to be attributable to such shares of Common
Stock or Common Stock Equivalents, as the case may be. The consideration for any additional shares
of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the
same shall be the consideration received by the Company for issuing such warrants or other rights
plus the additional consideration payable to the Company upon exercise of such warrants or other
rights. The consideration for any additional shares of Common Stock issuable pursuant to the terms
of any Common Stock Equivalents shall be the consideration received by the Company for issuing
warrants or other rights to subscribe for or purchase such Common Stock Equivalents, plus the
consideration paid or payable to the Company in respect of the subscription for or purchase of such
Common Stock Equivalents, plus the additional consideration, if any, payable to the Company upon
the exercise of the right of conversion or exchange in such Common Stock Equivalents. In the event
of any consolidation or merger of the Company in which the Company is not the surviving corporation
or in which the previously outstanding shares of Common Stock of the Company shall be changed into
or exchanged for the stock or other securities of another corporation, or in the event of any sale
of all or substantially all of the assets of the Company for stock or other securities of any
corporation, the Company shall be deemed to have issued a number of shares of its Common Stock for
stock or securities or other property of the other corporation computed on the basis of the actual
exchange ratio on which the transaction was predicated, and for a consideration equal to the fair
market value on the date of such transaction of all such stock or securities or other property of
the other corporation. In the event any consideration received by the Company for any securities
consists of property other than cash, the fair market value thereof at the time of issuance or as
otherwise applicable shall be as determined in good faith by the Board. In the event Common Stock
is issued with other shares or securities or other assets of the Company for consideration which



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covers both, the consideration computed as provided in this paragraph shall be allocated among
such securities and assets as determined in good faith by the Board.



               (3) When Adjustments to Be Made. The adjustments required by this Section 4 shall be
made whenever and as often as any specified event requiring an adjustment shall occur, except that
any adjustment of the number of shares of Common Stock for which this Warrant is exercisable that
would otherwise be required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in Section 4(e)(ii)(2)) up to, but not beyond the date
of exercise if such adjustment either by itself or with other adjustments not previously made adds
or subtracts less than one percent (1%) of the shares of Common Stock for which this Warrant is
exercisable immediately prior to the making of such adjustment. Any adjustment representing a
change of less than such minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other adjustments required by this
Section 4 and not previously made, would result in a minimum adjustment or on the date of exercise.
For the purpose of any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.



               (4) Fractional Interests. In computing adjustments under this Section 4, fractional
interests in Common Stock shall be taken into account to the nearest one one-hundredth
(1/100th) of a share.



               (5) Exceptions to Adjustment of Exercise Price. Notwithstanding the foregoing, no
adjustment to the Exercise Price shall be made upon (A) the issuance of Common Stock upon the
exercise or conversion of any Common Stock Equivalent outstanding on the Issue Date in accordance
with the terms of such Common Stock Equivalents as of such date; (B) the grant of options to
purchase Common Stock, with exercise prices not less than the Market Price of the Common Stock on
the date of grant, which are issued to employees, officers, directors or consultants of the Company
for the primary purpose of soliciting or retaining their employment or service, and the issuance of
shares of Common Stock upon the exercise thereof; (C) exercise of this Warrant, (D) the issuance of
securities in connection with strategic business partnerships or joint ventures, the primary
purpose of which, in the reasonable judgment of the Board of Directors, is not to raise additional
capital or (E) the issuance of securities pursuant to any equipment financing from a bank or
similar financial or lending institution approved by the Board of Directors. In addition, if the
Company shall take a record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or Purchase Rights and shall, thereafter and
before the distribution to shareholders thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or Purchase Rights, no adjustments to the Exercise Price shall
be made.



     (f) Notice of Adjustment. Upon the occurrence of any event which requires any
adjustment or readjustment of the Exercise Price or change in number or type of stock, securities
and/or other property issuable upon exercise of this Warrant, then, and in each such case, the
Company shall give notice thereof to the holder hereof, which notice shall state the Exercise Price
resulting from such adjustment or readjustment and any change in the number of type of stock,
securities and/or other property issuable upon exercise of this Warrant, setting forth in



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reasonable detail the method of calculation and the facts upon which such calculation is
based. Such calculation shall be certified by the chief financial officer of the Company.



     (g) No Fractional Shares. No fractional shares of Common Stock may be issued in
connection with the exercise of this warrant, but in lieu of such fractional shares, the Company
shall round the number of shares to be issued upon exercise up to the nearest whole number of
shares.



     (h) Other Notices. In case at any time:



          (i) the Company shall declare any dividend upon the Common Stock payable in shares of stock of
any class or make any other distribution (other than dividends or distributions payable in cash out
of retained earnings consistent with the Company’s past practices with respect to declaring
dividends and making distributions) to the holders of the Common Stock;




          (ii) the Company shall offer for subscription pro rata to the holders of the Common Stock any
additional shares of stock of any class or other rights;




          (iii) there shall be any capital reorganization of the Company, or reclassification of the
Common Stock, or consolidation or merger of the Company with or into, or sale of all or
substantially all of its assets to, another corporation or entity; or




          (iv) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the
Company;



then, in each such case, the Company shall give to the holder of this Warrant (A) notice of the
date or estimated date on which the books of the Company shall close or a record shall be taken for
determining the holders of Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to vote in respect of
any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (B) in the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding-up, as the case may be. Such notice shall be
given at least ten (10) days prior to the record date or the date on which the Company’s books are
closed in respect thereto. Failure to give any such notice or any defect therein shall not affect
the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, the Company shall publicly disclose the substance of any notice
delivered hereunder prior to delivery of such notice to the holder hereof.



5. No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Company. No provision of this
Warrant, in the absence of affirmative action by the holder hereof to purchase Warrant Shares,


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and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to
any liability of such holder for the Exercise Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.



6. Transfer, Exchange, Redemption and Replacement of Warrant.




     (a) Restriction on Transfer. This Warrant and the rights granted to the holder hereof
are transferable, in whole or in part, upon surrender of this Warrant, together with a properly
executed assignment in the form attached hereto, at the office or agency of the Company referred to
in Section 6(e) below, provided, however, that any transfer or assignment shall be
subject to the conditions set forth in Sections 7(b) and 9 hereof. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the registered holder
hereof as the owner and holder hereof for all purposes, and the Company shall not be affected by
any notice to the contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Section 7 hereof are assignable only in accordance with the
provisions thereof.



     (b) Warrant Exchangeable for Different Denominations. This Warrant is exchangeable,
upon the surrender hereof by the holder hereof at the office or agency of the Company referred to
in Section 6(e) below, for new Warrants of like tenor of different denominations representing in
the aggregate the right to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such number of shares (at
the Exercise Price therefor) as shall be designated by the holder hereof at the time of such
surrender.



     (c) Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such
loss, theft, or destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, will execute and deliver, in lieu thereof, a new Warrant
of like tenor.



     (d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
connection with any transfer, exchange, or replacement as provided in this Section 6, this Warrant
shall be promptly canceled by the Company.



     (e) Warrant Register. The Company shall maintain, at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to the holder hereof),
a register for this Warrant, in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.



     (f) Transfer or Exchange Without Registration. If, at the time of the surrender of
this Warrant in connection with any transfer or exchange of this Warrant, this Warrant (or, in the
case of any exercise, the Warrant Shares issuable hereunder) shall not be registered under the
Securities Act and under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such transfer or exchange, (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



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shall be in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer or exchange may be made without registration under
the Securities 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)
promulgated under the Securities Act; provided, however, that no such opinion, letter, or status as
an “accredited investor” shall be required in connection with a transfer pursuant to Rule 144 under
the Securities Act.


7. Piggy-Back Registration Rights.




     (a) If the Company enters into a Qualified Financing (as defined below) and grants
registration rights with respect to the securities or instruments issued to investors or other
participants in the Qualified Financing, the Company shall provide registration rights to the
holder(s) of this Warrant with respect to the Warrant Shares upon the same terms and conditions as
those provided to the investors or other participants in the Qualified Financing. For purposes of
this Section 7, “Qualified Financing” means any equity financing providing
for the sale and issuance of any shares of Common Stock or Common Stock Equivalents, except for (i)
the issuance of Common Stock upon the exercise or conversion of any Common Stock Equivalent
outstanding on the Issue Date in accordance with the terms of such Common Stock Equivalents as of
such date; (ii) the grant of options to purchase Common Stock, with exercise prices not less than
the Market Price of the Common Stock on the date of grant, which are issued to employees, officers,
directors or consultants of the Company for the primary purpose of soliciting or retaining their
employment or service, and the issuance of shares of Common Stock upon the exercise thereof; (iii)
exercise of this Warrant, (iv) the issuance of securities in connection with strategic business
partnerships or joint ventures, the primary purpose of which, in the reasonable judgment of the
Board of Directors, is not to raise additional capital or (v) the issuance of securities pursuant
to any equipment financing from a bank or similar financial or lending institution approved by the
Board of Directors.



     (b) Termination of Piggy-back Registration Rights. The registration rights described
in this Section 7 shall terminate on the date on which all of the Warrant Shares may be immediately
sold to the public without registration or restriction pursuant to Rule 144(k) under the Securities
Act or any successor provision.


8. Cashless Exercise. This Warrant may be exercised at any time during the Exercise Period
by presentation and surrender of this Warrant to the Company at its principal executive offices
with a written notice of the holder’s intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a “Cashless Exercise”). In the event of a Cashless Exercise, in lieu of
paying the Exercise Price in cash, the holder shall surrender this Warrant for that number of
shares of Common Stock determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the difference between the
then current Market Price of a share of the Common Stock on the date of exercise and the Exercise
Price, and the denominator of which shall be the then current Market Price per share of Common
Stock.




11









 







9. Additional Restrictions on Exercise and Transfer.




          (a) Notwithstanding anything to the contrary set forth in this Warrant, at no time may a
holder of this Warrant exercise this Warrant if the number of shares of Common Stock to be issued
pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned
by such holder at such time, the number of shares of Common Stock which would result in such holder
beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the
rules thereunder) in excess of 4.9% of the then issued and outstanding shares of Common Stock;
provided, however, that upon a holder of this Warrant providing the Company with
sixty-one (61) days notice (pursuant to Section 12 hereof) (the “Waiver Notice”) that such holder
would like to waive this Section 9(a) with regard to any or all shares of Common Stock issuable
upon exercise of this Warrant, this Section 9(a) will be of no force or effect with regard to all
or a portion of the Warrant referenced in the Waiver Notice; provided, further,
that this provision shall be of no further force or effect during the sixty-one (61) days
immediately preceding the expiration of the term of this Warrant.




          (b) The holder may not exercise the Warrant hereunder to the extent such exercise would result
in the holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange
Act and the rules thereunder) in excess of 9.9% of the then issued and outstanding shares of Common
Stock, including shares issuable upon exercise of the Warrant held by the holder after application
of this Section; provided, however, that upon a holder of this Warrant providing
the Company with a Waiver Notice that such holder would like to waive this Section 9(b) with regard
to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 9(b)
shall be of no force or effect with regard to those shares of Warrant Shares referenced in the
Waiver Notice; provided, further, that this provision shall be of no further force
or effect during the sixty-one (61) days immediately preceding the expiration of the term of this
Warrant.



10. Certain Definitions. For purposes of this Warrant, the following capitalized terms
shall have the respective meanings assigned to them:




     (a) “business day” means any day, other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law, regulation or executive
order to close.



     (b) “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 the National
Quotation Bureau, Inc., 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



12









 







calculated for such security as of either of such dates 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.



     (c) “trading day” means any day on which principal United States securities exchange or
trading market where the Common Stock is then listed or traded, is open for trading.


11. Miscellaneous.




     (a) Governing Law; Jurisdiction. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made and to be performed
in the State of New York.



     (b) Construction. Whenever the context requires, the gender of any word used in this
Warrant includes the masculine, feminine or neuter, and the number of any word includes the
singular or plural. Unless the context otherwise requires, all references to articles and sections
refer to articles and sections of this Warrant, and all references to schedules are to schedules
attached hereto, each of which is made a part hereof for all purposes. The descriptive headings of
the several articles and sections of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.



     (c) Severability. If any provision of this Warrant shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Warrant or the validity or enforceability of this Warrant
in any other jurisdiction.



     (d) Entire Agreement; Amendments. This Warrant contains the entire understanding of
the Company and the holder hereof with respect to the matters covered herein. Subject to any
additional express provisions of this Warrant, no provision of this Warrant may be waived other
than by an instrument in writing signed by the party to be charged with enforcement, and no
provision of this Warrant may be amended other than by an instrument in writing signed by the
Company and the holder.



     (e) Notices. Any notices required or permitted to be given under the terms of this
Warrant shall be sent by certified or registered mail (return receipt requested) or delivered
personally, by nationally recognized overnight carrier or by confirmed facsimile transmission, and
shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal
of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed
facsimile transmission, in each case addressed to a party. The initial addresses for such
communications shall be as follows, and each party shall provide notice to the other parties of any
change in such party’s address:



          (i) If to the Company:



Sontra
Medical Corporation

10 Forge Parkway

Franklin, MA 02038





13









 







Telephone: (508) 530-0311

Facsimile: (508) 553-8760

Attention: Chief Financial Officer





with a copy simultaneously transmitted by like means (which transmittal
shall not constitute notice hereunder) to:


Drinker Biddle & Reath LLP

One Logan Square

18th and Cherry Streets

Philadelphia, PA 19103-6996

Telephone: 215-988-2700

Facsimile: 215-988-2757

Attention: Stephen T. Burdumy




          (ii) If to the holder, at such address as shall be set forth in the
Warrant Register from time to time.




     (f) Successors and Assigns. This Warrant shall be binding upon and inure to the
benefit of the parties and their successors and assigns. Except as provided herein, the Company
shall not assign this Warrant or its obligations hereunder. The holder hereof may assign or
transfer this Warrant and such holders rights hereunder in accordance with Section 6 hereof.



     (g) Remedies. The Company stipulates that the remedies at law of the holder of this
Warrant in the event of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction against a violation of
any of the terms hereof or otherwise.



[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]





14









 








     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized
officer.



	 	 	 	 	 	 	 
	 	 	SONTRA MEDICAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 	 	Name: Harry G. Mitchell	 	 
	 	 	Title: Interim Chief Executive Officer	 	 
	 

	 	 	 	  and Chief Financial Officer	 	 



















 





FORM OF EXERCISE AGREEMENT




(To be Executed by the Holder in order to Exercise the Warrant)




	 	 	 
	To:
	 	Sontra Medical Corporation

10 Forge Parkway

Franklin, MA 02038

Facsimile:          508-553-8760

Attention:          Chief Financial Officer







     The undersigned hereby irrevocably exercises the right to purchase                     shares of the
Common Stock of Sontra Medical Corporation, a corporation organized under the laws of the State of
Minnesota (the “Company”), evidenced by the attached Warrant, and herewith [makes payment of the
Exercise Price with respect to such shares in full][elects to effect a Cashless Exercise (as
defined in Section 8 of such Warrant)], all in accordance with the conditions and provisions of
said Warrant.



     The undersigned agrees not to offer, sell, transfer or otherwise dispose of any Common Stock
obtained on exercise of the Warrant, except under circumstances that will not result in a violation
of the Securities Act of 1933, as amended, or any state securities laws.




o The undersigned requests that the Company cause its transfer
agent to electronically transmit the Common Stock issuable pursuant
to this Exercise Agreement to the account of the undersigned or its
nominee (which is                     ) with DTC through its Deposit
Withdrawal Agent Commission System (“DTC Transfer”), provided that
such transfer agent participates in the DTC Fast Automated
Securities Transfer program.




o In lieu of receiving the shares of Common Stock issuable
pursuant to this Exercise Agreement by way of DTC Transfer, the
undersigned hereby requests that the Company cause its transfer
agent to issue and deliver to the undersigned physical certificates
representing such shares of Common Stock.


The undersigned requests that a Warrant representing any unexercised portion hereof be issued,
pursuant to the Warrant, in the name of the Holder and delivered to the undersigned at the address
set forth below:




Dated:                    




	 	 	 
	 

	 	 
	 

	 	Signature of Holder
	 
	 	 
	 
	 

	 	 
	 

	 	Name of Holder (Print)
	 
	 	 
	 

	 	          Address:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






 









 








FORM OF ASSIGNMENT




     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the rights of the
undersigned under the within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth hereinbelow, to:



	 	 	 	 	 	 	 	 	 
	Name of Assignee	 	Address	 	 	No. of Shares	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 




, and
hereby irrevocably constitutes and appoints                                          as agent and
attorney-in-fact to transfer said Warrant on the books of the within-named corporation, with full
power of substitution in the premises.




Dated:                                         ,                     




In the presence of




                                        




	 	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 	 	Title of Signing Officer or Agent (if any):
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Note:
	 	The above signature should

correspond exactly with the name on
 the face of the
within Warrant.