Exhibit 10.40**THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY STATE SECURITIES LAWS,AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIESMAY NOT BE SOLD, OFFERED FOR SALE, OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAIDACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UPON RECEIPT BY THE COMPANY OF AN OPINION OFCOUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.**Warrant No. 012207-A**WARRANT TO PURCHASE SHARES OF COMMON STOCK****ISSUE DATE: January 22, 2007**     This certifies that Dr. Augusto Ocana, an individual resident of the State of New Jersey (the“Holder”), for value received, is entitled to purchase from CytoCore, Inc., a Delaware corporationwith its principal business office located at 414 North Orleans Street, Suite 502, Chicago,Illinois 60610 (together with its successors and assigns, the “Company”), subject to the terms andconditions set forth below, at any time or from time to time on and after the Issue Date as setforth above and before 3:00 p.m. (Eastern Time) on January 22, 2010 (the “Expiration Date”), FiveHundred Thousand (500,000) shares of common stock, $.001 par value per share, of the Company(“Common Stock”), at a price per share of $0.20. The shares purchasable upon exercise of thisWarrant, and the applicable purchase price per share, each as adjusted from time to time pursuantto the provisions of this Warrant, are hereinafter referred to as the “Warrant Shares” and the“Purchase Price,” respectively.     1. Exercise of the Warrant.          (a) Exercise. The Holder may, at the Holder’s option, elect to exercise this Warrant,in whole or in part, at any time or from time to time on or after the Issue Date but prior to 3:00p.m. (Eastern Time) on the Expiration Date, by surrendering this Warrant, with the purchase formappended hereto as Exhibit I duly executed by or on behalf of the Holder, at the principaloffice of the Company, or at such other office or agency as the Company may designate, accompaniedby payment in full, in lawful money of the United States, of the Purchase Price payable in respectof the number of Warrant Shares purchased upon such exercise. In no event shall any such exercisebe for fewer than 10,000 Warrant Shares unless fewer than an aggregate of 10,000 Warrant Shares arethen purchasable under all outstanding Warrants held by the Holder. Payment of the aggregatePurchase Price may be made in cash, certified or bank check, or wire transfer of immediatelyavailable funds.          (b) Exercise Date and Status as Holder of Shares. Each exercise of this Warrant shallbe deemed to have been effected immediately prior to the close of business on the
 

 
day on which this Warrant shall have been surrendered to the Company as provided in Subsection1(a) above (the “Exercise Date”). At such time, the Holder shall be deemed to have become theholder or holders of record of the Warrant Shares represented by such certificates.          (c) Issuance of Certificates. As soon as practicable after the exercise of thisWarrant in whole or in part, and in any event within 10 business days thereafter, the Company, atits expense, will cause to be issued in the name of, and delivered to, the Holder:               (i) a certificate or certificates for the number of full Warrant Shares to which the Holdershall be entitled upon such exercise plus, in lieu of any fractional share to which the Holderwould otherwise be entitled, cash in an amount determined pursuant to Section 3 hereof; and               (ii) in case such exercise is in part only, a new warrant or warrants (dated the date hereof)of like tenor, calling in the aggregate on the face or faces thereof for the number of WarrantShares equal (without giving effect to any adjustment therein) to the number of such shares calledfor on the face of this Warrant minus the number of Warrant Shares for which this Warrant was soexercised.          (d) Warrant Shares. The Warrant Shares issued upon any such exercise of this Warrantshall be validly issued, fully paid and non-assessable.     2. Adjustments.          (a) Adjustment for Stock Splits and Combinations. If the Company shall at any time orfrom time to time after the Issue Date (or, if this Warrant was issued upon partial exercise of, orin replacement of, another warrant of like tenor, then the date on which such original warrant wasfirst issued) (either such date being referred to as the “Original Issue Date”) effect asubdivision of the outstanding Common Stock, the Purchase Price then in effect immediately beforethat subdivision shall be proportionately decreased. If the Company shall at any time or from timeto time after the Original Issue Date combine the outstanding shares of Common Stock, the PurchasePrice then in effect immediately before the combination shall be proportionately increased. Anyadjustment under this Subsection 2(a) shall become effective at the close of business on the datethe subdivision or combination becomes effective.          (b) Adjustment for Certain Dividends and Distributions. In the event the Company atany time or from time to time after the Original Issue Date shall make or issue, or fix a recorddate for the determination of holders of Common Stock entitled to receive, a dividend or otherdistribution payable in shares of Common Stock, then and in each such event the Purchase Price thenin effect immediately before such event shall be decreased as of the time of such issuance or, inthe event such a record date shall have been fixed, as of the close of business on such recorddate, by multiplying the Purchase Price then in effect by a fraction:                    (1) the numerator of which shall be the total number of shares of Common Stock issued andoutstanding immediately prior to the time of such issuance or the close of business on such recorddate, and                    (2) the denominator of which shall be the total number of
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shares of Common Stock issued and outstanding immediately prior to the time of such issuanceor the close of business on such record date plus the number of shares of Common Stock issuable inpayment of such dividend or distribution;provided, however, that if such record date shall have been fixed and such dividendis not fully paid or if such distribution is not fully made on the date fixed therefor, thePurchase Price shall be recomputed accordingly as of the close of business on such record date andthereafter the Purchase Price shall be adjusted pursuant to this Subsection 2(b) as of the time ofactual payment of such dividends or distributions.          (c) Adjustment in Number of Warrant Shares. When any adjustment is required to bemade to the Purchase Price pursuant to Subsections 2(a) or 2(b), the number of Warrant Sharespurchasable upon the exercise of this Warrant shall be changed to the number determined by dividing(i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediatelyprior to such adjustment, multiplied by the Purchase Price in effect immediately prior to suchadjustment, by (ii) the Purchase Price in effect immediately after such adjustment.          (d) Adjustment for Reorganization. If there shall occur any reorganization,recapitalization, reclassification, consolidation or merger involving the Company in which theCommon Stock is converted into or exchanged for securities, cash or other property (other than atransaction covered by Subsections 2(a) or 2(b)) (collectively, a “Reorganization”), then,following such Reorganization, the Holder shall receive upon exercise hereof the kind and amount ofsecurities, cash or other property which the Holder would have been entitled to receive pursuant tosuch Reorganization if such exercise had taken place immediately prior to such Reorganization. Inany such case, appropriate adjustment (as determined in good faith by the Board) shall be made inthe application of the provisions set forth herein with respect to the rights and intereststhereafter of the Holder, to the end that the provisions set forth in this Section 2 (includingprovisions with respect to changes in and other adjustments of the Purchase Price) shall thereafterbe applicable, as nearly as reasonably may be, in relation to any securities, cash or otherproperty thereafter deliverable upon the exercise of this Warrant.          (e) No Adjustments in Certain Cases. No adjustment in the number of Warrant Sharespurchasable pursuant to this Warrant shall be required unless the adjustment would require anincrease or decrease of at least one percent (1.0%) in the number of Warrant Shares thenpurchasable upon the exercise of this Warrant. Except as provided in this Section 2, no otheradjustments in the number, kind or price of shares constituting Warrant Shares shall be made duringthe term, or upon the exercise, of this Warrant. Further, no adjustments shall be made pursuant tothis Section 2 hereof in connection with the grant or exercise of presently authorized oroutstanding options to purchase, or the issuance of shares of Common Stock under, the Company’sdirector or employee benefit, option and incentive plans.          (f) Treasury Stock*.*For purposes of this Section 2, shares of Common Stock owned orheld at any relevant time by, or for the account of, the Company, in its treasury or otherwise,shall not be deemed to be outstanding for purposes of the calculations and adjustments hereindescribed.
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     3. Fractional Shares. The Company shall not be required upon the exercise of thisWarrant to issue any fractional shares, but shall pay in cash to the Holder an amount equal to suchfraction multiplied by the fair market value per share of Common Stock, as determined by the Boardof Directors in good faith.     4. Investment Representations. The Holder represents and warrants to the Company asfollows:          (a) Investment. The Holder is acquiring this Warrant, and (if and when such Holderexercises this Warrant) will acquire the Warrant Shares, for such Holder’s own account forinvestment and not with a view to, or for sale in connection with, any distribution thereof, norwith any present intention of distributing or selling the same; and the Holder has no present orcontemplated agreement, undertaking, arrangement, obligation, indebtedness or commitment providingfor the disposition thereof.          (b) Accredited Investor. The Holder is an “accredited investor” as defined in Rule501(a) under the Act.          (c) Experience. The Holder has made such inquiry concerning the Company and itsbusiness and personnel as the Holder has deemed appropriate; and the Holder has sufficientknowledge and experience in finance and business that the Holder is capable of evaluating the risksand merits of an investment in the Company.     5. Restrictions on Transfer.          (a) The Warrant Shares shall not be offered, sold or transferred unless either (i) they firstshall have been registered under the Act and any applicable state securities laws, or (ii) theCompany first shall have been furnished with an opinion of legal counsel, satisfactory to theCompany, to the effect that such offer, sale or transfer is exempt from the registrationrequirements of the Act and any applicable state securities laws.          (b) Each Warrant and certificate representing Warrant Shares shall bear a legend substantiallyin the following form:“The securities represented by this certificate have not been registeredunder the Securities Act of 1933, as amended, or any state securities laws,and may not be offered, sold or otherwise transferred, pledged orhypothecated unless and until such securities are registered under such actand applicable state securities laws or an opinion of counsel reasonablysatisfactory to the Company is obtained to the effect that such registrationis not required.”     The foregoing legend shall be removed from the certificates representing any Warrant Shares,at the request of the holder thereof, at such time as they become eligible for resale pursuant toRule 144 under the Act.
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          (c) The Company will maintain a register containing the name and address of the Holder of thisWarrant. The Holder may change the Holder’s address as shown on the warrant register by writtennotice to the Company requesting such change.          (d) Except as provided herein, this Warrant and all rights hereunder are personal to theHolder, is exercisable only by the Holder, and no rights granted hereunder may be transferred,assigned, pledged or hypothecated in any way (whether by operation of law or otherwise). Upon anyattempt to transfer, assign, pledge, hypothecate or otherwise dispose of this Warrant or of suchrights contrary to the provisions hereto, or upon the levy of any attachment or similar processupon this Warrant or such rights, this Warrant and such rights shall, at the election of theCompany, become null and void. Notwithstanding the foregoing, in the event of the death of theHolder, this Warrant may be exercised by the estate of the Holder, or by any person or persons whoacquired the right to exercise such Warrant by bequest or inheritance or by reason of the death ofthe Holder and, in such case, such person or persons shall be deemed the “Holder” or “Holders”hereunder.     6. No Impairment; Adjustment of Par Value.          (a) The Company will not, by amendment of its charter or through any reorganization, transferof assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntaryaction, 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 takingof all such action as may be necessary or appropriate in order to protect the rights of the Holderagainst impairment.          (b) Before taking any action that would cause an adjustment reducing the Purchase Price pershare below the then par value of the shares of Warrant Shares issuable upon exercise of theWarrant, the Company will take any corporate action that may be necessary in order that the Companymay validly and legally issue fully paid and non-assessable shares of such Warrant Shares at suchadjusted price.     7. Record Date, etc. In the event:          (a) the Company shall take a record of the holders of its Common Stock (or other stock orsecurities at the time deliverable upon the exercise of this Warrant) for the purpose of entitlingor enabling them to receive any dividend or other distribution, or to receive any right tosubscribe for or purchase any shares of stock of any class or any other securities, or to receiveany other right; or          (b) of any capital reorganization of the Company, any reclassification of the Common Stock ofthe Company, any consolidation or merger of the Company with or into another corporation (otherthan a consolidation or merger in which the Company is the surviving entity and its Common Stock isnot converted into or exchanged for any other securities or property), or any transfer of all orsubstantially all of the assets of the Company; or          (c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,
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then, and in each such case, the Company will send or cause to be sent to the Holder a noticespecifying, as the case may be, (i) the record date for such dividend, distribution or right, andthe amount and character of such dividend, distribution or right, or (ii) the effective date onwhich such reorganization, reclassification, consolidation, merger, transfer, dissolution,liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which theholders of record of Common Stock (or such other stock or securities at the time deliverable uponthe exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or suchother stock or securities) for securities or other property deliverable upon such reorganization,reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up. Suchnotice shall be sent at least 10 days prior to the record date or effective date for the eventspecified in such notice.     8. Reservation of Stock. The Company will at all times reserve and keep available,solely for issuance and delivery upon the exercise of this Warrant, such number of Warrant Sharesand other securities, cash and/or property as from time to time shall be issuable upon the exerciseof this Warrant.     9. Exchange or Replacement of Warrants.          (a) Upon the surrender by the Holder of this Warrant, properly endorsed, to the Company at theprincipal office of the Company, the Company will, subject to the provisions of Section 5 hereof,issue and deliver to or upon the order of the Holder, at the Company’s expense, a new Warrant orWarrants of like tenor, in the name of the Holder, calling in the aggregate on the face or facesthereof for the number of shares of Common Stock (or other securities, cash and/or property) thenissuable upon exercise of this Warrant.          (b) Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upondelivery of an indemnity agreement (with surety if reasonably required) in an amount reasonablysatisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of thisWarrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.     10. Notices. All notices and other communications from the Company to the Holder inconnection herewith shall be mailed by certified or registered mail, postage prepaid, or sent via areputable nationwide overnight courier service guaranteeing next business day delivery, to theaddress last furnished to the Company in writing by the Holder. All notices and othercommunications from the Holder to the Company in connection herewith shall be mailed by certifiedor registered mail, postage prepaid, or sent via a reputable nationwide overnight courier serviceguaranteeing next business day delivery, to the Company at its principal office set forth above.If the Company should at any time change the location of its principal office to a place other thanas set forth above, it shall give prompt written notice to the Holder and thereafter all referencesin this Warrant to the location of its principal office at the particular time shall be as sospecified in such notice. All such notices and communications shall be deemed delivered (a) threebusiness days after being sent by certified or registered mail, return receipt requested, postageprepaid, or (b) one business day after being sent via a reputable nationwide overnight courierservice guaranteeing next business day delivery.
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     11. No Rights as Stockholder; No Liability. No provision of this Warrant shall beconstrued as conferring upon the Holder hereof the right to vote, consent, receive dividends orreceive notice as a stockholder in respect of meetings of stockholders for the election ofdirectors of the Company or any other matter whatsoever as a stockholder of the Company. In theabsence of affirmative action by the Holder hereof to purchase shares of Common Stock, no provisionhereof shall give rise to any liability of such Holder for the purchase price or as a stockholderof the Company, whether such liability is asserted by the Company or by creditors of the Company.     12. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,attributable to the initial issuance of this Warrant or the shares of Common Stock comprising theWarrant Shares; provided, however, the Company shall not be required to pay any taxthat may be payable in respect of any permitted transfer of this Warrant or Warrant Shares.     13. Amendment or Waiver. Any term of this Warrant may be amended or waived only by aninstrument in writing signed by the party against which enforcement of the change or waiver issought. No waivers of any term, condition or provision of this Warrant, in any one or moreinstances, shall be deemed to be, or construed as, a further or continuing waiver of any such term,condition or provision or any other term, condition or provision hereof.     14. Section Headings. The section headings in this Warrant are for the convenience ofthe parties only and in no way alter, modify, amend, limit or restrict the contractual obligationsof the parties.     15. Severability. If any provision of this Warrant shall be held invalid, illegal orunenforceable, such invalidity, illegality or unenforceability shall not affect any other provisionof this Warrant and, to this end, the provisions hereof are severable.     16. Assignment. This Warrant shall be binding upon and inure to the benefit of theparties hereto and their respective heirs, executors and personal representatives.     17. Governing Law. This Warrant will be governed by and construed in accordance withthe internal laws of the State of Delaware (without reference to the conflicts of law provisionsthereof).     18. Signatures. This Warrant may be executed in one or more counterparts by facsimilesignature.(Signature appears on next page).
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     EFFECTIVE as of the Issue Date indicated above.      CYTOCORE, INC.        By:        Title:    
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     EXHIBIT IPURCHASE FORM     To:                     Dated:                         The undersigned, pursuant to the provisions set forth in the attached Warrant (No.      ),hereby elects to purchase                      shares of the Common Stock of CytoCore, Inc. by such Warrant.     The undersigned herewith makes payment of the full Purchase Price for such shares at the priceper share provided for in such Warrant. Such payment shall be in the aggregate amount of $                    in cash, certified or bank check, or wire transfer of immediately available funds.         Signature:        Address:                     
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