Document:

Exhibit 4.4

NEITHER
THIS WARRANT NOR THE SHARES OF CAPITAL STOCK PURCHASABLE HEREUNDER HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND, ACCORDINGLY, NEITHER THIS WARRANT NOR SUCH SHARES MAY BE
OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT AND ALL APPLICABLE STATE SECURITIES
LAWS HAVE BEEN COMPLIED WITH OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION
OF COUNSEL ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

	
  No. [            ]

  	
   

  	
  Void after June 26, 2011

  

 

POWER
MEDICAL INTERVENTIONS, INC.

Warrant to Purchase Common Stock

THIS CERTIFIES THAT for
value received, [      ]  or its registered assigns (hereinafter
called the “Holder”)
is entitled to purchase from the Company, at any time during the Term of this
Warrant, [            ] of shares of common stock, $0.001 par value, of
the Company (the “Common
Stock”), at the Warrant Price, payable as provided herein.  The exercise of this Warrant shall be subject
to the provisions, limitations and restrictions herein contained, and may be
exercised in whole or in part.

1.      Definitions.

For all purposes of this
Warrant, the following terms shall have the meanings indicated:

Additional Shares of Common - all shares of Common
Stock issued (or, pursuant to Section 4.1, deemed to be issued) by the Company
after the date hereof, other than:

A.                                   up to
22,080,167 shares of Common Stock issued or issuable to officers, directors or
employees of, or consultants to, the Company or its subsidiaries pursuant to
any of the Plans; provided, that such number may be adjusted upward by the
Board;

B.                                     shares of
Common Stock issued or issuable upon conversion of convertible securities
outstanding on the date hereof;

C.                                     shares of Common
Stock issued or issuable as a dividend or other distribution on shares of
equity securities outstanding on the date hereof;

D.                                    shares of
Common Stock issued or issuable pursuant to a Qualified Public Offering;

 

E.                                      shares of
Common Stock issued or issuable pursuant to an acquisition by the Company
approved by the Board, of another corporation by merger, purchase of
substantially all of the assets, or other reorganization;

F.                                      shares of
Common Stock issued or issuable in connection with equipment lease financing
transactions or bank financing transactions approved by the Board, for which
the principal purpose is not to raise equity funding;

G.                                     shares of
Common Stock issued or issuable in connection with transactions approved by the
Board, with third parties with whom the Company has a business relationship and
for which the principal purpose is not to raise equity funding; and

H.                                    shares of
Common Stock issued or issuable in connection with that certain Series D
Convertible Preferred Stock Purchase Agreement, dated as of the date hereof, by
and among the Company and the investors named herein.

I.                                         shares of
Common Stock issued or issuable in a transaction described in Section 4.4.

Board - the Company’s board of directors.

Convertible Securities - any evidences of
indebtedness, shares or other securities convertible into or exchangeable for
Common Stock.

Options  - rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Common Stock or Convertible Securities.

Plans - the Company’s 2004 Stock Incentive Plan and all
other stock incentive programs, plans and agreements approved by the Board.

Qualified Public Offering - the closing of the
Company’s first sale of Common Stock in a firm commitment underwritten public
offering pursuant to a registration statement under the Securities Act, the
aggregate proceeds of which are not less than $40,000,000 at a price not less
than $0.90 per share.

Securities Act - the Securities Act of
1933, as amended.

Term of this Warrant - the period beginning on
the date of initial issuance hereof and ending on June 26, 2011.

Warrant Price - $0.7848 per share, subject to adjustment
in accordance with Section 4 hereof.

Warrant Shares - shares of Common Stock
purchased or purchasable by the Holder of this Warrant upon the exercise
hereof.

2.      Exercise
of Warrant.

 

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2.1.      Procedure for Exercise of Warrant.  To exercise this Warrant in whole or in part
(but not as to any fractional share of Common Stock), the Holder shall deliver
to the Company at its office referred to in Section 8 hereof at any time and
from time to time during the Term of this Warrant: (i) the Notice of
Exercise in the form attached hereto, (ii) cash, certified or official
bank check payable to the order of the Company, wire transfer of funds to the
Company’s account, or cancellation of any indebtedness of the Company to the
Holder (or any combination of any of the foregoing) in the amount of the
Warrant Price for each share being purchased, and (iii) this Warrant.  Notwithstanding any provisions herein to the
contrary, if the Company has completed a Qualified Public Offering and the
Current Market Price (as defined below) is greater than the Warrant Price (at
the date of calculation, as set forth below), in lieu of exercising this
Warrant as hereinabove permitted, the Holder may elect to receive shares of
Common Stock equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the office of
the Company referred to in Section 8 hereof, together with the Notice of
Exercise, in which event the Company shall issue to the Holder that number of
shares of Common Stock computed using the following formula:

CS = WCS x (CMP-WP)

CMP

Where:

CS                                 equals the
number of shares of Common Stock to be issued to the Holder

WCS                    equals the number of shares
of Common Stock purchasable under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being exercised, at the
date of such calculation

CMP                     equals the Current Market
Price (as defined below) at the date of such calculation

WP                            equals the
Warrant Price as adjusted to the date of such calculation

As used herein, the Current Market Price
of Common Stock shall mean with respect to each share of Common Stock:

(i)     if the Common Stock is traded on a national
securities exchange or quoted on The Nasdaq Stock Market, the fair market value
shall be deemed to be the average of the closing prices over a twenty-one (21)
day period ending three days before the day the current fair market value of
the Common Stock is being determined; or

(ii)    if the Common Stock is not listed on a
national securities exchange or quoted on the Nasdaq Stock Market but is
actively traded over-the-counter, the fair market value shall be deemed to be
the average of the closing bid and asked prices reported by the National
Quotation Bureau (or similar system) over the twenty-one (21) day period ending
three days before the day the current fair market value of the Common Stock is
being determined;

(iii)   if at any time the Common Stock is not listed
on any national securities exchange or quoted on the Nasdaq Stock Market or
actively traded in the over-the-counter market, the current fair market value
of Common Stock shall be the price per share

 

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which the
Company could obtain from a willing buyer (not a current employee or director)
for shares of Common Stock sold by the Company, for authorized but unissued
shares, as determined in good faith by the Board, unless the Company shall
become subject to a merger, acquisition or other consolidation pursuant to
which the holders of Common Stock receive securities and/or other property in
exchange for their Common Stock, in which case the fair market value of Common
Stock shall be deemed to be the value of the securities and other property
received by the holders of the Common Stock per share of Common Stock pursuant
to such merger, acquisition or other consolidation.

In the event of any exercise
of the rights represented by this Warrant, a certificate or certificates for
the shares of Common Stock so purchased, registered in the name of the Holder,
shall be delivered to the Holder hereof within a reasonable time, not exceeding
fifteen (15) days, after the rights represented by this Warrant shall have been
so exercised; and, unless this Warrant has expired, a new Warrant representing
the number of shares (except a remaining fractional share), if any, with
respect to which this Warrant the Holder shall not then have been exercised
shall also be issued to the Holder hereof within such time.  Upon exercise, the holder of this Warrant
shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock issued upon such exercise on the date on which the
Warrant was surrendered and payment of the Warrant Price and any applicable
taxes was made, irrespective of the date of delivery of such certificate,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, the Holder shall be deemed to have
become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open.

2.2.      Transfer Restriction Legend.  Each certificate for Warrant Shares shall
bear the following legend (and any additional legend required by (i) any
applicable state securities laws and (ii) any securities exchange upon
which such Warrant Shares may, at the time of such exercise, be listed) on the
face thereof unless at the time of exercise such Warrant Shares shall be
registered under the Securities Act:

“The shares represented by
this certificate have not been registered under the Securities Act of 1933, as
amended, or the securities laws of any state or other jurisdiction, and may not
be sold or transferred in the absence of such registration or an exemption
therefrom under said Act and other applicable securities laws.”

Any certificate issued at
any time in exchange or substitution for any certificate bearing such legend
(except a new certificate issued upon completion of a public distribution under
a registration statement of the securities represented thereby) shall also bear
such legend unless, in the opinion of counsel for the holder thereof (which
counsel shall be reasonably satisfactory to counsel for the Company) the
securities represented thereby are not, at such time, required by law to bear
such legend.

2.3.      Investment Undertakings.  The Holder represents and warrants that: (a) the
Holder is acquiring this Warrant for its own account for investment and not
with a view to any re-sale or distribution thereof which violates the
Securities Act or any rules or regulations thereunder, (b) the Holder is
an “accredited investor” as that term is defined in Rule 501 of Regulation D
under the Securities Act and (c) the Holder has sufficient knowledge and 

 

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experience in
business, financial and investment matters to evaluate the merits and risks
involved in an investment in the Company, and has received all information
concerning the Company which it has requested. 
The Holder understands that this Warrant constitutes, and upon exercise
hereof the Warrant Shares will constitute, “restricted securities” within the
meaning of Rule 144 under the Securities Act. 
The Holder agrees that it will not sell, pledge or otherwise transfer
all or any part of this Warrant or the Warrant Shares without (i) complying
with the registration requirements of the Securities Act and the requirements
of all applicable securities laws of any state or other jurisdiction, and (ii) furnishing
the Company with an opinion of counsel satisfactory to the Company, in form and
substance reasonably satisfactory to the Company, that such transfer is not in
violation of any such requirement.  As a
condition precedent to the exercise of this Warrant, the Company may require
the Holder to deliver an investment letter, in form and substance reasonably
satisfactory to the Company, containing statements applying to the Warrant
Shares to the effect of the foregoing.

3.      Adjustment
of Number of Shares.  Upon each
adjustment of the Warrant Price as provided in Section 4, the Holder shall
thereafter be entitled to purchase, at the Warrant Price resulting from such
adjustment, the number of shares (calculated to the nearest tenth of a share)
obtained by multiplying the Warrant Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Warrant Price
resulting from such adjustment.

4.      Adjustment
of Warrant Price.  The Warrant Price
shall be subject to adjustment from time to time as follows:

4.1.      Deemed Additional Shares.  In the event the Company at any time or from
time to time after the date hereof shall issue any Options (excluding for all purposes
of this Section 4.1 Options excluded from the definition of Additional Shares
of Common) or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein designed to protect against dilution) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the exercise of such Options and conversion or
exchange of such Convertible Securities shall be deemed to be Additional Shares
of Common issued as of the time of such issue or, in case such a record date
shall have been fixed, as of the close of business on such record date,
provided that Additional Shares of Common shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section 4.3
hereof) of such Additional Shares of Common would be less than the Warrant
Price in effect on the date of and immediately prior to such issuance, or such
record date, as the case may be, and provided further that in any such case in
which Additional Shares of Common are deemed to be issued:

(i)     no further adjustment in the Warrant Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of
such Convertible Securities;

(ii)    if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable 

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to the
Company, or increase or decrease in the number of shares of Common Stock
issuable, upon the exercise, conversion or exchange, the Warrant Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto), and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options or the rights of
conversion or exchange under such Convertible Securities;

(iii)   upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Warrant Price computed upon the original
issue thereof or upon the occurrence of a record date with respect thereto, and
any subsequent adjustments based thereon, shall, upon such expiration, be
recomputed as if:

(a) in the case of Convertible Securities or Options for Common Stock,
the only Additional Shares of Common issued were the shares of Common Stock, if
any, actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, and the consideration received
therefor was the consideration actually received by the Company for the issue
of all such Options, whether or not exercised, plus the consideration actually
received by the Company upon such exercise, or for the issue of all such
Convertible Securities, which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the Company upon such
conversion or exchange; and

(b) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued upon the exercise thereof were
issued at the time of issue of such Options, and the consideration received by
the Company for the Additional Shares of Common deemed to have been then issued
was the consideration actually received by the Company for the issue of all
such Options, whether or not exercised, plus the consideration deemed to have
been received by the Company (determined pursuant to Section 4.3 hereof) upon
the issue of the Convertible Securities with respect to which such Options were
actually exercised;

(iv)   no readjustment pursuant to Section 4.1(ii)
or (iii) above shall have the effect of increasing the Warrant Price to an
amount which exceeds the lower of (a) the Warrant Price on the original
adjustment date, or (b) the Warrant Price that would have resulted from
any issuance of Additional Shares of Common between the original adjustment
date and such readjustment date;

(v)    in the case of any Option or Convertible
Securities with respect to which the maximum number of shares of Common Stock
issuable upon exercise or conversion or exchange thereof is not determinable,
no adjustment to the Warrant Price shall be made until such number becomes
determinable; and

(vi)   if such record date shall have been fixed and
such Options or Convertible Securities are not issued on the date fixed
therefor, the adjustment previously made in the Warrant Price which became
effective on such record date shall be canceled as of the close of business on
such record date, and thereafter the Warrant Price shall be adjusted pursuant
to this Section 4.1 as of the actual date of their issuance.

 

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4.2.      Adjustment of Warrant Price Upon
Issuance of Additional Shares of Common. 
In the event the Company shall issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section 4.1 but excluding adjustments made pursuant to Section 4.4 after the
date hereof without consideration or for a consideration per share less than
the Warrant Price in effect immediately prior to such issuance, then and in
each such event the Warrant Price shall be reduced to a price (rounded to the
nearest one cent) equal to such Warrant Price multiplied by a fraction:

(i)     the numerator of which is equal to the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of shares of Common Stock which the aggregate consideration
received by the Company for the total number of Additional Shares of Common
Stock so issued would purchase at the Warrant Price in effect immediately prior
to such issuance; and

(ii)    the denominator of which is equal to the
number of shares of Common Stock outstanding immediately prior to such issuance
plus the number of Additional Shares of Common Stock so issued.

For the purposes of this
Section 4.2, the number of shares of Common Stock outstanding shall be deemed
to include the Common Stock issuable upon full exercise and conversion of all
then outstanding Options and Convertible Securities.

4.3.      Determination of Consideration.  For purposes of this Section 4, the
consideration received by the Company for the issue of any Additional Shares of
Common shall be computed as follows:

(i)     Cash and Property: Such
consideration shall:

(a) insofar as it consists of cash, be computed at the aggregate amount
of cash received by the Company after deducting any commissions paid by the
Company with respect to such issuance;

(b) insofar as it consists of property other than cash, be computed at
the fair value thereof at the time of such issue, as determined in the good
faith by the Board; and

(c) in the event Additional Shares of Common are issued (or, pursuant to
Section 4.1, deemed to be issued) together with other shares or securities or
other assets of the Company for consideration which covers both, be the
proportion of such consideration so received, computed as provided in Sections 4.3(i)(a)
and (b) above, as determined in good faith by the Board.

(ii)    Options and Convertible Securities.  The consideration per share received by the
Company for Additional Shares of Common deemed to have been issued pursuant to
Section 4.1, relating to Options and Convertible Securities, shall equal the
quotient determined by dividing:

 

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(a) the total amount, if any, received or receivable by the Company as
consideration for the issue of such Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein
designed to protect against dilution) payable to the Company upon the exercise
of such Options or the conversion or exchange of such Convertible Securities,
or in the case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of such
Convertible Securities, by

(b) the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained
designed to protect against dilution) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities, or in the
case of Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities.

4.4.      Other Adjustments to Warrant Price.  The Warrant Price shall also be subject to
adjustment from time to time as follows:

(i)     Adjustments for Subdivisions or Combinations
of Common Stock.  In the event the
outstanding shares of Common Stock shall be subdivided by stock split, stock
dividend, reclassification or otherwise, into a greater number of shares of
Common Stock or the Company declares a dividend payable in any right to acquire
Common Stock for no consideration, the Warrant Price immediately prior to such
event shall, concurrently with the effectiveness of such subdivision, be
proportionately decreased.  In the event
the outstanding shares of Common Stock shall be combined or consolidated by
reclassification or otherwise into a lesser number of shares of Common Stock,
the Warrant Price then in effect shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.

(ii)    Adjustments for Reorganizations,
Reclassifications or Similar Events. 
If the Common Stock shall be changed into the same or a different number
of shares of any other class or classes of stocks, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination of shares provided for in Section 4.4(i) above), then the Warrant
Price then in effect shall, concurrently with the effectiveness of such
reorganization or reclassification, be proportionately adjusted to equal the
quotient of (a) the Warrant Price immediately prior to such reorganization
or reclassification and (b) the number of shares of such class of stock
into which the Common Stock is changed, and thereafter this Warrant shall be a
warrant for such class of stock.

4.5.      Miscellaneous.

(i)     All calculations under this Section 4 shall
be made to the nearest cent or to the nearest one hundredth (1/100) of a share,
as the case may be.

(ii)    No adjustment in a Warrant Price need be
made if such adjustment would result in a change in such Warrant Price of less
than $0.01.  Any adjustment of less than
$0.01 which is not made shall be carried forward and shall be made at the time
of and together 

 

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with any
subsequent adjustment which, on a cumulative basis, amounts to an adjustment of
$0.01 or more in such Warrant Price.

(iii)   Whenever the Warrant Price shall be adjusted
as provided in this Section 4, the Company shall prepare a statement showing
the facts requiring such adjustment and the Warrant Price that shall be in
effect after such adjustment and provide such statement to the Holder of this
Warrant.  No notice of adjustment in the
Warrant Price shall be required by this Section 4.5 unless such adjustment
results in a change in such Warrant Price of $0.05 per share or greater.  In the event of an adjustment in the Warrant
Price which is less than $0.05 per share, the Secretary of the Company shall
maintain a written ledger identifying such adjustment in the Warrant Price and
such information shall be made available to the Holder of this Warrant upon
request.

4.6.      Waiver of Adjustment of Warrant Price.  Notwithstanding anything herein to the
contrary, the operation of, and any adjustment of the Warrant Price pursuant
to, this Section 4 may be waived, either prospectively or retroactively and
either generally or in a particular instance. 
Any waiver pursuant to this Section 4.6 shall bind all future holders of
this Warrant.

5.                   Ownership.

5.1.      Ownership of This Warrant.  The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any
notice to the contrary until the effective transfer of this Warrant in
accordance with Section 5.3.

5.2.      Substitution.  In case this Warrant shall be mutilated,
lost, stolen or destroyed, the Company shall issue a new Warrant of like tenor
and denomination and deliver the same (a) in exchange and substitution for
and upon surrender and cancellation of any mutilated Warrant, or (b) in
lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft, or destruction of such Warrant
(including a reasonably detailed affidavit with respect to the circumstances of
any loss, theft or destruction), and an indemnity agreement reasonably
satisfactory to the Company.

5.3.      Transfer.  Except as restricted herein, this Warrant may
be transferred by the Holder in whole or in part at any time or from time to
time.  Upon surrender of this Warrant to
the Company or, if the Company so instructs the Holder in writing, at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and, provided that the
Holder complies with the provisions of this Warrant, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee named in
such instrument of assignment, and this Warrant shall promptly be
canceled.  Any transferee of this
Warrant, by acceptance thereof, agrees to assume all of the obligations of the
Holder and to be bound by all of the terms and provisions of this Warrant.  Prior to any proposed transfer of this
Warrant, the Holder shall give written notice to the Company of its intention
to effect such transfer, identifying the transferee and describing the manner
of the proposed transfer and, if requested by the Company, accompanied by (a) investment
undertakings by the transferee 

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similar to
those made by the Holder in Section 2.3 and (b) an opinion of counsel
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the Securities Act and without registration
or qualification under applicable state or other securities laws.  Any attempted assignment, transfer, pledge,
hypothecation or other disposition of this Warrant in any way contrary to the
provisions of this Warrant, or any levy of execution, attachment or other
process attempted upon the Warrant, shall be void and without effect.

6.   Mergers, Consolidation,
Sales.  In the case of any
consolidation or merger of the Company with another entity, lawful and adequate
provision shall be made whereby the Holder of this Warrant shall thereafter
have the right to receive upon the basis and upon the terms and conditions
specified herein, in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable hereunder, such shares of stock, securities
or assets as may (by virtue of such consolidation, merger, sale, reorganization
or reclassification) be issued or payable with respect to or in exchange for
the number of shares of such Common Stock purchasable hereunder immediately before
such consolidation, merger, sale, reorganization or reclassification.  In any such case appropriate provision shall
be made with respect to the rights and interests of the Holder of this Warrant
to the end that the provisions hereof shall thereafter be applicable as nearly
as may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of this Warrant.

7.   Fractional Shares.  Notwithstanding anything herein to the
contrary, fractional shares shall not be issued upon the exercise of this
Warrant but in any case where the Holder would, except for the provisions of
this Section 7, be entitled under the terms hereof to receive a fractional
share upon the complete exercise of this Warrant, the Company shall, upon the
exercise of this Warrant for the largest number of whole shares then called
for, pay a sum in cash equal to the excess of the value of such fractional
share (determined in such reasonable manner as may be prescribed in good faith
by the Board) over the Warrant Price for such fractional share.

8.   Notices.  All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively
given (a) when delivered in person or duly sent by fax showing
confirmation of receipt, (b) three days after being duly sent by first
class mail postage prepaid, or (c) two days after being duly sent by
Federal Express or other recognized express overnight courier service: (i) to
the Holder, to the Holder’s address set forth on the signature page hereto, or
at such other address as shall have been furnished to the other parties hereto
in writing, or (ii) if to the Company, to Power Medical Interventions,
Inc., 2021 Cabot Boulevard West, Langhorne, Pennsylvania 19047, Attn: Chief
Financial Officer, or such other address as the Company shall have furnished to
the other parties hereto in writing with a copy to (which shall not constitute
notice) Foley Hoag LLP, Seaport World Trade Center West, 155 Seaport Boulevard,
Boston, Massachusetts 02210, Attn: Jeffrey L. Quillen, Esq.  Notwithstanding the foregoing, copies of
notices of exercise of this Warrant shall not be required to be sent to Mr.
Quillen.

9.   No Rights as Stockholder;
Limitation of Liability.  This
Warrant shall not entitle the Holder to any of the rights of a shareholder of
the Company except upon exercise in accordance with the terms hereof.  No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
mere enumeration herein of the rights

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or privileges of the Holder, shall give rise to any
liability of the Holder for the Warrant Price hereunder or as a shareholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.

10. Governing Law.  THE VALIDITY, INTERPRETATION, AND ENFORCEMENT
OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.

11. Headings.  The headings in this Warrant are inserted for
convenience of reference only and shall not affect the interpretation of this
Warrant.  Whenever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in either the
masculine or the neuter gender shall include the masculine, the feminine and
the neuter.

12. Amendments.  No provision of this Warrant may be amended
or waived except with the written consent of the Company and the Holder and
their successors and assigns provided, however, that the Holder may waive any
right or benefit hereunder by its written consent.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer this 26th day of June, 2006.

	
  Holder: 

  	
  POWER MEDICAL INTERVENTIONS,
  INC.  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Michael P. Whitman

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
					

 

 

FORM
OF NOTICE OF EXERCISE

[To
be signed only upon exercise of the Warrant]

TO
BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE THE WITHIN WARRANT

The
undersigned hereby exercises the right to purchase _________ shares of Common
Stock which the undersigned is entitled to purchase by the terms of the within
Warrant according to the conditions thereof, and herewith

[check one]

o  makes payment of $__________ therefor; or

o  directs the Company to issue ______ shares,
and to withhold ____ shares in lieu of payment of the Warrant Price, as
described in Section 2.1 of the Warrant.

All shares to be issued
pursuant hereto shall be issued in the name of and the initial address of such
person to be entered on the books of the Company shall be:

 

 

 

The shares are to be issued
in certificates of the following denominations:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [Type Name of Holder]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:Exhibit 4.5

NEITHER
THIS WARRANT NOR THE SHARES OF CAPITAL STOCK PURCHASABLE HEREUNDER HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND, ACCORDINGLY, NEITHER THIS WARRANT NOR SUCH SHARES MAY BE
OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS
THE REGISTRATION PROVISIONS OF SUCH ACT AND ALL APPLICABLE STATE SECURITIES
LAWS HAVE BEEN COMPLIED WITH OR UNLESS THE CORPORATION HAS RECEIVED AN OPINION
OF COUNSEL ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

No. CS —                                                                                                                              Void
after [DATE], 2011

POWER
MEDICAL INTERVENTIONS, INC.

Warrant to Purchase Common Stock

THIS CERTIFIES THAT for
value received, [NAME] or its registered assigns (hereinafter called the “Holder”) is entitled
to purchase from the Company, at any time during the Term of this Warrant, [NUMBER] of shares of common stock, $0.001
par value, of the Company (the “Common Stock”), at the Warrant Price (as defined in Section
1), payable as provided herein.  The
exercise of this Warrant shall be subject to the provisions, limitations and
restrictions herein contained, and may be exercised in whole or in part.

1.                                       Definitions.

For all purposes of this
Warrant, the following terms shall have the meanings indicated:

Additional Shares of Common - all shares of Common
Stock issued (or, pursuant to Section 4.1, deemed to be issued) by the Company
after the date hereof, other than:

A.                                   up to
22,080,167 shares of Common Stock issued or issuable to officers, directors or
employees of, or consultants to, the Company or its subsidiaries pursuant to
any of the Plans; provided, that such number may be adjusted upward by the
Board;

B.                                     shares of
Common Stock issued or issuable upon conversion of convertible securities
outstanding on the date hereof;

C.                                     shares of
Common Stock issued or issuable as a dividend or other distribution on shares
of equity securities outstanding on the date hereof;

D.                                    shares of
Common Stock issued or issuable pursuant to a Qualified Public Offering;

 

 

E.                                      shares of Common
Stock issued or issuable pursuant to an acquisition by the Company approved by
the Board, of another corporation by merger, purchase of substantially all of
the assets, or other reorganization;

F.                                      shares of
Common Stock issued or issuable in connection with equipment lease financing
transactions or bank financing transactions approved by the Board, for which
the principal purpose is not to raise equity funding;

G.                                     shares of
Common Stock issued or issuable in connection with transactions approved by the
Board, with third parties with whom the Company has a business relationship and
for which the principal purpose is not to raise equity funding;

H.                                    shares of
Common Stock issued or issuable in connection with that certain Series D
Convertible Preferred Stock Purchase Agreement, dated as of the date hereof, by
and among the Company and the investors named herein; and

I.                                         shares of
Common Stock issued or issuable in a transaction described in Section 4.4.

Board - the Company’s board of directors.

Convertible Securities - any evidences of
indebtedness, shares or other securities convertible into or exchangeable for
Common Stock.

Options  - rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Common Stock or Convertible Securities.

Plans - the Company’s 2004 Stock Incentive Plan and all
other stock incentive programs, plans and agreements approved by the Board.

Qualified Public Offering - the closing of the
Company’s first sale of Common Stock in a firm commitment underwritten public offering
pursuant to a registration statement under the Securities Act, the aggregate
proceeds of which are not less than $40,000,000 at a price not less than $0.83
per share.

Securities Act - the Securities Act of
1933, as amended.

Term of this Warrant - the period beginning on
the date of initial issuance hereof and ending on [INSERT THE
DATE THAT IS THE FIFTH ANNIVERSARY OF THE DATE OF ISSUANCE.]

Warrant Price - $0.810 per share, subject to adjustment in
accordance with Section 4 hereof.

Warrant Shares - shares of Common Stock
purchased or purchasable by the Holder of this Warrant upon the exercise
hereof.

 

2

 

2.                                       Exercise of Warrant.

2.1.          Procedure for Exercise of Warrant.  To exercise this Warrant in whole or in part
(but not as to any fractional share of Common Stock), the Holder shall deliver
to the Company at its office referred to in Section 8 hereof at any time and
from time to time during the Term of this Warrant: (i) the Notice of
Exercise in the form attached hereto, (ii) cash, certified or official
bank check payable to the order of the Company, wire transfer of funds to the
Company’s account, or cancellation of any indebtedness of the Company to the
Holder (or any combination of any of the foregoing) in the amount of the
Warrant Price for each share being purchased, and (iii) this Warrant.  Notwithstanding any provisions herein to the
contrary, if the Company has completed a Qualified Public Offering and the
Current Market Price (as defined below) is greater than the Warrant Price (at
the date of calculation, as set forth below), in lieu of exercising this
Warrant as hereinabove permitted, the Holder may elect to receive shares of
Common Stock equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the office of
the Company referred to in Section 8 hereof, together with the Notice of
Exercise, in which event the Company shall issue to the Holder that number of
shares of Common Stock computed using the following formula:

CS = WCS x (CMP-WP)

CMP

Where:

CS                                 equals the
number of shares of Common Stock to be issued to the Holder

WCS                    equals the number of shares
of Common Stock purchasable under the Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant being exercised, at the date of
such calculation

CMP                     equals the Current Market
Price (as defined below) at the date of such calculation

WP                            equals the
Warrant Price as adjusted to the date of such calculation

As used herein, the Current Market Price
of Common Stock shall mean with respect to each share of Common Stock:

(i)            if the Common Stock is traded on a
national securities exchange or quoted on The Nasdaq Stock Market, the fair
market value shall be deemed to be the average of the closing prices over a
twenty-one (21) day period ending three days before the day the current fair
market value of the Common Stock is being determined; or

(ii)           if the Common Stock is not listed on
a national securities exchange or quoted on the Nasdaq Stock Market but is
actively traded over-the-counter, the fair market value shall be deemed to be
the average of the closing bid and asked prices reported by the National
Quotation Bureau (or similar system) over the twenty-one (21) day period ending
three days before the day the current fair market value of the Common Stock is
being determined;

 

3

 

(iii)          if at any time the Common Stock is not
listed on any national securities exchange or quoted on the Nasdaq Stock Market
or actively traded in the over-the-counter market, the current fair market
value of Common Stock shall be the price per share which the Company could
obtain from a willing buyer (not a current employee or director) for shares of
Common Stock sold by the Company, for authorized but unissued shares, as
determined in good faith by the Board, unless the Company shall become subject
to a merger, acquisition or other consolidation pursuant to which the holders
of Common Stock receive securities and/or other property in exchange for their
Common Stock, in which case the fair market value of Common Stock shall be
deemed to be the value of the securities and other property received by the
holders of the Common Stock per share of Common Stock pursuant to such merger,
acquisition or other consolidation.

In the event of any exercise
of the rights represented by this Warrant, a certificate or certificates for
the shares of Common Stock so purchased, registered in the name of the Holder,
shall be delivered to the Holder hereof within a reasonable time, not exceeding
fifteen (15) days, after the rights represented by this Warrant shall have been
so exercised; and, unless this Warrant has expired, a new Warrant representing
the number of shares (except a remaining fractional share), if any, with
respect to which this Warrant the Holder shall not then have been exercised
shall also be issued to the Holder hereof within such time.  Upon exercise, the holder of this Warrant
shall for all purposes be deemed to have become the holder of record of the
shares of Common Stock issued upon such exercise on the date on which the
Warrant was surrendered and payment of the Warrant Price and any applicable
taxes was made, irrespective of the date of delivery of such certificate,
except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, the Holder shall be deemed to have
become the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open.

2.2.          Transfer Restriction Legend.  Each certificate for Warrant Shares shall
bear the following legend (and any additional legend required by (i) any
applicable state securities laws and (ii) any securities exchange upon
which such Warrant Shares may, at the time of such exercise, be listed) on the
face thereof unless at the time of exercise such Warrant Shares shall be
registered under the Securities Act:

“THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND OTHER APPLICABLE SECURITIES LAWS.”

Any certificate issued at
any time in exchange or substitution for any certificate bearing such legend
(except a new certificate issued upon completion of a public distribution under
a registration statement of the securities represented thereby) shall also bear
such legend unless, in the opinion of counsel for the holder thereof (which
counsel shall be reasonably satisfactory to counsel for the Company) the
securities represented thereby are not, at such time, required by law to bear
such legend.

 

4

 

2.3.          Investment Undertakings.  The Holder represents and warrants that: (a) the
Holder is acquiring this Warrant for its own account for investment and not
with a view to any re-sale or distribution thereof which violates the
Securities Act or any rules or regulations thereunder, (b) the Holder is
an “accredited investor” as that term is defined in Rule 501 of Regulation D
under the Securities Act and (c) the Holder has sufficient knowledge and
experience in business, financial and investment matters to evaluate the merits
and risks involved in an investment in the Company, and has received all
information concerning the Company which it has requested.  The Holder understands that this Warrant
constitutes, and upon exercise hereof the Warrant Shares will constitute, “restricted
securities” within the meaning of Rule 144 under the Securities Act.  The Holder agrees that it will not sell,
pledge or otherwise transfer all or any part of this Warrant or the Warrant
Shares without (i) complying with the registration requirements of the
Securities Act and the requirements of all applicable securities laws of any
state or other jurisdiction, and (ii) furnishing the Company with an
opinion of counsel satisfactory to the Company, in form and substance
reasonably satisfactory to the Company, that such transfer is not in violation
of any such requirement.  As a condition
precedent to the exercise of this Warrant, the Company may require the Holder
to deliver an investment letter, in form and substance reasonably satisfactory
to the Company, containing statements applying to the Warrant Shares to the
effect of the foregoing.

                3.             Adjustment of Number of Shares.  Upon each adjustment of the Warrant Price as
provided in Section 4, the Holder shall thereafter be entitled to purchase, at
the Warrant Price resulting from such adjustment, the number of shares
(calculated to the nearest tenth of a share) obtained by multiplying the
Warrant Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the Warrant Price resulting from such
adjustment.

                4.             Adjustment of Warrant Price.  The Warrant Price shall be subject to
adjustment from time to time as follows:

4.1.          Deemed Additional Shares.  In the event the Company at any time or from
time to time after the date hereof shall issue any Options (excluding for all
purposes of this Section 4.1 Options excluded from the definition of Additional
Shares of Common) or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein designed to protect against dilution) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the exercise of such Options and conversion or
exchange of such Convertible Securities shall be deemed to be Additional Shares
of Common issued as of the time of such issue or, in case such a record date
shall have been fixed, as of the close of business on such record date,
provided that Additional Shares of Common shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section 4.3
hereof) of such Additional Shares of Common would be less than the Warrant
Price in effect on the date of and immediately prior to such issuance, or such
record date, as the case may be, and provided further that in any such case in
which Additional Shares of Common are deemed to be issued:

 

5

 

(i)            no further adjustment in the Warrant
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;

(ii)           if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase or decrease in the consideration payable to the Company, or
increase or decrease in the number of shares of Common Stock issuable, upon the
exercise, conversion or exchange, the Warrant Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange
under such Convertible Securities;

(iii)          upon the expiration of any such
Options or any rights of conversion or exchange under such Convertible
Securities which shall not have been exercised, the Warrant Price computed upon
the original issue thereof or upon the occurrence of a record date with respect
thereto, and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:

(a)           in the case of Convertible Securities or Options for
Common Stock, the only Additional Shares of Common issued were the shares of
Common Stock, if any, actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, and the consideration
received therefor was the consideration actually received by the Company for
the issue of all such Options, whether or not exercised, plus the consideration
actually received by the Company upon such exercise, or for the issue of all
such Convertible Securities, which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Company upon
such conversion or exchange; and

(b)           in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued upon the exercise thereof
were issued at the time of issue of such Options, and the consideration
received by the Company for the Additional Shares of Common deemed to have been
then issued was the consideration actually received by the Company for the
issue of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company (determined pursuant to Section 4.3
hereof) upon the issue of the Convertible Securities with respect to which such
Options were actually exercised;

(iv)          no readjustment pursuant to Section
4.1(ii) or (iii) above shall have the effect of increasing the Warrant Price to
an amount which exceeds the lower of (a) the Warrant Price on the original
adjustment date, or (b) the Warrant Price that would have resulted from
any issuance of Additional Shares of Common between the original adjustment
date and such readjustment date;

(v)           in the case of any Option or
Convertible Securities with respect to which the maximum number of shares of
Common Stock issuable upon exercise or conversion or exchange thereof is not
determinable, no adjustment to the Warrant Price shall be made until such
number becomes determinable; and

 

6

 

(vi)          if such record date shall have been
fixed and such Options or Convertible Securities are not issued on the date
fixed therefor, the adjustment previously made in the Warrant Price which became
effective on such record date shall be canceled as of the close of business on
such record date, and thereafter the Warrant Price shall be adjusted pursuant
to this Section 4.1 as of the actual date of their issuance.

4.2.          Adjustment of Warrant Price Upon
Issuance of Additional Shares of Common. 
In the event the Company shall issue Additional Shares of Common Stock
(including Additional Shares of Common Stock deemed to be issued pursuant to
Section 4.1 but excluding adjustments made pursuant to Section 4.4 after the
date hereof without consideration or for a consideration per share less than
the Warrant Price in effect immediately prior to such issuance, then and in
each such event the Warrant Price shall be reduced to a price (rounded to the
nearest one cent) equal to such Warrant Price multiplied by a fraction:

(i)            the numerator of which is equal to
the number of shares of Common Stock outstanding immediately prior to such
issuance plus the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of Additional Shares
of Common Stock so issued would purchase at the Warrant Price in effect
immediately prior to such issuance; and

(ii)           the denominator of which is equal to
the number of shares of Common Stock outstanding immediately prior to such
issuance plus the number of Additional Shares of Common Stock so issued.

For the purposes of this
Section 4.2, the number of shares of Common Stock outstanding shall be deemed
to include the Common Stock issuable upon full exercise and conversion of all
then outstanding Options and Convertible Securities.

4.3.          Determination of Consideration.  For purposes of this Section 4, the
consideration received by the Company for the issue of any Additional Shares of
Common shall be computed as follows:

(i)            Cash and Property: Such
consideration shall:

(a)           insofar as it consists of cash, be computed at the
aggregate amount of cash received by the Company after deducting any
commissions paid by the Company with respect to such issuance;

(b)           insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of such issue, as determined in
the good faith by the Board; and

(c)           in the event Additional Shares of Common are issued (or,
pursuant to Section 4.1, deemed to be issued) together with other shares or
securities or other assets of the Company for consideration which covers both,
be the proportion of such consideration so received, computed as provided in
Sections 4.3(i)(a) and (b) above, as determined in good faith by the Board.

 

7

 

(ii)           Options and Convertible Securities.  The consideration per share received by the
Company for Additional Shares of Common deemed to have been issued pursuant to
Section 4.1, relating to Options and Convertible Securities, shall equal the
quotient determined by dividing:

(a)           the total amount, if any, received or receivable by the
Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein designed to protect against dilution) payable to the Company
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by

(b)           the maximum number of shares of Common Stock (as set forth
in the instruments relating thereto, without regard to any provision contained
designed to protect against dilution) issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities, or in the
case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities.

4.4.          Other Adjustments to Warrant Price.  The Warrant Price shall also be subject to
adjustment from time to time as follows:

(i)            Adjustments for Subdivisions or
Combinations of Common Stock.  In the
event the outstanding shares of Common Stock shall be subdivided by stock
split, stock dividend, reclassification or otherwise, into a greater number of
shares of Common Stock or the Company declares a dividend payable in any right
to acquire Common Stock for no consideration, the Warrant Price immediately
prior to such event shall, concurrently with the effectiveness of such subdivision,
be proportionately decreased.  In the
event the outstanding shares of Common Stock shall be combined or consolidated
by reclassification or otherwise into a lesser number of shares of Common
Stock, the Warrant Price then in effect shall, concurrently with the
effectiveness of such combination or consolidation, be proportionately
increased.

(ii)           Adjustments for Reorganizations,
Reclassifications or Similar Events. 
If the Common Stock shall be changed into the same or a different number
of shares of any other class or classes of stocks, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or
combination of shares provided for in Section 4.4(i) above), then the Warrant
Price then in effect shall, concurrently with the effectiveness of such
reorganization or reclassification, be proportionately adjusted to equal the
quotient of (a) the Warrant Price immediately prior to such reorganization
or reclassification and (b) the number of shares of such class of stock
into which the Common Stock is changed, and thereafter this Warrant shall be a
warrant for such class of stock.

4.5.          Miscellaneous.

 

8

 

(i)            All calculations under this Section
4 shall be made to the nearest cent or to the nearest one hundredth (1/100) of
a share, as the case may be.

(ii)           No adjustment in a Warrant Price need
be made if such adjustment would result in a change in such Warrant Price of
less than $0.01.  Any adjustment of less
than $0.01 which is not made shall be carried forward and shall be made at the
time of and together with any subsequent adjustment which, on a cumulative
basis, amounts to an adjustment of $0.01 or more in such Warrant Price.

(iii)          Whenever the Warrant Price shall be
adjusted as provided in this Section 4, the Company shall prepare a statement
showing the facts requiring such adjustment and the Warrant Price that shall be
in effect after such adjustment and provide such statement to the Holder of
this Warrant.  No notice of adjustment in
the Warrant Price shall be required by this Section 4.5 unless such adjustment
results in a change in such Warrant Price of $0.05 per share or greater.  In the event of an adjustment in the Warrant
Price which is less than $0.05 per share, the Secretary of the Company shall
maintain a written ledger identifying such adjustment in the Warrant Price and
such information shall be made available to the Holder of this Warrant upon
request.

4.6.          Waiver of Adjustment of Warrant
Price.  Notwithstanding anything herein
to the contrary, the operation of, and any adjustment of the Warrant Price
pursuant to, this Section 4 may be waived, either prospectively or
retroactively and either generally or in a particular instance.  Any waiver pursuant to this Section 4.6 shall
bind all future holders of this Warrant.

5.             Ownership.

5.1.          Ownership of This Warrant.  The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any
notice to the contrary until the effective transfer of this Warrant in
accordance with Section 5.3.

5.2.          Substitution.  In case this Warrant shall be mutilated,
lost, stolen or destroyed, the Company shall issue a new Warrant of like tenor
and denomination and deliver the same (a) in exchange and substitution for
and upon surrender and cancellation of any mutilated Warrant, or (b) in
lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft, or destruction of such Warrant
(including a reasonably detailed affidavit with respect to the circumstances of
any loss, theft or destruction), and an indemnity agreement reasonably
satisfactory to the Company.

5.3.          Transfer.  Except as restricted herein, this Warrant may
be transferred by the Holder in whole or in part at any time or from time to
time.  Upon surrender of this Warrant to
the Company or, if the Company so instructs the Holder in writing, at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and, provided that the
Holder complies with the provisions of this Warrant, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee 

 

9

 

named in such
instrument of assignment, and this Warrant shall promptly be canceled.  Any transferee of this Warrant, by acceptance
thereof, agrees to assume all of the obligations of the Holder and to be bound
by all of the terms and provisions of this Warrant.  Prior to any proposed transfer of this
Warrant, the Holder shall give written notice to the Company of its intention
to effect such transfer, identifying the transferee and describing the manner
of the proposed transfer and, if requested by the Company, accompanied by (a) investment
undertakings by the transferee similar to those made by the Holder in Section
2.3 and (b) an opinion of counsel satisfactory to the Company to the
effect that the proposed transfer may be effected without registration under
the Securities Act and without registration or qualification under applicable
state or other securities laws.  Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
this Warrant in any way contrary to the provisions of this Warrant, or any levy
of execution, attachment or other process attempted upon the Warrant, shall be
void and without effect.

6.             Mergers, Consolidation, Sales.  In the case of any consolidation or merger of
the Company with another entity, lawful and adequate provision shall be made
whereby the Holder of this Warrant shall thereafter have the right to receive
upon the basis and upon the terms and conditions specified herein, in lieu of
the shares of the Common Stock of the Company immediately theretofore
purchasable hereunder, such shares of stock, securities or assets as may (by
virtue of such consolidation, merger, sale, reorganization or reclassification)
be issued or payable with respect to or in exchange for the number of shares of
such Common Stock purchasable hereunder immediately before such consolidation,
merger, sale, reorganization or reclassification.  In any such case appropriate provision shall
be made with respect to the rights and interests of the Holder of this Warrant
to the end that the provisions hereof shall thereafter be applicable as nearly
as may be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of this Warrant.

7.             Fractional Shares.  Notwithstanding anything herein to the
contrary, fractional shares shall not be issued upon the exercise of this
Warrant but in any case where the Holder would, except for the provisions of
this Section 7, be entitled under the terms hereof to receive a fractional
share upon the complete exercise of this Warrant, the Company shall, upon the
exercise of this Warrant for the largest number of whole shares then called
for, pay a sum in cash equal to the excess of the value of such fractional
share (determined in such reasonable manner as may be prescribed in good faith
by the Board) over the Warrant Price for such fractional share.

8.             Notices.  All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively
given (a) when delivered in person or duly sent by fax showing
confirmation of receipt, (b) three days after being duly sent by first
class mail postage prepaid, or (c) two days after being duly sent by
Federal Express or other recognized express overnight courier service: (i) to
the Holder, to the Holder’s address set forth on the signature page hereto, or
at such other address as shall have been furnished to the other parties hereto
in writing, or (ii) if to the Company, to Power Medical Interventions,
Inc., 2021 Cabot Boulevard West, Langhorne, Pennsylvania 19047, Attn: Chief
Financial Officer, or such other address as the Company shall have furnished to
the other parties hereto in writing with a copy to (which shall not constitute
notice) Foley Hoag LLP, Seaport World Trade Center West, 155 Seaport Boulevard,
Boston, Massachusetts 02210, Attn: Jeffrey L. Quillen, Esq.

 

10

 

Notwithstanding
the foregoing, copies of notices of exercise of this Warrant shall not be
required to be sent to Mr. Quillen.

9.             No Rights as Stockholder;
Limitation of Liability.  This
Warrant shall not entitle the Holder to any of the rights of a shareholder of
the Company except upon exercise in accordance with the terms hereof.  No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
mere enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the Holder for the Warrant Price hereunder or as a
shareholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.

10.           Governing Law.  THE VALIDITY, INTERPRETATION, AND ENFORCEMENT
OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.

11.           Headings.  The headings in this Warrant are inserted for
convenience of reference only and shall not affect the interpretation of this
Warrant.  Whenever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and the plural, and pronouns stated in either the
masculine or the neuter gender shall include the masculine, the feminine and
the neuter.

12.           Counterparts; Facsimile Signatures..  This Warrant may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. 
Signatures of the Holder may be transmitted via facsimile and shall be
deemed originals for purposes of this Warrant, however, this Warrant will not
be binding on the Company unless an original signature of an authorized officer
of the Company on the signature page provided with this Warrant has been
attached.  This Warrant also may be
executed by the Holder by delivery of the Omnibus Signature Page, which is
included in the Subscription Documents attached as Exhibit A to that certain
Series D Convertible Preferred Stock Purchase Agreement, dated as of the date
hereof, by and among the Purchasers listed therein (the “Purchase Agreement”),
pursuant to which the undersigned agrees to become a Holder, as defined in this
Warrant, and further agrees to be bound by the terms and conditions of each of
the Purchase Agreement and the Related Agreements (as defined in the Purchase
Agreement).

13.           Amendments.  No provision of this Warrant may be amended
or waived except with the written consent of the Company and the Holder and
their successors and assigns provided, however, that the Holder may waive any
right or benefit hereunder by its written consent.

[Remainder of page intentionally left blank.]

 

11

Exhibit G

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer this __ day of _____, 2006.

	
  Holder: [NAME]

  	
   

  	
  POWER MEDICAL INTERVENTIONS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  [Name]

  	
   

  	
   

  	
  Michael P. Whitman

  
	
   

  	
  [Title]

  	
   

  	
   

  	
  Chief Executive Officer

  

 

 

12

Exhibit G

FORM
OF NOTICE OF EXERCISE

[TO
BE SIGNED ONLY UPON EXERCISE OF THE WARRANT]

TO
BE EXECUTED BY THE REGISTERED HOLDER

TO EXERCISE THE WITHIN WARRANT

The
undersigned hereby exercises the right to purchase _________ shares of Common
Stock which the undersigned is entitled to purchase by the terms of the within
Warrant according to the conditions thereof, and herewith

[check one]

/  /           makes
payment of $__________ therefor; or

/  /           directs
the Company to issue ______ shares, and to withhold ____ shares in lieu of
payment of the Warrant Price, as described in Section 2.1 of the Warrant.

All shares to be issued
pursuant hereto shall be issued in the name of and the initial address of such
person to be entered on the books of the Company shall be:

 

 

 

The shares are to be issued
in certificates of the following denominations:

 

	
  [Type Name of Holder]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						

 

13

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