Document:

ex4-2.htm

Exhibit 4.2

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

WARRANT NO.  CSW-___

 

COMMON STOCK PURCHASE WARRANT

To Purchase _________ Shares of Common Stock of

 

ECHO THERAPEUTICS, INC.

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Platinum-Montaur Life Sciences, LLC (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ___________ (the “Initial Exercise Date”) and on or prior to the close of business on _________, the date that is five (5) years from the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Echo Therapeutics, Inc., a Delaware corporation (the “Company”), up to ____________ shares (the “Warrant Shares”) of Common Stock, par value $0.01 per share, of the Company (the “Common Stock”).  The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b) below.  This is a Draw Warrant referenced in the Loan Agreement dated as of August ___, 2012 by and between the Company and the Holder (the “Loan Agreement”).

 

	
Section 1.

	
Definitions.

 

Capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement. As used herein, the following terms shall have the following meanings:

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Independent Appraiser” means a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Company) that is regularly engaged in the business of appraising the capital stock or assets of corporations or other entities as going concerns, and which is not affiliated with either the Company or the Holder.

 

  

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“Per Share Market Value” means on any particular date (a) the last trading price on any national securities exchange on which the Common Stock is listed, or, if there is no such price, the closing bid price for a share of Common Stock in the over-the-counter market, as reported by the OTC Bulletin Board, the OTCQB, the OTCQX, or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date, or (b) if the Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the average of the “Pink Sheet” quotes for the Common Stock on such date, or (c) if the Common Stock is not then publicly traded, the fair market value of a share of Common Stock on such date as determined by the Company’s board of directors (the “Board”) in good faith; provided, however, that the Holder, after receipt of the determination by the Board, shall have the right to select, jointly with the Company, an Independent Appraiser (as defined below), in which case, the fair market value shall be the determination by such Independent Appraiser; and provided, further that all determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during the period between the date as of which such market value was required to be determined and the date it is finally determined.  The determination of fair market value shall be based upon the fair market value of the Company determined on a going concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties.  In determining the fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to the existence or absence of, or any limitations on, voting rights.

 

“VWAP” means for any date, (i) the daily volume weighted average price of the Common Stock for such date on the Nadsaq Capital Market, a national exchange or the OTC Bulletin Board as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is not then listed or quoted on a trading market for which the daily volume weighted average price of the Common Stock is available on Bloomberg L.P., or if prices for the Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (iii) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.

 

	
Section 2.

	
Exercise.

 

	
(a)  

	
Exercise of Warrant.

 

Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed original or facsimile copy of the Notice of Exercise form annexed hereto (or by delivery to such other office or agency of the Company as the Company may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company). Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within 5 Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  For purposes of this Warrant, the term “Trading Days” means any day during which the market or exchange on which the Company’s common stock is listed or quoted for trading on the date in question shall be open for business or, if the Common Stock is not listed or quoted on any recognized market or exchange, then a business day.

 

  

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(b)  

	
Exercise Price; Cashless Exercise.

 

The exercise price of the Common Stock under this Warrant shall be the lesser of (a) 150% of the VWAP of the Common Stock for five (5) Business Days immediately prior to funding of the Draw in connection with which this warrant is issued (but in no event shall such exercise price be less than $2.00 per share of Common Stock), or (b) $4.00 per share of Common Stock, subject to adjustment hereunder (the “Exercise Price”). Within 5 Trading Days of the date said Notice of Exercise is delivered to the Company, the Holder shall have surrendered this Warrant (if required) to the Company and the Company shall have received  payment of the aggregate Exercise Price of the Warrant Shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank; provided, however, that at any time and from time to time on or after the Initial Exercise Date and on or before the Termination Date and for so long as an effective registration statement under the Securities Act providing for resale of all Warrant Shares is not then in effect, the Holder may exercise this Warrant in whole or in part pursuant to a cashless exercise, in which event the Holder shall receive that number of Warrant Shares computed using the following formula:

 

X = Y - (A)(Y)

  B

	
Where

	
X =

	
the number of Warrant Shares to be issued to the Holder.

	
  

	
Y =

	
the number of Warrant Shares purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised.

	
  

	
A =

	
the Exercise Price.

B =           the Per Share Market Value of one share of Common Stock.

 

	
(c)  

	
Exercise Limitations; Holder’s Restrictions.

 

The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that, after giving effect to the exercise set forth on the applicable Notice of Exercise, such Holder (together with such Holder’s Affiliates, and any other person or entity acting as a group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of  shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) exercise of the remaining, unexercised number of Warrants Shares beneficially owned by such Holder or any of its Affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company owned by such Holder or any of its Affiliates subject to a limitation on conversion or exercise analogous to the limitation contained herein.  Except as set forth in the preceding sentence, for purposes of this Section 2(c), beneficial ownership shall be calculated in accordance with Rule 13d-3 promulgated under the Exchange Act.  To the extent that the limitation contained in this Section 2(c) applies, the determination of whether the Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and of how many Warrant Shares are exercisable shall be in the sole discretion of such Holder, and the submission of a Notice of Exercise shall be deemed to be such Holder’s determination of whether the shares of this Warrant may be exercised (in relation to other securities owned by such Holder together with any Affiliates) and how many shares of the Warrant are exercisable, in each case subject to such aggregate percentage limitations. To ensure compliance with this restriction, each Holder will be deemed to represent to the Company each time it delivers a Notice of Exercise that such Notice of Exercise has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination.  In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant held by the applicable Holder.  The Beneficial Ownership Limitation provisions of this Section 2(c)may be waived by such Holder, at the election of such Holder, upon not less than 61 days’ prior notice to the Company, to change the Beneficial Ownership Limitation to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Warrant held by the applicable Holder, and the provisions of this Section 2(c) shall continue to apply.  Upon such a change by a Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not be further waived by such Holder.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(c) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

  

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(d)  

	
Mechanics of Exercise.

 

	
(i)  

	
Authorization of Warrant Shares.

 

The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid, nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue and liens imposed upon such shares as a result of Honder's actions).

 

	
(ii)  

	
Delivery of Certificates Upon Exercise.

 

Certificates for shares issuable upon the exercise hereof shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and such shares are eligible for legend removal, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within Five (5) Trading Days (the “Warrant Share Delivery Date”) from the delivery to the Company of the Notice of Exercise form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above.  This Warrant shall be deemed to have been exercised on the date the Notice of Exercise is transmitted to the Company.  The shares issuable upon the exercise of the Warrant shall be deemed to have been issued, and the Holder or any other person designated in the Notice of Exercise as the person in whose name the shares issuable upon the exercise of this Warrant shall be issued, shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vii) prior to the issuance of such shares, have been paid.   The Warrant Shares shall be issued without any legend or stop transfer orders provided (i) a registration statement under the Securities Act covering the proposed disposition of such Warrant Shares has become effective under the Securities Act, (ii) the Company has received other evidence reasonably satisfactory to the Company that such registration and qualification under the Securities Act and state securities laws are not required, or (iii) the Holder provides the Company with reasonable documentation confirming the legend can be removed pursuant to applicable provisions of the Securities Act (such as Rule 144).

 

	
(iii)  

	
Delivery of New Warrants Upon Exercise.

 

If this Warrant shall have been exercised in part, and if the Holder shall have surrendered this Warrant together with the Notice of Exercise, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

	
(iv)  

	
Rescission Rights.

 

If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares by the Warrant Share Delivery Date, then the Holder will have the right to unconditionally rescind such exercise and the Company shall within three (3) business days return all monies paid to the Company by the Holder in connection with such rescinded exercise.

 

  

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(v)  

	
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.

 

In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

	
(vi)  

	
No Fractional Shares or Scrip.

 

No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall issue to the Holder one whole share.

 

	
(vii)  

	
Charges, Taxes and Expenses.

 

Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

	
(viii)  

	
Closing of Books; No Impairment.

 

The Company will not close its stockholder books or records or take any other action which in any manner prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

  

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Section 3.

	
Certain Adjustments; Covenants

 

	
(a)  

	
Stock Dividends and Splits.

 

If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock into a larger number of shares, (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant shall be proportionately and equitably adjusted upward.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

	
(b)  

	
Pro Rata Distributions.

 

If the Company, at any time prior to the Termination Date, shall distribute to all holders of Common Stock (and not to Holders of the Warrants) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock, then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the Closing Price determined as of the record date mentioned above, and of which the numerator shall be such Closing Price on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors of the Company in good faith.  In either case the adjustments shall be described in a statement provided by the Company to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.  Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.  At the time of such adjustment, the number of Warrant Shares issuable following such adjustment shall be equitably and proportionally adjusted upward.

 

	
(c)  

	
Adjustment for Reorganization, Consolidation, Merger, etc.

 

In the event that the Company shall 1) effect a reorganization, 2) consolidate with or merge into any other entity or 3) transfer all or substantially all of its properties or assets to any other entity under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition precedent to the consummation of such a transaction, proper and adequate provision shall be made whereby the Holder of this Warrant, on the exercise hereof as provided in Section 2 above, at any time after the consummation of any such reorganization, consolidation or merger or the effective date of any such dissolution, shall receive in lieu of the shares of Common Stock issuable on such exercise immediately prior to any such consummation or effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled to receive upon any such consummation or dissolution if the Holder had so exercised this Warrant immediately prior to such consummation or dissolution.

 

	
(d)  

	
Certificate as to Adjustments.

 

The computation of any adjustments described in this Section 3 shall be the sole responsibility of the Company, which shall expeditiously prepare and mail to the Holder a notice setting forth the nature of any necessary adjustment together with the basis thereof and the calculations therefor.  The Company shall immediately notify the Holder of any information which bears on any of the events referenced in this Section 3 and which may have an effect on the exercise of this Warrant.

 

  

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(e)  

	
Calculations.

 

All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

	
(f)  

	
Voluntary Adjustment By Company.

 

The Company may at any time during the term of this Warrant reduce (but not increase) the then-current Exercise Price, as the case may be, to an amount not less than $__________, the closing bid price of the Common Stock on the Trading Day immediately preceding the Initial Exercise Date (as adjusted for splits, combinations and the like), and for any period of time deemed appropriate by the Board of Directors of the Company.

 

	
(g)  

	
Notice to Allow Exercise by Holder.

 

If (1) the Company shall declare a dividend (or any other distribution) on the Common Stock; or (2) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; or (3) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; or (4) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or (5) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register (defined in Section 4(c)) of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (y) the date on which a survey of the holders of record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (z) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the unintentional failure to mail such notice or any unintentional defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder is entitled to exercise this Warrant during the 20-day period commencing on the date of such notice to the effective date of the event triggering such notice.

 

	
(h)  

	
Covenants.

 

The Company shall cause its Common Stock to continue to be registered under Section 12(b) of the Exchange Act and to comply in all respects with its reporting and filing obligations under the Exchange Act.  The Company shall not take any action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act or Securities Act.  The Company shall use its best efforts to comply with the listing or trading of its Common Stock on the Nasdaq Capital Market. The Company further covenants that it will take such further action as the Holder may reasonably request, all to the extent required from time to time to enable the Holder to sell the shares of Common Stock issuable upon exercise of this Warrant without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act.  The Company shall provide, at the Company’s expense, such legal opinions in the future as are appropriate and necessary for the issuance and resale of the Common Stock issuable upon exercise of this Warrant pursuant to an effective registration statement, Rule 144 under the Securities Act or an exemption from registration.  In the event that such shares of Common Stock issuable upon exercise of this Warrant are sold in a manner that complies with an exemption from registration, the Company shall promptly cause its counsel (at the Company’s expense) to issue to the Holder and the Company’s transfer agent an opinion permitting removal of the legend to permit sales of the shares of Common Stock issuable upon exercise of this Warrant under Rule 144 of the Securities Act. The Company shall timely file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.  The Company shall use its best efforts to cause its Common Stock to be eligible for transfer pursuant to the Depository Trust Company Automated Securities Transfer Program at all times.

 

  

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Section 4.

	
Transfer of Warrant.

 

	
(a)  

	
Transferability.

 

Subject to compliance with any applicable securities laws and the conditions set forth in Section 5(a) and Section 4(d) hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

	
(b)  

	
New Warrants.

 

This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 3(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

 

	
(c)  

	
Warrant Register.

 

The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

	
(d)  

	
Transfer Restrictions.

 

If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, and (ii) that the transferee be an "accredited investor" as defined in Rule 501(a) promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.

 

	
Section 5.

	
Miscellaneous.

 

	
(a)  

	
Title to Warrant.

 

Prior to the Termination Date and subject to compliance with applicable laws and Section 4 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed.  The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company.

 

  

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(b)  

	
No Rights as Shareholder Until Exercise.

 

This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.  Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment.

 

	
(c)  

	
Loss, Theft, Destruction or Mutilation of Warrant.

 

The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares or any portion thereof, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

	
(d)  

	
Saturdays, Sundays, Holidays, etc.

 

If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

 

	
(e)  

	
Authorized Shares.

 

The Company covenants that during the period that any of this Series of Warrants is outstanding, it will reserve from its authorized and unissued Common Stock no less than 110% of the shares of Common Stock issuable upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.

 

Except and to the extent as waived or consented to by the Holder in writing, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Common Stock issuable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price in effect on the date of such action, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

	
(f)  

	
Jurisdiction and Governing Law.

 

All questions concerning the construction, validity, enforcement, governing law and interpretation of this Warrant shall be determined in accordance with the provisions of the Loan Agreement.

 

  

-9-

  

 

	
(g)  

	
Restrictions.

 

The Holder acknowledges that the shares of Common Stock acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

 

	
(h)  

	
Nonwaiver and Expenses.

 

No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.  If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

	
(i)  

	
Notices.

 

Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Loan Agreement.

 

	
(j)  

	
Limitation of Liability.

 

No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase shares of Common Stock issuable upon the exercise of this Warrant, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

	
(k)  

	
Remedies.

 

Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

	
(l)  

	
Successors and Assigns.

 

Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of all Holders of this Warrant from the Initial Exercise Date through the Termination Date, and shall be enforceable by any such Holder or holder of Warrant Shares.

 

	
(m)  

	
Amendment.

 

This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

	
(n)  

	
Severability.

 

Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

	
(o)  

	
Headings.

 

The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

  

-10-

  

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

Dated:  ____________________                                                      

	 	
ECHO THERAPEUTICS, INC.

 

 

	 	
By:  /s/ Christopher Schnittker

Name:  Christopher Schnittker

Title:  Duly Authorized Agent

  

-11-

  

NOTICE OF EXERCISE

TO:           ECHO THERAPEUTICS, INC.

 

The undersigned _______________, pursuant to the provisions of the within Warrant, hereby elects to purchase _____ shares of Common Stock of ECHO THERAPEUTICS, INC. covered by the within Warrant.

Dated: _________________                           Signature                     ___________________________

Address                      _____________________

     _____________________

The undersigned is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended.

 

	
The undersigned intends that payment of the Warrant Price shall be made as (check one):

 

Cash Exercise_______

 

Cashless Exercise_______

 

If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $________ by certified or official bank check (or via wire transfer) to the Company in accordance with the terms of the Warrant.

 

If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder for the number of shares equal to the whole number portion of the product of the calculation set forth below, which is ___________.

 

X = Y - (A)(Y)

 B

	
Where

	
X =

	
the number of Warrant Shares to be issued to the Holder.

	
  

	
Y =

	
the number of Warrant Shares purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised.

	
  

	
A =

	
the Exercise Price.

B =           the Per Share Market Value of one share of Common Stock.

  

-12-

  

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________________________, whose address is

______________________________________________________________________________

_____________________________________________________________________________.

Dated:  ______________, _______

  Holder’s Name:                                     _________________________________________

 

Holder’s Signature:                              _________________________________________

Holder’s Address:                               _________________________________________

_________________________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.ex10-3.htm

Exhibit 10.3

 

Platinum-Montaur Life Sciences, LLC

152 West 57th Street, 4th Floor

New York, NY 10019

 

August 8, 2012

 

Echo Therapeutics, Inc.

8 Penn Center

1628 JFK Blvd, Suite 300

Philadelphia, PA 19013

Attention: Dr. Patrick Mooney

 

Ladies and Gentlemen:

 

 

Platinum-Montaur Life Sciences, LLC (hereinafter called the “Lender”) is pleased to provide this commitment for a term loan facility (the “Term Loan Facility”) to Echo Therapeutics, Inc. (the “Borrower”) on the terms and conditions set forth herein.  This letter is a summary and is not intended to be all inclusive.  Additional provisions that are standard to transactions of this size and type can be expected to be included in the loan and financing documents prepared by the Lender and its counsel for this transaction.

 

	
BORROWER:

	
Echo Therapeutics, Inc.

	
AMOUNT OF TERM LOAN FACILITY:

	
$5,000,000 initially, subject to increase in $3 million increments upon satisfaction of the Increase Conditions to an amount not to exceed to $20,000,000.

	
DRAWS:

	
Each Draw of the Term Loan Facility shall be in a minimum amount of $1,000,000, or in whole multiples of $100,000 in excess thereof.  Amounts repaid may not be reborrowed.

 

The Lender shall have no obligation to fund any Draw upon the issuance by the Borrower of shares of its common stock and/or securities convertible into, exchangeable for, or exercisable for common stock of the Borrower at a price of less than $4 per share (a “Dilutive Issuance”), other than issuances of common stock, options to acquire common stock or similar equity incentive grants and awards to the Borrower’s employees, directors and consultants pursuant to equity incentive plans approved by the shareholders of the Borrower.

	
INTEREST RATE:

	
Ten percent (10%) per annum, compounding monthly.

	
COMMITMENT FEE WARRANT:

	
On closing, the Borrower shall deliver to the Lender a warrant to purchase 4,000,000 shares of the Borrower’s common stock, such warrant to have an exercise price of $2.00 per share and a term of five years (the “Commitment Fee Warrant”).

	
DRAW WARRANT:

	
The delivery by the Borrower to the Lender of a warrant to purchase 1,000,000 shares of the Borrower’s common stock per $1,000,000 of the amount of each Draw (a “Draw Warrant” and together with the Commitment Fee Warrant, the “Warrants”) shall be a condition precedent to the funding of each Draw. Each Draw Warrant shall have a term of five years from the date of the Draw and an exercise price equal to the lesser of: (a) 150% of the market price of the Borrower’s common stock at the time of the applicable Draw (but in no event less than $2.00 per share), or (b) $4.00 per share.

	
WARRANT TERMS:

	
The Warrants shall provide for cashless exercise unless an effective registration statement providing for the registration of all warrant shares is available for resales. The exercise price of the Warrants shall be subject to a full ratchet adjustment in the event of a Dilutive Issuance.  The Borrower shall provide typical indemnification in connection with any sales made via a prospectus.

  

-1-

  

 

	
INCREASE CONDITIONS:

 

	
The maximum principal amount of all Draws (the “Draw Credit Maximum Amount”) shall be increased by $3,000,000 upon the occurrence of each of the following conditions:

 

(1) The initiation of treatment of at least one subject at each institution included in the CE study;

 

(2) Upon the public announcement of a successful study (met the predefined success endpoints in the clinical protocol) suitable for filing for the CE Mark;

 

(3) Upon the completion of at least one test subject at each of the targeted clinical testing venues for the FDA pivotal study;

 

(4) Upon the public announcement of a successful study (meeting the predefined success endpoints in the clinical protocol) suitable for filing for FDA approval; and

 

(5) Upon the receipt of U.S. regulatory clearance to sell the CGM device in US institutions.

	
PURPOSE:

	
To provide working capital to the Borrower for its general corporate purposes.

	
MATURITY DATE OF TERM LOAN FACILITY:

	
Five years from the date of closing.

	
REPAYMENT:

	
(1) Interest.  Interest shall be due and payable monthly on the first business day of each month; provided, however, that no portion of an interest payment shall be due on any interest payment date if, giving effect to such portion of such interest payment, the Borrower would have cash and cash equivalents of less than $5,000,000 (after giving effect to such interest payment) in the aggregate on such interest payment date; and provided, further, that if not previously paid in full, all accrued interest shall be due and payable in full on the maturity date of the Term Loan Facility or upon earlier acceleration.

 

(2) Principal.  Principal shall be due and payable in full on the maturity date or upon earlier acceleration.

 

(3) Mandatory Prepayment.  The Borrower shall, on each interest payment date, pay to Lender an aggregate amount equal to 1/3rd of the total revenue reported by the Borrower during the then immediately prior fiscal quarter (excluding, for the avoidance of doubt, funds received by the Borrower from capital raising activities), such payments to be applied no later than 45 days following the end of such immediately prior fiscal quarter and to be applied to accrued and unpaid interest before being applied to principal (such principal payment to be applied to the Draw or Draws as designated by the Borrower in its discretion); provided, however, that no such portion of such payment shall be due on any payment date if, giving effect to such portion of such payment, the Borrower would have cash and cash equivalents of less than $5,000,000 in the aggregate on such payment date; and provided, further, that if not previously paid in full, all principal of and all accrued interest on all Draws shall be due and payable in full on the Maturity Date of the Term Loan Facility or upon earlier acceleration.

	
PREPAYMENT:

	
The Borrower shall have the option at all times to permanently prepay any Draw, in whole or in part, by providing to Lender two (2) business days’ prior written notice of the effective date and amount of such cancellation or prepayment.

  

-2-

  

	
COLLATERAL:

	
The Term Loan Facility shall be initially be secured by a pledge of the Pledged Revenue of the Borrower and its subsidiaries.  Upon the earlier of an event of default under or the maturity date of the Term Loan Facility, the Term Loan Facility shall be secured by substantially all assets of the Borrower and its subsidiaries, it being understood that such lien shall not attach and be effective until such event of default or maturity.  Such grants of collateral shall be evidenced by one or more security agreements (“Security Agreements”).

 

As used herein, “Pledged Revenue” means (i) all rights of payment of monetary obligations, including rights to payment for goods and general intangibles sold, leased, licensed, assigned or otherwise disposed of; (ii) all rights to payment for services rendered or to be rendered; (iii) all rights under all documents and instruments and all sums of money or other proceeds due or becoming due thereon to the extent the same result from the sale, license or other disposition of the Borrower’s property, products or services, and all rights pertaining to and interest in such documents and instruments; (iv) all other rights and claims to the payment of money, under contracts or otherwise; all rights to payment evidenced by chattel paper or an instrument to the extent the same result from the sale, license or other disposition of the Borrower’s property, products or services; (v) all deposit accounts to the extent that such deposit accounts contain any of the foregoing items; and (vi) all other property constituting accounts (as defined in the UCC).  “Pledged Revenues” shall not include funds received by the Borrower from capital raising activities.

	
COVENANTS:

	
The Loan Documents shall contain customary and typical senior secured indebtedness covenants, including without limitation covenants regarding prohibitions on liens, indebtedness, organic changes, redemptions, affiliate transactions, dividends and investments, together with covenants regarding maintenance of assets, reporting requirements, and listing eligibility.  Further, the Borrower shall covenant to promptly provide, at the Borrower’s sole expense, any and all necessary legal opinions and other documentation as may be reasonably required by the Lender or the Borrower’s transfer agent to effect transactions under Rule 144, and otherwise by the Lender in the common stock to be received upon exercise of the Commitment Fee Warrant and the Draw Warrants.

	
GUARANTY:

	
All subsidiaries of the Borrower shall execute and deliver to the Lender a guaranty of the Borrower’s obligations under the Term Loan Facility (the “Guaranty”).

	
DOCUMENTATION:

	
The closing of the Term Loan Facility is subject to documentation acceptable to the Lender.

	
ASSIGNMENT:

	
Unless an Event of Default shall have occurred, the Lender may not assign all or any part of the Term Loan Facility without the Borrower’s consent; provided, that, the Lender shall have the right to assign all or part of the Term Loan Facility to any affiliate of the Lender without the prior consent of the Borrower; and provided, further, that the Lender shall be free to assign, sell, pledge, or otherwise dispose of the Warrants (and the stock underlying the Warrants) in its discretion.  The Borrower shall not have the right to assign the Term Loan Facility without the Lender’s prior written consent.

	
INDEMNITY:

	
The Borrower shall indemnify, defend and hold the Lender (and the Lender’s members, officers, managers, employees and agents) harmless against any and all losses, liabilities, claims, damages or expenses incurred in connection with  the Term Loan Facility except to the extent same are incurred solely by reason of the gross negligence or willful misconduct of the Lender (or the Lender’s members, officers, managers, employees or agents), including, without limitation, any brokerage commissions or finder’s fees claimed by any broker or other party in connection with the transactions contemplated hereby.

  

-3-

  

	
EXPENSES:

	
Whether or not the transactions contemplated hereby are consummated, the Borrower shall pay all expenses incurred by the Lender in the preparation of this commitment letter, and the negotiation, execution, and delivery of the documents and instruments evidencing the Term Loan Facility (including without limitation a Loan Agreement, a promissory note, the Guaranty, the Security Agreements, an opinion of the Borrower’s counsel, and the Commitment Fee Warrant, collectively the “Loan Documents”), including attorneys’ fees reasonably incurred, subject to the limitation set forth below.

	
CLOSING:

	
Definitive documentation to be executed and delivered by the Borrower and its subsidiaries no later than August 24, 2012, with closing to occur no later than September 24, 2012.

	
CONDITIONS PRECEDENT TO CLOSING:

	
The following are conditions precedent to the closing of the Term Loan Facility:

 

(1) The Borrower shall have provided to the Lender all information reasonably requested by the Lender.

 

(2) The negotiation, execution and delivery of the Loan Documents shall be satisfactory to the Lender, the Borrower and their respective counsel.  All documents required to be delivered in connection with the Term Loan Facility, including customary legal opinions, corporate records and documents from public officials and officers’ certificates, shall have been delivered and shall be in form and substance satisfactory to the Lender and the Lender’s counsel.

 

(3) All representations and warranties of the Borrower and its subsidiaries shall be true, complete and correct.

 

(4) There shall not have occurred any event or conditions that, in the opinion of the Lender , has had or could reasonably be expected to have a material adverse effect on the Borrower and/or any subsidiary of the Borrower (financial or otherwise) or any collateral, since the date of the most recent consolidated financial statements of the Borrower and its subsidiaries last submitted and reviewed by the Lender.

 

(5) All necessary governmental, third party and other approvals required for the transaction contemplated hereby shall have been obtained and be in full force and effect on the closing date and any applicable waiting periods shall have expired without any action being taken or threatened by any applicable authority, which, without limitation, would restrain, prevent or otherwise impose materially adverse conditions on the Borrower or create any material risk to the Lender.

 

(6) There shall not exist any action, suit, investigation or proceeding pending or threatened in any court of before any arbitrator or governmental authority that purports to affect any transaction contemplated hereby or the ability of the Borrower or any other obligor under the loan documentation to perform their respective obligations under such loan documentation.

 

(7) $15,000 in fees, costs and expenses incurred by the Lender in connection with the negotiation, drafting and execution of Term Loan Facility and the Loan Documents (including this letter) shall have been paid by the Borrower.

 

(8) The Borrower shall have provided opinions of counsel, in form and substance satisfactory to the Lender, addressing such matters as the Lender may reasonably request.

 

(9) NASDAQ shall have approved the listing of the common stock underlying the Warrants.

 

  

-4-

  

 

If the terms and conditions of this commitment letter are acceptable to you, please sign and deliver the enclosed copy to the undersigned.  This commitment letter is made to the Borrower and is not assignable or transferable.  Unless the Borrower executes and delivers a copy of this this letter to the Lender on or before August 9, 2012, this letter (other than provisions regarding reimbursement of expenses) shall expire and be of no further force or effect.

 

We look forward to continuing to work with you.  If you have any questions, please call me.

 

[signature page follows]

  

-5-

  

 

Very truly yours,

 

 

PLATINUM-MONTAUR LIFE SCIENCES, LLC

 

By:/s/ Michael M. Goldberg, M.D.

Its Duly Authorized Agent

 

	
The Borrower hereby accepts and agrees to the terms and conditions set forth above:

 

 

ECHO THERAPEUTICS, INC.

 

By: /s/ Patrick T. Mooney

Its Duly Authorized Agent

 

 

By: /s/ Christopher P. Schnittker

Its Duly Authorized Agent

 

Date: August 8, 2012

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