Document:

Exhibit
10.1

 

SUBSCRIPTION AGREEMENT

 

CombiMatrix Corporation

6500 Harbour Heights Pkwy, Suite 303

Mukilteo, WA 98275

 

Gentlemen:

 

The undersigned (the “Investor”)
hereby confirms its agreement with you as follows:

 

1.                                       This
Subscription Agreement (this “Agreement”)
is made as of the date set forth below between CombiMatrix Corporation, a
Delaware corporation (the “Company”),
and the Investor.

 

2.                                       The Company has
authorized the sale and issuance to certain investors of up to an aggregate of
1,100,000 units (the “Units”),
each consisting of (i) one share (each a “Share” and collectively, the “Shares”) of its common stock, par value $0.001 per share (the
“Common Stock”), and (ii) one
callable warrant (the “Warrant Ratio”),
each full callable warrant (“Warrant,”
collectively, the “Warrants”) to
purchase one share of Common Stock for $9.00 per Share, subject to adjustment
as set forth below, for a purchase price of $7.50 per Unit (the “Purchase Price”).  The Shares issuable upon exercise of the
Warrants are referred to herein as “Warrant
Shares” and, together with the Units, the Shares and the Warrants,
are collectively referred to herein as the “Securities.”

 

3.                                       The Company has
filed with the Securities and Exchange Commission (the “Commission”) a registration statement
(Registration No 333-153434) on Form S-3 relating to the Securities being
offered by the Company, including a base prospectus relating to the Securities
being offered by the Company (the “Base
Prospectus”) reflecting the offering of the Shares and the Warrants
by the Company, including all amendments thereto, the exhibits and any
schedules thereto, the documents otherwise deemed to be a part thereof or
included therein by the rules and regulations of the Commission (the “Rules and Regulations”), and any
registration statement relating to the offering contemplated by this Agreement
and filed pursuant to Rule 462(b) under the Rules and
Regulations (collectively, the “Registration
Statement”), in conformity with the Securities Act of 1933, as
amended (the “Securities Act”),
including Rule 424(b) thereunder. 
The Investor hereby confirms that it had full access to the Base
Prospectus, a prospectus supplement to the Base Prospectus (the “Prospectus Supplement”) and the Company’s
periodic reports and other information incorporated by reference therein, and
was fully able to read, review, download and print such materials.

 

4.                                       The Company and
the Investor agree that the Investor will purchase from the Company and the
Company will issue and sell to the Investor the Units set forth below for the
aggregate purchase price set forth below. 
The Units shall be purchased pursuant to the Terms and Conditions for
Purchase of Units attached hereto as Annex I and incorporated herein by this
reference as if fully set forth herein. 
The Investor acknowledges that the Offering is not being underwritten by
the placement agent (the “Placement Agent”)
named in the Base Prospectus and that there is no minimum offering amount.

 

5.                                       The manner of
settlement of the Shares included in the Units purchased by the Investor shall
be determined by such Investor as follows:

 

Delivery by electronic book-entry at The Depository Trust Company (“DTC”), registered in the Investor’s name and address as set
forth below, and released by Mellon Investor Services LLC, the Company’s
transfer agent (the “Transfer Agent”)
(attention: Tom Cooper (206) 674-3031), to the Investor at the Closing (as
defined in Section 3.1 of Annex A hereto). 
NO LATER THAN TWO (2) BUSINESS DAYS AFTER THE
EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

 

 

(I)                                   DIRECT THE BROKER-DEALER AT WHICH
THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP
A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER AGENT TO
CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND

 

(II)                               REMIT
BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR
THE UNITS BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

 

	
  Bank:

  	
   

  	
  Wells Fargo Bank

  
	
  Account Name:

  	
   

  	
  CombiMatrix
  Corporation

  
	
  ABA:

  	
   

  	
  121000248

  
	
  Account
  #:

  	
   

  	
  4433713575

  
	
  F/B/O:

  	
   

  	
  [Name of Investor]

  

 

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE
TRANSFER OR CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE
FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT DELIVER THE
AGGREGATE PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR
SETTLEMENT IN A TIMELY MANNER, THE UNITS MAY NOT BE DELIVERED AT CLOSING
TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.

 

6.                                       The executed
Warrant shall be delivered in accordance with the terms set forth in Annex I
hereto.

 

7.                                       The Investor
represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) it is
not a NASD member or an Associated Person (as such term is defined under the
FINRA Membership and Registration Rules Section 1011) as of the
Closing, and (c) neither the Investor nor any group of Investors (as
identified in a public filing made with the Commission) of which the Investor
is a part in connection with the Offering of the Units, acquired, or obtained
the right to acquire, 20% or more of the Common Stock (or securities
convertible into or exercisable for Common Stock) or the voting power of the
Company on a post-transaction basis.  Exceptions:  (If no exceptions, write “none.”  If left blank, response will be deemed to be
“none.”)     NONE.

 

8.                                       The Investor
represents that it has received or can obtain on the SEC’s EDGAR and/or IDEA
filing system the Base Prospectus, which is part of the Company’s Registration
Statement, the documents incorporated by reference therein, the Prospectus
Supplement and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in
connection with the receipt of this Agreement along with the Company’s
counterpart to this Agreement.

 

9.                                       No offer by the
Investor to buy Units will be accepted and no part of the Purchase Price will
be delivered to the Company until the Company has accepted such offer by
countersigning a copy of this Agreement, and any such offer may be withdrawn or
revoked, without obligation or commitment of any kind, at any time prior to the
Company (or a Placement Agent on behalf of the Company) sending (in writing,
facsimile or by electronic mail) notice of its acceptance of such offer.  An indication of interest will involve no
obligation or commitment of any kind until this Agreement is accepted and
countersigned by or on behalf of the Company.

 

2

 

Number of Units:                           

 

Purchase Price Per Unit: $                           

 

Aggregate Purchase Price: $                           

 

CombiMatrix Signature Page

 

Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.

 

	
  Name of Investor (if
  individual):

   

   

  Signed:

   

  Print Name:

  	
   

  	
  Name of Investor (if entity):

   

   

  Signed:

   

  Print Name:

   

  Title:

   

  Contact Name:

  

 

The
exact name that your Shares and Warrants are to be registered in.  You may use a nominee name if appropriate:
                                                                                                                

 

Mailing
address:                                                                                                                                                    

 

Tax
ID/SSN:                                           

 

Telephone:                                              

 

Fax:                                                         

 

Email:                                                      

 

Name
of DTC Participant (broker/dealer at which the account or accounts to be
credited with the Shares are maintained); please include the name and telephone
number of the contact person at the broker dealer:
                                                                                                                                      

 

Name of Account at DTC Participant being
credited with the Shares:                                                         

 

Account Number at DTC Participant being
credited with the Shares:                                           

 

Broker’s DTC participant number:                                   

 

AGREED AND ACCEPTED AS OF APRIL
            , 2009:

 

COMBIMATRIX CORPORATION, a Delaware corporation

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

3

 

ANNEX I

 

TERMS
AND CONDITIONS FOR PURCHASE OF UNITS

 

1.                                       Authorization
and Sale of the Units; Defined Terms.

 

1.1                                 Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
the Units.

 

1.2                                 Capitalized
terms used herein but not otherwise defined have the meanings ascribed to them
in the Agreement.

 

2.                                       Agreement
to Sell and Purchase the Units; Placement Agent.

 

2.1                                 At the Closing
(as defined in Section 3.1), the Company will sell to the Investor, and the
Investor will purchase from the Company, upon the terms and conditions set
forth herein, the number of Units set forth on the last page of the
Agreement to which these Terms and Conditions for Purchase of Units are
attached as Annex I (the “Signature Page”)
for the aggregate purchase price therefor set forth on the Signature Page.

 

2.2                                 The Company
proposes to enter into substantially this same form of Subscription Agreement
with certain other investors (the “Other
Investors”) and expects to complete sales of Units to them.  The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the
Subscription Agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the “Agreements.”

 

2.3                                 Investor
acknowledges that the Company intends to pay the Placement Agent a fee (the “Placement Fee”) in respect of the sale of
Units to the Investor, and that the Placement Agent may in its discretion use
sub-placement agents in this transaction.

 

2.4                                 The Company has
entered into a Placement Agency Agreement, dated April 27, 2009 (the “Placement Agreement”), with the Placement
Agent that contains certain representations, warranties, covenants, and
agreements of the Company that may be relied upon by the Investor, which shall
be a third party beneficiary thereof.  A
copy of the Placement Agreement is available upon request and will be publicly
available as an exhibit to the Registration Statement.

 

2.5                                 Delivery
of Shares Upon Exercise of Warrants; Buy-In. 
Upon exercise of the Warrants, Warrant Shares purchased under a Warrant
shall be transmitted by the Transfer Agent to the holder thereof (a “Holder”) by crediting the account of the
Holder’s prime broker with the Depository Trust Company through its Deposits
and Withdrawal at Custodian (DWAC) system if the Company is a participant in
such system, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise (as defined in the Warrant) within five
business days from the delivery to the Transfer Agent of the Notice of
Exercise, surrender of the Warrant and payment of the aggregate exercise price
thereof.  If by the close of the seventh
trading day after delivery of a Notice of Exercise, the Transfer Agent fails to
deliver to the Holder a certificate representing the required number of Warrant
Shares in the manner required above (or make such Warrant Shares available to
such Holder’s Broker), and such failure to deliver the Warrant Shares is caused
by the Transfer Agent’s failure to use commercially reasonable efforts to
comply with this Section 2.5 and/or the Company’s failure to use
commercially reasonable efforts to comply with the covenants in Section 5
of the Warrant, and if after such seventh trading day and prior to the receipt
of such Warrant Shares, the Holder purchases (in an 

 

 

open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall, within seven trading days after the Holder’s request
and in the Holder’s sole discretion, either (1) pay in cash to the Holder
an amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate through the Transfer Agent
(and to issue such Warrant Shares) shall terminate or (ii) promptly honor
its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (a) such
number of Warrant Shares, times (b) the closing bid price on the date of
the event giving rise to the Company’s obligation to deliver such certificate.

 

2.6                                 Listing of Warrants. 
As soon as practicable after the first Closing (defined below), the
Company will use its reasonable best efforts to obtain listing or quotation of
the Warrants on the NASDAQ Stock Market, and to register the Warrants under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

3.                                       Closings
and Delivery of the Units and Funds.

 

3.1                                 Closing.  The completion of the
purchase and sale of the Units (the “Closings”)
shall occur at one or more places and times (the “Closing Dates”) to be specified by the Company and the
Placement Agent, and of which the Investors will be notified in advance by the
Placement Agent, in accordance with Rule 15c6-1 promulgated under the
Exchange Act.  At each Closing, (a) the
Company shall cause the Transfer Agent to deliver to the Investor the number of
Shares set forth on the Signature Page registered in the name of the
Investor or, if so indicated on the signature page to the Subscription
Agreement, in the name of a nominee designated by the Investor and as
contemplated by procedures set forth in the Agreement and the Placement
Agreement, (b) the Company shall cause to be delivered to the Investor a
Warrant to purchase a number of whole Warrant Shares determined by multiplying
the number of Shares set forth on the signature page by the Warrant Ratio
and rounding down to the nearest whole number and (c) the aggregate
purchase price for the Units being purchased by the Investor will be delivered
to the Company.

 

3.2                                 (a)                                  Conditions
to the Company’s Obligations.  The Company’s
obligation to issue and sell the Units to the Investor shall be subject to: (i) the
receipt by the Company of the purchase price for the Units being purchased
hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.

 

(b)                                 Conditions
to the Investor’s Obligations.  The Investor’s
obligation to purchase the Units will be subject to the accuracy of the
representations and warranties made by the Company contained in the Placement
Agreement and the fulfillment of those undertakings of the Company to be
fulfilled prior to the Closing Date, and to the condition that the Placement
Agent shall not have determined that the conditions to the closing in the
Placement Agreement have not been satisfied. 
The Investor’s obligations are expressly not conditioned on the purchase
by any or all of the Other Investors of the Units that they have agreed to
purchase from the Company or the issuance of any minimum amount of Units by the
Company.

 

3.3                                 Delivery
of Funds.  No later than two (2) business days after the execution of this
Agreement by the Investor and the Company, the Investor shall remit by wire transfer the amount 

 

 

of
funds equal to the aggregate purchase price for the Units being purchased by
the Investor to the following account:

 

	
  Bank:

  	
   

  	
  Wells Fargo Bank

  
	
  Account Name:

  	
   

  	
  CombiMatrix
  Corporation

  
	
  ABA:

  	
   

  	
  121000248

  
	
  Account
  #:

  	
   

  	
  4433713575

  
	
  F/B/O:

  	
   

  	
  [Name of Investor]

  

 

3.4                                 Delivery
of Shares by Electronic Book-Entry at The Depository Trust Company.  No later
than two (2) business days after the execution of this Agreement by the
Investor and the Company, the Investor shall direct
the broker-dealer at which the account or accounts to be credited with the
Shares being purchased by such Investor are maintained, which broker/dealer
shall be a DTC participant, to set up a Deposit/Withdrawal at Custodian (“DWAC”) instructing Mellon Investor Services
LLC, the Company’s transfer agent, to credit such account or accounts with the
Shares by means of an electronic book-entry delivery.  Such DWAC shall indicate the settlement date
for the deposit of the Shares, which date shall be provided to the Investor by
the Placement Agents.  Simultaneously
with the delivery to the Company by the Investor of the funds pursuant to Section 3.3
above, the Company shall direct its transfer agent to credit the Investor’s
account or accounts with the Shares pursuant to the information contained in
the DWAC.

 

4.                                       Representations,
Warranties and Covenants of the Investor.

 

4.1                                 The Investor
represents and warrants to, and covenants with, the Company that (a) the
Investor has answered all questions on the Signature Page and the Investor
Questionnaire for use in preparation of the Prospectus Supplement and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date and (b) the Investor, in connection with
its decision to purchase the number of Units set forth on the Signature Page,
is relying only upon the Disclosure Package and the representations and
warranties of the Company contained herein and the Placement Agreement.

 

4.2                                 The Investor
acknowledges, represents and agrees that no action has been or will be taken in
any jurisdiction outside the United States by the Company or the Placement
Agent that would permit an offering of the Units, or possession or distribution
of offering materials in connection with the issue of the Units in any
jurisdiction outside the United States where action for that purpose is
required.  Each Investor outside the
United States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers Units or
has in its possession or distributes any offering material, in all cases at its
own expense.  The Placement Agent is not
authorized to make and have not made any representation or use of any
information in connection with the issue, placement, purchase and sale of the
Units, except as set forth or incorporated by reference in the Disclosure Package.

 

4.3                                 The Investor
further represents and warrants to, and covenants with, the Company that (a) the
Investor has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (b) this Agreement constitutes a valid and binding
obligation of the Investor enforceable against the Investor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a 

 

 

proceeding
in equity or at law) and except as the indemnification agreements of the
Investors herein may be legally unenforceable.

 

4.4                                 The Investor
understands that nothing in this Agreement, the Prospectus or any other
materials presented to the Investor in connection with the purchase and sale of
the Units constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Units.

 

4.5                                 Each Investor
represents, warrants and agrees that, since the earlier to occur of (i) the
date on which a Placement Agent first contacted such Investor about the
Offering and (ii) the date of this Agreement, it has not engaged in any
transactions in the securities of the Company (including, without limitation,
any Short Sales involving the Company’s securities).  Each Investor covenants that it will not
engage in any transactions in the securities of the Company (including Short
Sales) prior to the time that the transactions contemplated by this Agreement
have been consummated and are publicly disclosed.  Each Investor agrees that it will not use any
of the Units acquired pursuant to this Agreement to cover any short position in
the Common Stock if doing so would be in violation of applicable securities
laws.  For purposes hereof, “Short Sales”
include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against
the box, and all types of direct and indirect stock pledges, forward sales
contracts, options, puts, calls, short sales, swaps, “put equivalent positions”
(as defined in Rule 16a-1(h) under the Exchange Act) and similar
arrangements (including on a total return basis), and sales and other
transactions through non-US broker dealers or foreign regulated brokers.

 

4.6                                 Each Investor
acknowledges and agrees that Investor, either alone or with a group of
affiliated entities, will not, as the result of purchasing Shares or Warrant
Shares, acquire 20% or more of the outstanding Common Stock or the voting power
of the Company on a post-transaction basis.

 

4.7                                 Each Investor
acknowledges and agrees that each Warrant, which shall be exercisable for five
years after the Closing Date at which the Warrant is first delivered to the
Investor by the Company, may not be exercised before the day that is six months
after such Closing Date.

 

5.                                       Survival
of Representations, Warranties and Agreements; Third Party Beneficiary.  Notwithstanding any
investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein will survive the execution of this Agreement, the
delivery to the Investor of the Units being purchased and the payment
therefor.  The Placement Agent and The
Benchmark Company, LLC, as sub-placement agent to the Placement Agent, shall
each be a third party beneficiary with respect to representations, warranties
and agreements of the Investor in Section 4 hereof.

 

6.                                       Notices.  All notices, requests,
consents and other communications hereunder will be in writing, will be mailed (a) if
within the domestic United States by first-class registered or certified
airmail, or nationally recognized overnight express courier, postage prepaid,
or by facsimile or (b) if delivered from outside the United States, by
International Federal Express or facsimile, and will be deemed given (i) if
delivered by first-class registered or certified mail domestic, three business
days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:

 

(a)                                  if to the
Company, to:

 

CombiMatrix
Corporation

 

 

6500
Harbour Heights Pkwy, Suite 303

Mukilteo, WA 98275

Attention: President

 

with copies to:

 

Holland & Knight
LLP

111 SW Fifth Avenue, Suite 2300

Portland, OR 97204

Attention: Mark A. von
Bergen and David C. Wang

 

(b)                                 if to the
Investor, at its address on the Signature Page hereto, or at such other
address or addresses as may have been furnished to the Company in writing.

 

7.                                       Changes.  This Agreement may not be
modified or amended except pursuant to an instrument in writing signed by the
Company and the Investor.

 

8.                                       Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and will not be
deemed to be part of this Agreement.

 

9.                                       Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.

 

10.                                 Governing
Law.  This Agreement will be governed
by, and construed in accordance with, the internal laws of the State of
Delaware, without giving effect to the principles of conflicts of law that
would require the application of the laws of any other jurisdiction.

 

11.                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.

 

12.                                 Confirmation
of Sale.  The Investor
acknowledges and agrees that such Investor’s receipt of the Company’s
counterpart to this Agreement, together with the Prospectus and the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission), shall constitute written confirmation of the Company’s sale of
Units to such Investor.

 

13.                                 Termination.  In the event that the Company decides to
terminate Offering prior to Closing, this Agreement shall terminate without any
further action on the part of the parties hereto and any monies remitted to the
Company will be promptly refunded by the Company, without interest, to the
Investor.Exhibit 10.2

 

WARRANT NO. [          ]

CUSIP 20009T 113

 

COMBIMATRIX CORPORATION

 

WARRANT TO PURCHASE COMMON STOCK

 

Void
After April [   ], 2014

 

THIS CERTIFIES THAT, for value received, [          ] or
permitted registered assigns (the “Holder”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from CombiMatrix Corporation, a Delaware corporation (the “Company”), up to [         
] of the Company’s common stock, par value $0.001 per share
(the “Common Stock”).

 

1.  DEFINITIONS. As used herein,
the following terms shall have the following respective meanings:

 

(a)  “Exercise Period”
shall mean the period commencing six months after the Issuance Date and ending
at 5:00 p.m. Eastern Time on the fifth (5th) anniversary of the Issuance Date (the “Expiration Date”), unless sooner terminated as provided below.

 

(b)  “Exercise Price”
shall mean $9.00 per
share, subject to adjustment pursuant to Section 6 below.

 

(c) 
“Issuance Date” shall mean April [     ], 2009

 

(d)  “Warrant Shares”
shall mean the shares of Common Stock issuable upon exercise of this Warrant.

 

(e) 
“Subscription  Agreement” means the Subscription Agreement dated
as of April [   ], 2009 by and
between the Company and the initial Holder of this Warrant.

 

(f) 
“Trading Day” shall mean any business day on which the Common Stock is
listed or quoted and traded on The NASDAQ Stock Market or the stock exchange on
which the Common Stock primarily trades.

 

2.  EXERCISE OF WARRANT

 

2.1.  Notice of Exercise;
Exercise Price; Certificates.  The rights
represented by this Warrant may be exercised in whole or in part at any time
during the Exercise Period, by delivery of the following to the Company at its
address set forth on the signature page hereto (or at such other address
as it may designate by notice in writing to the Holder):

 

(a)  An executed Notice of
Exercise in the form attached hereto;

 

(b)  Payment of the Exercise
Price either (i) in cash or by check or (ii) by cancellation of
indebtedness; and

 

(c)  This Warrant.

 

 

The
Holder shall not be required to deliver the original Warrant in order to effect
the exercise hereunder. Execution and delivery of the Notice of Exercise and
payment of the Exercise Price shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Warrant Shares, if any.

 

Certificates
for Warrant Shares purchased hereunder shall be transmitted by the transfer
agent of the Company to the Holder by crediting the account of the Holder’s
prime broker with the Depository Trust Company through its Deposits and
Withdrawal at Custodian (DWAC) system if the Company is a participant in such
system, or otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within five business days from the delivery to
the Company of the Notice of Exercise, surrender of this Warrant and payment of
the aggregate Exercise Price as set forth above. If by the close of the
seventh Trading Day after delivery of a Notice of Exercise and payment of the
Exercise Price, the Transfer Agent fails to deliver to the Holder a certificate
representing the required number of Warrant Shares in the manner required above
(or make such Warrant Shares available to such Holder’s broker), and such
failure to deliver the Warrant Shares is caused by the transfer agent’s failure
to use commercially reasonable efforts to comply with this Section 2.1 of
the Subscription Agreement and/or the Company’s failure to use commercially
reasonable efforts to comply with the covenants in Section 3 of this
Warrant, and if after such seventh Trading Day and prior to the receipt of such
Warrant Shares, the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the Company shall, within seven Trading Days
after the Holder’s request and in the Holder’s sole discretion, either (1) pay
in cash to the Holder an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such certificate through the transfer agent (and to issue such
Warrant Shares) shall terminate or (2) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Warrant
Shares and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (a) such number of Warrant Shares,
times (b) the closing bid price on the date of the event giving rise to
the Company’s obligation to deliver such certificate.

 

2.2.  Call Feature. The Company may
call this Warrant by giving not less than five calendar days prior notice at
any time after the date on which (1) the reported high trading price of
the Common Stock on the principal exchange or trading facility on which it is
traded has equaled or exceeded two hundred fifty percent (250%) of the Exercise
Price on any 20 Trading Days during a period of 30 consecutive Trading Days;
and (2) the reported trading volume on each of the aforementioned 30
Trading Days is at least 50,000 shares. Any portion of this Warrant not
exercised by 5:00 p.m. Eastern Time on the fifth calendar day of such call
notice period (the “Effective Call Date”) will expire at such time and
date. After the Effective Call Date, this Warrant shall no longer be
exercisable, and all rights of the Holder with respect to this Warrant shall
terminate.

 

2.3.   Partial Exercise.  Upon
any partial exercise of this Warrant, the Company, at its expense, will
forthwith and, in any event within five business days, issue and deliver to the
Holder a new warrant or warrants of like tenor, registered in the name of the
Holder, exercisable, in the aggregate, for the balance of the number of shares
of Warrant Shares remaining available for purchase under the Warrant.

 

2.4.  Payment of Taxes and
Expenses.  The Company shall pay any recording, filing,
stamp or similar tax which may be payable in respect of any transfer involved
in the issuance of, and the 

 

 

preparation and delivery of certificates (if
applicable) representing, (i) any Warrant Shares purchased upon exercise
of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.

 

2.5  Limitation on Exercise.  Notwithstanding anything in this Warrant to
the contrary, this Warrant may not be exercised to the extent that such
exercise would result in the beneficial ownership by Holder, together with its
affiliates and its related persons, of 
20% or more of the outstanding Common Stock or the voting power of the
Company on a post-transaction basis.

 

3.  COVENANTS OF THE COMPANY

 

3.1.  Covenants as to Warrant
Shares.  The Company covenants and agrees that all
Warrant Shares that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance in accordance with the terms hereof, be
validly issued and outstanding, fully paid and nonassessable, and free from all
taxes, liens and charges with respect to the issuance thereof.  The
Company further covenants and agrees that the Company will, at all times during
the Exercise Period, have authorized and reserved, free from preemptive rights,
a sufficient number of shares of Common Stock to provide for the exercise of
the rights represented by this Warrant.  If at any time during the
Exercise Period the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes.

 

3.2.  No Impairment.  Except
and to the extent as waived or consented to by the Holder, the Company will
not, by amendment of 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 to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all
such action as may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.

 

4.  ADJUSTMENT OF EXERCISE PRICE AND SHARES.

 

4.1  In the event of
changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or
exchanges of shares, separations, reorganizations, liquidations, consolidation,
acquisition of the Company (whether through merger or acquisition of
substantially all the assets or stock of the Company), or the like, the number,
class and type of shares available under the Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and type of shares or other property as the Holder would have owned had
the Warrant been exercised prior to the event and had the Holder continued to
hold such shares until the event requiring adjustment.  The form of this
Warrant need not be changed because of any adjustment in the number of Warrant
Shares subject to this Warrant.

 

4.2  If at any time
or from time to time the holders of Common Stock of the Company (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive on a pro rata basis,
without payment therefor,

 

(i)  Common Stock or any shares
of stock or other securities which are at any time directly or indirectly
convertible into or exchangeable for Common Stock, or any rights or 

 

 

options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution (other than a dividend or distribution covered
in Section 4.1 above),

 

(ii)  any cash paid or payable
otherwise than as a cash dividend; or

 

(iii)  Common Stock or additional
stock or other securities or property (including cash) by way of spinoff,
split-up, reclassification, combination of shares or similar corporate
rearrangement (other than shares of Common Stock pursuant to Section 4(a) above),
then and in each such case, the Holder hereof will, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property which such
Holder would hold on the date of such exercise had such Holder been the holder
of record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other additional
stock and other securities and property.

 

4.3  Upon the
occurrence of each adjustment pursuant to Section 4.1 or 4.2, the Company
at its expense will, at the written request of the Holder, promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the
facts upon which such adjustment is based. Upon written request, the Company
will promptly deliver a copy of each such certificate to the Holder and to the
Company’s transfer agent.

 

5.  FRACTIONAL SHARES.  No fractional
shares shall be issued upon the exercise of this Warrant. All Warrant Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated
for purposes of determining whether the exercise would result in the issuance of
any fractional share. If, after aggregation, the exercise would result in
the issuance of a fractional share, the Company may in its discretion and in
lieu of issuance of any fractional share, pay the Holder otherwise entitled to
such fraction a sum in cash equal to the product resulting from multiplying the
then current fair market value of a Warrant Share by such fraction.

 

6.  FUNDAMENTAL TRANSACTIONS.  If, at
any time while this Warrant is outstanding, (i) the Company effects any
merger of the Company with or into another entity, (ii) the Company
effects any sale of all or substantially all of its assets in one or a series
of related transactions, (iii) any tender offer or exchange offer (whether
by the Company or another individual or entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 4 above) (in any
such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the Holder, the
number of shares of Common Stock of the successor or acquiring corporation or
of the Company, if it is the surviving corporation, and any additional
consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for 

 

 

which
this Warrant is exercisable immediately prior to such event.  For purposes of
any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction.  To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with
the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section 6
and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

 

7.  NO STOCKHOLDER RIGHTS.  This Warrant in
and of itself shall not entitle the Holder to any voting rights or other rights
as a stockholder of the Company.

 

8.  TRANSFER OF WARRANT.  Subject to
applicable laws, this Warrant and all rights hereunder are transferable, by the
Holder in person or by duly authorized attorney, upon delivery of this Warrant
and, if the Warrants are not traded publicly on a securities exchange or over
the counter, the form of assignment attached hereto to any transferee
designated by Holder.

 

9.  LOST, STOLEN, MUTILATED OR DESTROYED
WARRANT.  If this Warrant is lost, stolen, mutilated or
destroyed, the Company may, on such terms as to indemnity or otherwise as it
may reasonably impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination and tenor as
the Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant
shall constitute an original contractual obligation of the Company, whether or
not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any
time enforceable by anyone.

 

10.
NOTICES, ETC.  All notices, requests, consents and other
communications hereunder will be in writing, will be mailed (a) if within
the domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by
International Federal Express or facsimile, and will be deemed given (i) if
delivered by first-class registered or certified mail domestic, three business
days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:

 

If to the Company, to:

 

CombiMatrix Corp.

6500 Harbour Heights Pkwy, Suite 303

Mukilteo,
WA 98275

Attention:
President

 

with
copies to:

 

 

Holland &
Knight LLP

111
SW Fifth Avenue, Suite 2300

Portland,
OR 97204

Attn:
Mark A. von Bergen and David C. Wang

 

If to the Investor:

 

At its address specified by the initial Holder in the Subscription
Agreement, or at such other address or addresses as may have been furnished to
the Company in writing by Holder.

 

11.  ACCEPTANCE.  Receipt of this
Warrant by the Holder shall constitute acceptance of and agreement to all of
the terms and conditions contained herein.

 

12.  GOVERNING LAW.  This Warrant will be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without giving effect to the principles of conflicts of law that would require
the application of the laws of any other jurisdiction.

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer as of April [     ], 2009.

 

COMBIMATRIX
CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

NOTICE OF EXERCISE

 

TO: 
COMBIMATRIX CORPORATION

 

The undersigned
hereby elects to purchase
                                        
shares of Common Stock (the “Common
Stock”) of COMBIMATRIX
CORPORATION  (the “Company”) pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full.

 

Please
issue a certificate representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below:

 

 

(Name)

 

 

(Address)

 

 

	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

 

COMBIMATRIX CORPORATION

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required
information.

Do not use this form to purchase shares.  Assignment of the Warrant is subject to
applicable law.)

 

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

 

NAME
(please print):

 

 

ADDRESS
(please print):

 

 

Assigned
by:

 

 

	
  Signed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

NOTE:  The
assignor on this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever.  Officers of corporations and those acting in a fiduciary
or other representative capacity should provide proper evidence of authority to
assign the foregoing Warrant.

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