Exhibit 10.2
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THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
Commonwealth Biotechnologies, Inc.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
April 19, 2002
Void After April 19, 2005
THIS CERTIFIES THAT, for value received, Segerdahl & Company, Inc. with
its principal office at 000 X. Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000, or assigns (the "Holder"), is entitled to subscribe for and purchase at
the Exercise Price (defined below) from COMMONWEALTH BIOTECHNOLOGIES, INC., a
Virginia corporation, with its principal office at 000 Xxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000 (the "Corporation") One Hundred Thousand (100,000) shares of the
common stock of the Corporation (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 with the date
hereof and ending three (3) years from the date hereof, unless sooner terminated
as provided below.
(b) "Exercise Price" shall mean Two Dollars ($2.00) per share,
subject to adjustment pursuant to Section 3 below.
(c) "Exercise Shares" shall mean the shares of the Corporation's
Common Stock issuable upon exercise of this Warrant.
(d) "Transaction" shall mean an equity capital financing or
recapitalization of the Corporation, as contemplated by that certain engagement
letter, dated April 19, 2002, by and between the Company and Segerdahl &
Company, Inc. (the "Engagement Letter").
2. VESTING OF WARRANT. This Warrant shall vest and become exercisable
upon the satisfaction of each condition noted below:
(a) A trade of at least one share of the Corporation's Common Stock
shall be executed at a price equal to or greater than $6.00 for 10 of 20
consecutive trading days during the Exercise Period; and
(b) The Corporation completes a Transaction; provided, however, that
for the purposes of this Warrant, (i) the acquisition by the Corporation of
certain intellectual property contemplated by the Engagement Letter and (ii) the
completion of a short-term financing of up to $1,000,000 arranged by Segerdahl &
Company, Inc. shall not constitute a Transaction.
3. EXERCISE OF WARRANT. Upon vesting in accordance with Section 2
hereof, 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
Corporation at its address set forth above (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,
(ii) by cancellation of indebtedness, or (iii) pursuant to the net exercise
provisions in Section 3.1 hereof; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so exercised. The
person in whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become the
Holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the Holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
3.1. Net Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Corporation's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant by payment of cash, the Holder
may elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant at
the principal office of the Corporation together with the properly endorsed
Notice of Exercise in which event the Corporation shall issue to the Holder a
number of shares of Common Stock computed using the following formula:
X = Y (A-B)
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A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being canceled (at the date of such
calculation)
A = the fair market value of one share of the
Corporation's Common Stock (at the date of such
calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, the fair market value of one
share of Common Stock shall mean, as of any date, (a) if the Common Stock is
listed on a national securities exchange, the closing or opening price as
reported for composite transactions for such date, (b) if the Common Stock is
not so listed but is traded on the NASDAQ National Market or SmallCap Market,
the closing or opening price as reported on the NASDAQ National Market or
SmallCap Market on such date or, if no sale occurred on a trading day, then the
mean between the highest bid and the lowest asked prices as of the close of
business on such trading day, as reported on the NASDAQ National Market or
SmallCap Market, (c) if the Common Stock is not traded on a national securities
exchange or the NASDAQ National Market or SmallCap Market, but is otherwise
traded over-the-counter, the arithmetic average of the highest bid and lowest
asked prices on such date as quoted on the National Association of Securities
Dealers Automated Quotation System or an equivalent generally accepted reporting
service, (d) if the Corporation completes a transaction in which it ceases to be
a publicly-traded company, the highest price paid to the Corporation's
stockholders (on a per share basis) for their Common Stock or (e) if none of the
above apply, a determination made in good faith by the Corporation's Board of
Directors.
4. ADJUSTMENT TO EXERCISE PRICE AND NUMBER OF SHARES OF COMMON STOCK.
The Exercise Price and the number of shares of Common Stock underlying the
Warrant shall be subject to adjustment from time to time as hereinafter set
forth:
4.1. Stock Dividends - Split-Ups. If after the date hereof, the
number of outstanding shares of Common Stock is increased by a stock dividend
payable in shares of Common Stock or by a sub-division or a split-up of shares
of Common Stock or other similar event, then, on the effective day thereof, the
number of shares of Common Stock issuable on exercise of the Warrant shall be
increased in proportion to such increase in outstanding shares.
4.2. Aggregation of Shares. If after the date hereof, the number of
outstanding shares of Common Stock is decreased by a consolidation, combination
or reclassification of shares of Common Stock or other similar event, then, on
the effective date thereof, the number of shares of Common Stock issuable on
exercise of the Warrant shall be decreased in proportion to such decrease in
outstanding shares.
4.3. Adjustments in Exercise Price. Whenever the number of the
shares of Common Stock issuable upon the exercise of this Warrant is adjusted,
as provided in this Section 4, the Exercise Price shall be adjusted (to the
nearest cent) by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of the
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment and (y) the denominator of which shall be the number of
the shares of Common Stock so purchasable immediately thereafter.
4.4. Other Dividends and Distributions. If after the date hereof the
Corporation pays a dividend or makes another distribution to the holders of
Common Stock payable in property other than cash or shares of Common Stock, then
in each such event provision shall be made so that the registered Holder of this
Warrant shall receive, upon exercise hereof, in addition to the number of shares
of Common Stock purchasable upon exercise hereof, the amount of such property
which the registered Holder would have received had this Warrant been exercised
immediately prior to such dividend or distribution and had the registered Holder
hereof thereafter, during the period from the date of such event to and
including the exercise date, retained such property receivable by the registered
Holder as aforesaid during such period, subject to all other adjustments called
for during such period under this Section 4 with respect to the rights of the
registered Holder of the Warrant or with respect to such other property by their
terms.
4.5. Reorganizations, etc. If after the date hereof, any capital
reorganization or reclassification of the Common Stock of the Corporation, or
consolidation or merger of the Corporation with another corporation, or the sale
of all or substantially all of its assets to another corporation or other
similar event shall be effected then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, (x) lawful, fair and adequate
provision shall be made whereby the registered Holder of the Warrant shall
thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in the Warrant and in lieu of the Common Stock of
the Corporation immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities, or
assets as may be issuable or payable with respect to or in exchange for the
number of shares of Common Stock of the Corporation equal to the number of
shares of Common Stock of the Corporation immediately theretofore purchasable
and receivable upon the exercise of the rights represented by the Warrant, had
such reorganization, reclassification, consolidation, merger, or sale not taken
place and (y) in such event, adequate and appropriate provision shall be made
with respect to the rights and interests of such Holder to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Exercise Price and of the number of shares of Common Stock purchasable upon
the exercise of the Warrant) shall thereafter be applicable, as nearly as may
be, to any share of stock, securities, or assets thereafter deliverable upon the
exercise hereof. The Corporation shall not effect any such consolidation,
merger, or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Corporation) resulting from such consolidation or
merger, or the corporation purchasing such assets, shall assume or accept, by
written instrument executed and delivered to such Holder, the obligation to
deliver such shares of stock, securities, or assets which, in accordance with
the foregoing provisions, such Holder may be entitled to purchase.
5. CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Corporation or any other event occurs as to which provisions of Section 5 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Holder in accordance with such provisions, then the Board
of Directors of the Corporation shall make an adjustment in the number and class
of shares available under the Warrant, the Exercise Price or the application of
such provisions, so as to protect such purchase rights. The adjustment shall be
such as will give the Holder upon exercise for the same aggregate Exercise Price
the total number, class and kind of shares as he would have owned had the
Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.
6. PIGGYBACK REGISTRATION.
6.1. Whenever the Corporation proposes at any time following the
date of this Warrant Agreement to register any of its Common Stock under the
Securities Act of 1933, as amended (the "Securities Act") (a "Piggyback
Registration") (other than pursuant to form S-4, form S-8 or any successor
forms) and the registration form to be used may be used for the registration of
Common Stock issued or issuable by way of exercise of the Warrant ("Registrable
Securities"), the Corporation will give prompt written notice to all Holders of
the Warrant and Registrable Securities of its intention to effect such a
registration and will include in such registration all Registrable Securities
with respect to which the Corporation has received written requests for
inclusion therein within 30 days after the date the Corporation's notice is
given to such holders.
6.2. The Registration Expenses of the Holders of Registrable
Securities (as defined in Section 8 of this Warrant) will be paid by the
Corporation in the Piggyback Registration.
6.3. If the Piggyback Registration is an underwritten primary
registration on behalf of the Corporation, and the managing underwriters advise
the Corporation that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in an orderly
manner in such offering within a price range reasonably acceptable to the
Corporation, the Corporation will include in such registration (a) first, the
securities the Corporation proposes to sell, (b) second, the Registrable
Securities requested to be included therein and any other securities requested
to be included therein by other holders entitled to request inclusion of their
securities in such registration, pro rata among the holders of such Registrable
Securities and other securities on the basis of the number of Registrable
Securities requested to be included therein and any other securities requested
to be included therein by other holders entitled to request inclusion of their
securities in such registration, and (c) third, other securities requested to be
included in such registration.
6.4. If the Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Corporation's Common Stock, and the
managing underwriters advise the Corporation that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range
reasonably acceptable to the holders initially requesting such registration, the
Corporation will include in such registration (a) first, the securities
requested to be included therein by the holders requesting such registration,
and (b) the Registrable Securities and any other securities requested to be
included in such registration by other holders entitled to request inclusion of
their securities in such registration, pro rata among the holders of such
securities on the basis of the number of Registrable Securities requested to be
included therein and any other securities requested to be included therein by
other holders entitled to request inclusion of their securities in such
registration.
7. PIGGYBACK REGISTRATION PROCEDURES. Whenever the Holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Warrant, the Corporation will use its best efforts
to effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
the Corporation will as expeditiously as possible:
7.1. Prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Corporation will furnish to the Holders of the
Registrable Securities covered by such registration statement copies of all such
documents proposed to be filed);
7.2. Prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Holders set forth in
such registration statement;
7.3. Furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
7.4. Use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any Holder requests and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such Holder (provided
that the Corporation will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to
qualify, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction);
7.5. Promptly notify each Holder of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such Holder, the Corporation will
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus will
not contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
7.6. Use its best efforts to cause all such Registrable Securities
to be listed on each securities exchange or the inter-dealer quotation system on
which Common Stock issued by the Corporation is then listed, if any;
7.7. Provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
7.8. Enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities, including, without limitation, in the event that such
securities are being sold through underwriters, furnishing on the date that such
Registrable Securities are delivered to such underwriters for sale, an opinion
of legal counsel and a letter from the Corporation's auditors, dated as of such
date, in form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to such underwriters;
7.9. Subject to obtaining a confidentiality agreement in reasonably
acceptable form, make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
such Holder or underwriter, all financial and other records, pertinent corporate
documents and properties of the Corporation, and cause the Corporation's
officers, directors, employees, independent accountants and attorneys to supply
all information requested by any such Holder, underwriter, attorney, accountant
or agent in connection with such registration statement;
7.10. Permit any Holder of Registrable Securities which Holder, in
its sole exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Corporation, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material relating to such Holder, furnished to the Corporation in writing, which
in the reasonable judgment of such Holder and its counsel should be included;
and
7.11. In the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Corporation will use its best efforts promptly to obtain the
withdrawal of such order.
8. PIGGYBACK REGISTRATION EXPENSES. All expenses incident to the
Corporation's performance of or compliance with this Agreement, including all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Corporation and its independent certified
public accountants, special counsel for the Holders of the Registrable
Securities, underwriters (excluding discounts and commissions) and other persons
retained by the Corporation (all such expenses being herein called "Registration
Expenses"), will be paid by the Corporation.
9. NOTICES TO HOLDERS.
9.1. Right to Receive Notice. Nothing herein shall be construed as
conferring upon such Holder of the Warrant, the right to vote or consent onto
receive notice as a stockholder for the election of directors or any other
matter, or as having any rights whatsoever as a stockholder of the Corporation.
If, however, at any time prior to the expiration of the Warrant or its exercise
in full, any of the events described in Section 9.2 below shall occur, then, in
the event of one or more of said events, the Corporation shall give written
notice of such event at least 15 days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, conversion or exchange of
securities or subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall specify such
record date or the date of the closing of the transfer books, as the case may
be.
9.2. Events Requiring Notice. The Corporation shall be required to
give the notice described in this Section 9 upon one or more of the following
events: (i) if the Corporation shall take a record of the Holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Corporation, or
(ii) the Corporation shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Corporation or securities convertible
into or exchangeable for shares of capital stock of the Corporation, or any
option, right or warrant to subscribe therefor, or (iii) a dissolution,
liquidation or winding up of the Corporation or a sale of all or substantially
all of its property, assets and business shall be proposed.
9.3. Notice of Change in Exercise Price.The Corporation shall,
promptly after an event requiring a change in the Exercise Price pursuant to
Section 4 hereof, send notice to the Holder of such event and change ("Price
Notice"). The Price Notice shall describe the event causing the change and the
method of calculating same and shall be certified as being true and accurate by
the Corporation's President.
10. COVENANTS OF THE CORPORATION.
10.1. Covenants as to Exercise Shares. The Corporation covenants and
agrees that all Exercise Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Corporation further covenants
and agrees that the Corporation will at all times during the Exercise Period,
have authorized and reserved, free from preemptive rights, a sufficient number
of shares of its 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 Corporation 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.
10.2. No Impairment. Except and to the extent as waived or consented
to by the Holder, the Corporation will not, by amendment of its Articles 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 Corporation, 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.
10.3. Notices of Record Date. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to the
Holder, at least ten (10) days prior to the date specified herein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
11. REPRESENTATIONS OF HOLDER.
11.1. Acquisition of Warrant for Personal Account. The Holder
represents and warrants that it is acquiring the Warrant solely for its own
account for investment and not with a view to or for sale or distribution of
said Warrant or any part thereof. The Holder also represents that the entire
legal and beneficial interests of the Warrant and Exercise Shares the Holder is
acquiring is being acquired for, and will be held for, its account only.
11.2. Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act, on the basis that no
distribution or public offering of the stock of the Corporation is to be
effected. The Holder realizes that the basis for the exemption may not be
present if, notwithstanding its representations, the Holder has a present
intention of acquiring the securities for a fixed or determinable period in the
future, selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities. The Holder has no
such present intention.
(b) The Holder recognizes that the Warrant and the Exercise Shares
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. The Holder
recognizes that, except as provided herein, the Corporation has no obligation to
register the Warrant or the Exercise Shares of the Corporation, or to comply
with any exemption from such registration.
11.3. Disposition of Warrant and Exercise Shares.
(a) The Holder further agrees not to make any disposition of all
or any part of the Warrant or Exercise Shares in any event unless and until:
(i) The Corporation shall have received a letter secured by
the Holder from the Securities and Exchange Commission stating that no action
will be recommended to the Commission with respect to the proposed disposition;
or
(ii) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with said registration statement; or
(iii) The Holder shall have notified the Corporation of the
proposed disposition and shall have furnished the Corporation with a reasonably
detailed statement of the circumstances surrounding the proposed disposition,
and if reasonably requested by the Corporation, the Holder shall have furnished
the Corporation with an opinion of counsel, reasonably satisfactory to the
Corporation, for the Holder to the effect that such disposition will not require
registration of such Warrant or Exercise Shares under the Securities Act or any
applicable state securities laws.
(b) The Holder understands and agrees that all certificates
evidencing the shares to be issued to the Holder may bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Holder hereby agrees not to sell or otherwise transfer
or dispose of all or any part of this Warrant or the Exercise Shares during a
period specified by the representative of the underwriters of Common Stock (not
to exceed one hundred eighty (180) days) following the effective date of the
registration statement of the Corporation filed under the Securities Act. Holder
further agrees that the Corporation may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such period.
12. FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise 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 Corporation shall, 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 an Exercise Share by such fraction.
13. EARLY TERMINATION. In the event of, at any time during the Exercise
Period, any capital reorganization, or any reclassification of the capital stock
of the Corporation (other than a change in par value or from par value to no par
value or no par value to par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Corporation with or into another corporation (other than a merger solely
to effect a reincorporation of the Corporation into another state), or the sale
or other disposition of all or substantially all the properties and assets of
the Corporation in its entirety to any other person, the Corporation shall
provide to the Holder twenty (20) days advance written notice of such
reorganization, reclassification, consolidation, merger or sale or other
disposition of the Corporation's assets, and this Warrant shall terminate unless
exercised prior to the date the occurrence of such reorganization,
reclassification, consolidation, merger or sale or other disposition of the
Corporation's assets.
14. TRANSFER OF WARRANT. Subject to applicable laws, the restriction on
transfer set forth on the first page of this Warrant, this Warrant and all
rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder.
15. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Corporation 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
Corporation, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
16. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by telex, telegram,
express mail or other form of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses:
if to the Corporation, Commonwealth Biotechnologies, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Ph.D.
with a copy to: Xxxx Xxxxx LLP
901 X. Xxxx Street, Suite 0000
Xxxxxxxxxx Xxxxx - Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esquire
if to the Holder: Segerdahl & Company, Inc.
000 X. Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
or at such other address as one party may furnish to the other in writing.
Notice shall be deemed effective on the date dispatched if by personal delivery,
telecopy, telex or telegram, two (2) days after mailing if by express mail, or
three (3) days after mailing if by first-class mail.
17. LIMITATION OF LIABILITY. No provision hereof, in the absence of
affirmative action by the Holder hereof to purchase the securities issuable
under this Warrant, and no mere enumeration herein of the rights or privileges
of the Holder hereof, shall give rise to any liability of such Holder for the
purchase price or as a stockholder of the Corporation, whether such liability is
asserted by the Corporation or by creditors of the Corporation.
18. PAYMENT OF TAXES. The Corporation shall pay all expenses in
connection with, and all taxes and other governmental charges (other than any
thereof on, based on or measured by, the net income of the Holder thereof) that
may be imposed in respect of, the issue or delivery of the securities issuable
under this Warrant. The Corporation shall not be required, however, to pay any
tax or other charge imposed in connection with any transfer involved in the
issue of any certificate for shares of the securities issuable under this
Warrant in any name other than that of the Holder, and in such case, the
Corporation shall not be required to issue or deliver any stock certificate
until such tax or other charge has been paid or it has been established to the
Corporation's satisfaction that no such tax or other charge is due.
19. NO IMPAIRMENT OF RIGHTS. The Corporation hereby agrees that it will
not, through the amendment of its Articles of Incorporation or otherwise, 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 in order to protect the rights of the Holder against impairment.
20. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant
shall be binding upon the Corporation and the Holder and their respective
successors and assigns.
21. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.
22. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the Commonwealth of
Virginia.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its duly authorized officer as of April 19, 2002.
COMMONWEALTH BIOTECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Ph.D.
-------------------------------
Title: President and Chief Executive Officer
ATTEST:
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Secretary
NOTICE OF EXERCISE
TO: COMMONWEALTH BIOTECHNOLOGIES, INC.
(1) = The undersigned hereby elects to purchase shares of Common
Stock of Commonwealth Biotechnologies, Inc. (the "Corporation') pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.
= The undersigned hereby elects to purchase shares of
Common Stock of the Corporation pursuant to the terms of the net exercise
provisions set forth in the attached Warrant, and shall tender payment of all
applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
--------------------------
(Name)
--------------------------
--------------------------
(Address)
(3) The undersigned represents that (i) the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares; (ii) the undersigned is aware of the Corporation's business affairs
and financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision regarding its
investment in the Corporation; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned's own interests; (iv)
the undersigned understands that the shares of Common Stock issuable upon
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), by reason of a specific exemption from
the registration provisions of the Securities Act, which exemption depends upon,
among other things, the bona fide nature of the investment intent as expressed
herein, and, because such securities have not been registered under the
Securities Act, they must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available;
and (v) the undersigned agrees not to make any disposition of all or any part of
the aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Corporation with an opinion of
counsel reasonably satisfactory to the Corporation, stating that such
registration is not required.
--------------------------- ------------------------------
(Date) (Signature)
------------------------------
Print name of Holder)
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
Name:
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(Please Print)
Address:
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(Please Print)
Dated:
----------------------------------------
Holder's
Signature:
------------------------------------
Holder's
Address:
--------------------------------------
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 whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
