Exhibit 10.1
CRI - ▇▇▇▇▇▇ Facility Agreement 12-04-04.DOC
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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This agreement (the "Expanded Facility Agreement") is entered into by and
between Cell Robotics International, Inc. (the "Company") and ▇.▇. ▇▇▇▇▇▇ &
Associates (the "Lender"), (the "Parties") as of November 15, 2004.
WHEREAS, the Parties entered into that certain Amended and Restated Loan and
Security Agreement dated July 6, 2004 (the "Agreement") under which the Lender
has extended loans to the Company aggregating to date $1,000,000; and
WHEREAS, the Company requires further working capital in order to implement its
business plan which calls for the commercial launch of its proprietary laser
medical and research products in several key markets; and
WHEREAS, the Lender is a significant shareholder of the Company and is fully
familiar with its business strategy and desires to provide this further
assistance to the Company; and
WHEREAS, the Lender understands that funds being provided to Company are
significant to its continuing operations and will specifically serve as a bridge
funding source leading to what the Parties anticipate will be a substantial
equity source of funding in the form of the sale of either common or preferred
shares which effort is now underway and is expected to yield at least $1,000,000
of new capital for the Company by March 15, 2005
NOW THEREFORE intending to be legally bound the parties hereto do agree as
follows:
1. Extension of Credit. The Lender hereby agrees to extend credit to the Company
in the new maximum amount of $2,000,000. Since $1,000,000 is outstanding under
this Facility, the amount of new funding shall be $1,000,000. This amount shall
be provided to the Company in accordance with a draw schedule attached hereto as
Exhibit "A". The total amount outstanding from time to time is the Total
Advances.
2. Term of the Facility: The Facility must be retired fully by July 1, 2005. The
Company agrees to repay $250,000 of the amount owed under the Facility within
five (5) days of receipt by the Company of proceeds from the sale of equity of
at least $2,000,000 in addition to the amounts
CRI - ▇▇▇▇▇▇ Facility Agreement 12-04-04.DOC
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converted from the Facility. The Company further agrees to repay additional
Facility obligation within thirty (30) days of receiving additional proceeds
beyond $2,000,000 from the sale of equity at the rate of $250,000 for each
$1,000,000 of additional equity proceeds.
3. Fees: The Company shall pay the Lender $25,000 in cash and issue to the
Lender 400,000 shares of its restricted common stock and as an Extension,
Origination and Guarantee Fee upon the execution of this Expanded Facility
Agreement. The restricted shares shall be subject to Rule 144 requirements and
shall not be registered for resale by the Company. The cash fee shall be
deducted from the first advance hereunder.
4. Interest. The Company further agrees to pay to the Lender as interest for the
Total Advances, an amount equal to two per cent (2.00%) for every 30-day period
that the Total Advances have been outstanding. This interest shall be paid
together with principal when any amount of Facility obligation is retired and in
no event later than July 1, 2005.The Parties acknowledge that there will be due
and owing to the Lender interest to November 14, 2004 of $90,000. This amount
shall be deducted from the first advance hereunder.
5. Promissory Notes. The Company shall execute one or more promissory notes in
the form attached hereto as Exhibit "B".
6. Security Interest. The underlying collateral for the Total Advances made to
the Company under the terms of this Expanded Facility Agreement shall be
existing and future accounts receivable, inventory, purchase orders, and the
intellectual property related to the Work Station Product Line ("Work Station
IP") and the UltraLight product line ("UltraLight IP") and the worldwide
manufacturing and marketing rights to the Infant Lasette (also known as the
"Heelstick") ("Infant Lasette M/D Rights"). The lien granted on the Work Station
IP, UltraLight IP and Infant Lasette M/D Rights shall entitle the Lender in the
event of default hereunder, in the exercise of its reasonable commercial
judgment, to sell or license the Work Station IP, the UltraLight IP and/or the
Infant Lasette M/D Rights. The sale or license of the Infant Lasette M/D Rights
may require the consent of the present licensor. The Lender will be entitled to
contact and negotiate this consent with the present Licensor only after the date
of the Lender's intention to declare the company in default. To avoid these
complications, the Lender shall first exercise its rights regarding the
Workstation and Ultralight IP's and only if the proceeds do not satisfy the
amount owing under the facility, exercise the right on the Infant Lasette. When
the Company shall have fully repaid all amounts owed under this Facility, the
Lender shall forthwith release its first security lien on the above described
assets of the Company and the Facility shall be terminated. Any
CRI - ▇▇▇▇▇▇ Facility Agreement 12-04-04.DOC
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excess proceeds received upon the sale or license of the collateral shall be
surrendered to the Company when the Facility has been fully repaid.
7. Additional Consideration. The Lender shall receive as additional
consideration Warrants to purchase common shares of the Company in the form
attached hereto as Exhibit "C" for 80,000 shares for each $100,000 advanced
under this Expanded Facility Agreement. The common stock underlying the Warrants
shall be registered on Form SB2 or similar registration statement with the SEC
within 180 days of the Lender's exercise of the Warrants. The Warrants shall be
valid for a period of three years from the date of issuance and shall have an
exercise price of thirty-seven and one-half cents per share ($0.375).
8. Conversion of Facility Debt to Equity. (a) At any time while any amount is
owed under this Facility and for a period of fifteen (15) days after the tender
of any payment of Facility obligation, the Lender shall be entitled to request
that shares of common stock be issued in exchange for cash payment of any part
of the amount of Facility obligation at the rate of one share of the Company's
common stock for every twenty five cents ($0.25) of Facility obligation
hereunder. This conversion formula shall be subject to adjustment in the event
of any stock splits or other adjustments made to the Company's common stock so
that the Lender receives an equivalent rate of conversion. The shares issued
pursuant to this right of conversion shall be restricted shares, subject to Rule
144 requirements and shall not be registered for resale by the Company. (b) If
the Company shall complete the sale of at least $1,000,000 of preferred shares
or $2,000,000 of common shares prior to April 15, 2005, at the election of the
Company $1,000,000 of Facility obligation shall be converted into preferred
shares provided that the terms of the preferred shares shall be substantially
similar to those set forth in Exhibit "D" hereof.
9. Communication with Lender. The Company agrees as a condition of this Facility
and so long as any amount is owed hereunder to (a) permit the Lender to nominate
one member to the Company's Board of Directors, to be together with the other
existing directors confirmed by the shareholders within six months from today
and to (b) provide periodic and timely reports on its cash position, cash
management and marketing and strategic planning to the Lender on a confidential
basis in a format and manner to be mutually agreed upon.
10. Other Financing. Should the Company receive a bona fide offer of other
financing during the term of this Expanded Facility Agreement, the Lender agrees
to negotiate in good faith any modifications to the terms hereof that are
necessary to permit such other financing to proceed.
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11. Entire Agreement, Amendments. This is the entire agreement of the parties
relating to this subject matter. It is to be governed by the laws of the State
of New Mexico and shall be enforced in the state or federal courts of the State
of New Mexico if the parties cannot amicably resolve any disputes by voluntary
submission to an agreed upon mediator or arbitration mechanism. This Expanded
Facility Agreement may be modified only by a writing signed by the parties.
12. Agreement in Counterparts. The Company and Lender recognize the importance
of expediency. This Expanded Facility Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
WITNESS THE HAND AND SEAL OF THE PARTIES:
CELL ROBOTICS INTERNATIONAL, INC.
----------------------------------
By: ▇▇▇▇ ▇▇▇▇▇, Chairman of the Board of Directors Dated: Dec. 4, 2004
Authorized by Board Action
▇. ▇. ▇▇▇▇▇▇ & ASSOCIATES
-----------------------------------
By: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President Dated: Dec. 4, 2004
EXHIBIT A
DRAW SCHEDULE FOR EXPANDED FACILITY AGREEMENT
1. THE FIRST SCHEDULED DRAW UNDER THIS EXPANDED FACILITY AGREEMENT SHALL BE
AVAILABLE TO THE COMPANY ON TEN DAYS WRITTEN NOTICE, BUT NOT BEFORE DECEMBER 15,
2004, IN THE NET AMOUNT OF $135,000. (THIS AMOUNT REPRESENTS A DRAW OF $250,000
LESS ACCRUED INTEREST OF $90,000 AND CASH ORIGINATION FEES OF $25,000.)
2. SUBSEQUENT SCHEDULED DRAWS SHALL BE AT THE DISCRETION OF THE COMPANY ON
THIRTY DAYS WRITTEN NOTICE AND NOT TO EXCEED $250,000 EVERY THIRTY DAYS
COMMENCING ON JANUARY 15, 2005.
3. THE COMPANY IS NOT OBLIGATED TO MAKE ANY SUBSEQUENT DRAWS OR TAKE DOWN ANY
SPECIFIC AMOUNT OF THE EXPANDED FACILITY BEYOND THE FIRST SCHEDULED DRAW IF IT
CHOOSES NOT TO DO SO.
EXHIBIT "B"
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
NOR UNDER THE SECURITIES LAWS OF ANY STATE, AND IS BEING OFFERED AND SOLD IN
RELIANCE UPON THE EXEMPTION SET FORTH IN SECTION 4(2) OF SUCH ACT. THIS NOTE MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED
OF WITHOUT PROPER REGISTRATION OR A SATISFACTORY OPINION OF COUNSEL THAT AN
EXEMPTION FROM REGISTRATION APPLIES TO ANY SUCH TRANSACTION.
SECURED PROMISSORY NOTE
1. FOR VALUE RECEIVED, the undersigned, CELL ROBOTICS INTERNATIONAL,
INC., a Colorado corporation ("Borrower"), promises to pay to ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("Lender"), the principal sum of $250,000.00 (TWO HUNDRED FIFTY THOUSAND
DOLLARS (the "Principal Amount").
2. This Note shall mature and the Principal Amount become due and
payable on or before July 1, 2005. Payment of the Principal Amount and any
accrued and unpaid interest shall be made by wire transfer to an account to be
designated by the Lender.
3. This Note is issued pursuant to that certain Expanded Facility
Agreement dated as of November 15, 2004 and the terms therein are incorporated
herein by reference and made a part hereof as if fully stated herein.
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4. Borrower, for itself and its legal representatives, successors, and
assigns, expressly waives presentment, demand, protest, notice of dishonor,
notice of non-payment, notice of maturity, notice of protest, presentment for
the purposes of accelerating maturity, diligence in collection, and any other
condition precedent to action against Borrower for the payment hereof.
5. This Note shall become immediately due and payable upon notice of
acceleration by Lender to Borrower following the occurrence of any one of the
following specified events: (a) assignment for the benefit of creditors; (b)
application for, or appointment of a receiver for, it or its property; (c)
filing a voluntary petition under any of the provision of the Bankruptcy Code or
having an involuntary petition filed against it under the Bankruptcy Code which
is not dismissed within 60 days; (d) any other proceeding under bankruptcy,
insolvency, reorganization, relief of debtors, or similar laws is commenced by
Borrower, or is commenced against Borrower and not dismissed within sixty (60)
day; (e) if any payment of Principal Amount or interest due hereunder is not
made within ten (10) days after the date such payment was due; (f) if Borrower
fails to perform any covenant or agreement hereunder in any material respect;
(g) if any representation or warranty made by Borrower herein was not true and
correct in all material respects when made. All such events shall constitute an
Event of Default hereunder. If any of the Events of Default specified in clauses
(a) through (d) above occurs, the balance of the Principal Amount, together with
all accrued but unpaid interest, shall immediately become due and payable. If
any other Event of Default occurs, Lender may declare the balance of the
Principal Amount, together with all accrued but unpaid interest, to be
immediately due and payable upon 30 days prior written notice thereof to
Borrower.
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6. This obligation is secured by a first lien on all of the Company's
future accounts receivable, purchase orders, and its present inventory and the
intellectual property associated with the products known as the "Work Station"
(the "Work Station IP"), the "UltraLight" (the "UltraLight IP), and the
worldwide manufacturing and marketing rights to the Infant Lasette (also known
as the "Heelstick") (the "Infant Lasette M/D Rights"). The Lender's security
interest has been or will be perfected by the filing of a UCC-1 Financing
Statement to perfect this security interest.
7. This Note is to be construed and enforced according to and governed
by the laws of the State of New Mexico.
8. Borrower agrees to pay all costs and expenses (including, without
limitation, reasonable attorney fees) incurred or payable by Lender in enforcing
each provision of this Note including, without limitation, respecting the
collection of any and all amounts payable under this Note.
9. Borrower acknowledges that its obligations to make payments
hereunder are absolute and unconditional, and agrees that such payments shall
not be requested to be, and shall not be, subject to any defense, setoff, or
counterclaim of any kind or nature, or any other action similar to the
foregoing, provided that nothing contained herein shall preclude any separate
proceeding by Borrower against Lender so long as such proceeding does not in any
manner relate to or otherwise impair the payment or the collection of the
amounts due hereunder in accordance with the terms of this Note.
10. No amendment, modification, rescission, waiver, consent,
forbearance, or release of any provision of this Note shall be valid or binding
unless made in writing and executed by a duly authorized representative of
Borrower and Lender. No consent or
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waiver, express or implied, by Lender to the breach by Borrower in the
performance by it of any of its obligations hereunder shall be deemed or
construed to be a consent to or waiver of the further breach in the performance
of the same or any other obligation of Borrower hereunder. Failure on the part
of Lender to complain of the act or failure to act by Borrower or to declare
Borrower in breach, irrespective of how long such failure continues, shall not
constitute a waiver by Lender of any of its rights hereunder.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of
___________________.
CELL ROBOTICS INTERNATIONAL ,INC.
----------------------------------------
By:
ATTEST:
---------------------------
Secretary
SEAL
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EXHIBIT "C"(R)
THIS WARRANT AND THE SECURITIES RECEIVABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF LEGAL
COUNSEL IS DELIVERED TO THE COMPANY STATING THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
WARRANT
WARRANT NO. ___________
THIS CERTIFIES THAT, for value received, ___________________ (the
"Holder") is entitled at any time during the Exercise Period (as such term and
other capitalized terms are defined in Article 1 hereof), subject to the terms
and conditions set forth herein, to purchase from CELL ROBOTICS INTERNATIONAL,
INC., a Colorado corporation (the "Company"), _______________shares of Common
Stock (subject to adjustment as provided herein) at the Warrant Price, all on
the terms and conditions and pursuant to the provisions hereinafter set forth.
1. DEFINITIONS.
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Applicable Law" shall mean all laws, rules and regulations applicable
to the Person, conduct, action or covenant in question, including, but not
limited to, all applicable common law and equitable principles, all provisions
of all applicable state and federal constitutions, statutes, rules, regulations
and orders of governmental body, and all orders, judgments and decrees of all
courts and arbitrators.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean the common stock, par value $.004 per share,
of the Company and any capital stock into which such common stock shall have
been changed and any other stock resulting from any reclassification of such
stock which is not preferred as to dividends or assets over any other class of
stock which shall be in effect from time to time.
"Designated Office" shall have the meaning set forth in Article 7.
"Exercise Period" shall mean the period commencing on the date hereof
and ending at 5:00 p.m., local time, at the Designated Office on
________________[Three Years Hence]
"Exercise Price" shall mean $0.375, subject to adjustment as provided
in Article 3.
"Notice of Exercise" shall mean the form of Notice of Exercise attached
hereto.
"Person" shall mean any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
limited or general partnership, any government or any agency or political
subdivision of any government.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 4.4.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Transfer" shall mean any disposition of the Warrant Stock or of any
interest therein, which would constitute a sale thereof within the meaning of
the Securities Act.
"Trading Price" shall mean (a) if the Common Stock is actively traded
on any national securities exchange or any Nasdaq quotation or market system,
then the closing price at which sales of Common Stock shall have been sold and
(b) if the shares of Common Stock are not actively traded on any such exchange
or system, then the arithmetic mean of the bid and asked prices of a share of
the Common Stock.
"Warrant" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, this Warrant.
"Warrant Price" shall mean an amount equal to (a) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.2, multiplied by (b) the Exercise Price as of the date of such
exercise.
"Warrant Stock" shall mean the shares of Common Stock issued, issuable
or both (as the context may require) to the Holder of this Warrant upon the
exercise thereof.
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2. RIGHTS GRANTED EXERCISE OF WARRANT.
2.1. Right of Exercise. Subject to Section 9.1, the Holder shall be
entitled to exercise this Warrant at any time and from time to time during the
Exercise Period.
2.2. Manner of Exercise. Subject to the terms and conditions of this
Warrant, the Holder shall have the right to exercise this Warrant during
Exercise Period, in whole or in part, by delivering to the Company at the
Designated Office (a) a Notice of Exercise, duly executed by the Holder,
specifying the number of shares of Common Stock to be purchased, (b) payment of
the Warrant Price by certified or official bank check, (c) this Warrant and (d)
in the event this Warrant is being exercised by any Person other than the Holder
pursuant to this Section 2.2, it shall be accompanied by proof acceptable to the
Company of the right of such Person or Persons to exercise this Warrant. Upon
receipt thereof, the Company shall, as promptly as practicable, execute (or
cause to be executed) and deliver (or cause to be delivered) to the Holder a
certificate or certificates representing the aggregate number of full shares of
Common Stock issuable upon such exercise. The certificate or certificates so
delivered shall be, to the extent possible, in such denomination or
denominations as the Holder shall request in the Notice of Exercise and shall be
registered in the name of the Holder or, subject to the terms of this Warrant,
such other name as shall be designated in the Notice of Exercise. This Warrant
shall be deemed to have been exercised and such certificate or certificates
shall be deemed to have been issued, and the Holder and/or any other Person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the items specified in clauses
(a) through (d) above are received by the Company. If this Warrant shall have
been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing the shares of Common Stock being
issued, deliver to the Holder a new warrant evidencing the rights of the Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new warrant shall in all other respects be identical with this Warrant,
or, at the request of the Holder, appropriate notation may be made on this
Warrant and the same returned to the Holder. Notwithstanding any provision
herein to the contrary, the Company shall not be required to register shares in
the name of any Person who acquires this Warrant (or part hereof) or any Warrant
Stock otherwise than in accordance with this Warrant.
2.3. Payment of Taxes. The issuance of a certificate or certificates
for shares of Common Stock upon exercise of this Warrant shall be made without
charge for any stamp or other similar tax in respect of such issuance. However,
if any such certificate is to be issued in a name other than that of the Holder,
the Person or Persons requesting the issuance thereof shall pay to the Company
the amount of any tax which may be payable in respect of any transfer involved
in such issuance or shall establish to the satisfaction of the Company that such
tax has been paid.
2.4. Fractional Shares. The Company shall not be required to issue
fractions of shares of Common Stock upon exercise of this Warrant or to
distribute certificates which evidence fractional shares of Common Stock. If the
exercise of this Warrant would result in a fractional share of Common Stock or
the right to acquire a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be rounded up or down to the nearest whole share.
The Holder expressly waives his right to receive any fractional shares upon
exercise of this Warrant.
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2.5. Compliance with Law and Regulations. This Warrant and the
obligation of the Company to sell and deliver the shares of Warrant Stock
hereunder shall be subject to all Applicable Laws and to such approvals by any
government or regulatory agency as may be required. Notwithstanding any other
provision of this Warrant, this Warrant may not be exercised if its exercise, or
the receipt of the shares of Warrant Stock pursuant thereto, would be contrary
to Applicable Law.
3. ADJUSTMENTS AND ANTI-DILUTION PROVISIONS.
3.1. Adjustment for Change in Capital Stock. In the event of any change
in the Common Stock of the Company by reason of any combination, subdivision,
split, reclassification, stock dividend or any similar change affecting the
Common Stock, then in any such event the number and kind of shares of Common
Stock subject to this Warrant and the Exercise Price shall be adjusted, in such
manner as the Board of Directors deems equitable to prevent substantial dilution
or enlargement of the rights granted to the Holder. The adjustment shall become
effective immediately after the record date in the case of a dividend or
distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
3.2. Reorganization of Company. If at any time while this Warrant is
outstanding and unexpired there shall be (a) a reorganization of the Company,
(b) a merger or consolidation of the Company with or into another entity in
which the Company is not the surviving entity, or a reverse triangular merger in
which the Company is the surviving entity but the shares of the Company's
capital stock outstanding immediately prior to the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (c) a sale or transfer of the Company's properties and
assets as, or substantially as, an entirety to any other Person, then lawful and
adequate provision will be made whereby the Holder will thereafter have the
right to purchase and receive upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
this Warrant, the kind and amount of stock and other securities and assets
(including, without limitation, cash) receivable upon such merger, consolidation
or sale by a holder of the number of shares of Common Stock of the Company
deliverable upon the exercise of this Warrant immediately prior to such merger,
consolidation or sale. In any such case, appropriate provisions will be made
with respect to the rights and interests of the 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 this Warrant) will thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The foregoing provisions of this Section
3.2 shall similarly apply to successive reorganizations, mergers, consolidations
and sales and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If this Section 3.2
applies to a transaction, Section 3.1 shall not apply to such transaction.
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3.3. Notice of Adjustment. Whenever the Exercise Price is adjusted, the
Company shall promptly mail to the Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Such certificate prepared in good faith shall be
conclusive evidence of the correctness of such adjustment absent manifest error.
3.4. Company Determination Final. Any determination that the Company or
the Board of Directors must make pursuant to this Warrant is conclusive absent
manifest error.
3.5. When No Adjustment Required. No adjustment need be made for any
transaction referred to in Section 3.2 if the Holder is entitled to participate
in the transaction on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction. No adjustment need be
made for a change in the par value or no par value of the Common Stock.
4. RESTRICTIONS ON TRANSFER AND COMPLIANCE WITH SECURITIES ACT AND
REGISTRATION.
4.1 Agreement to Be Bound. The Holder, by acceptance of this Warrant,
agrees to be bound by the provisions of this Article 4. The Holder further
agrees that all shares of Warrant Stock will be disposed of only in accordance
with the Securities Act and the rules and regulations of the Commission
promulgated thereunder.
4.2. [Intentionally Omitted.]
4.3. Compliance with the Securities Act. This Warrant and the Warrant
Stock have not been registered under the Securities Act or any applicable state
securities law. The Holder hereof, by acceptance hereof, agrees that this
Warrant and all shares purchased upon exercise hereof will be disposed of only
in accordance with the Securities Act and the rules and regulations of the
Commission promulgated thereunder or of any applicable state securities law. The
Holder represents and warrants that (a) he, she or it is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D under the
Securities Act, and is acquiring the Common Stock for his, her or its own
account, for investment and not with a view to any "distribution" within the
meaning of the Securities Act; (b) he, she or it has been furnished with all
information which he, she or it deems necessary to evaluate the merits and risks
of this Warrant and the purchase of the Common Stock upon exercise thereof; (c)
he, she or it has had the opportunity to ask questions concerning the Common
Stock and the Company and all questions posed have been answered to his, her or
its satisfaction; (d) he, she or it has been given the opportunity to obtain any
additional information he, she or it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; and (e)
he, she or it has such knowledge and experience in financial and business
matters that he, she or it is able to evaluate the merits and risks of
purchasing the Common Stock and to make an informed investment decision relating
thereto.
4.4. Restrictive Legends. Except as otherwise provided in this Article
4, each certificate for Warrant Stock initially issued upon the exercise of this
Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
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"THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL SUCH SECURITIES
ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF LEGAL COUNSEL IS DELIVERED TO THE COMPANY STATING
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
4.5. Transfers. No shares of Restricted Common Stock issued upon the
exercise hereof shall be Transferred other than pursuant to an effective
registration statement under the Securities Act or, if required by the Company,
an opinion of counsel is delivered to the Company stating an exemption from the
registration provisions thereof. Each certificate, if any, evidencing such
shares of Restricted Common Stock issued upon any such Transfer, other than in a
public offering pursuant to an effective registration statement, shall bear the
restrictive legend set forth in Section 4.4, unless (a) such Transfer is in
accordance with the provisions of Rule 144 under the Securities Act (or any
other rule or provision permitting sale without registration under the
Securities Act), (b) such Restricted Common Stock shall have been effectively
registered under the Securities Act and disposed of pursuant thereto or (c) in
the opinion of counsel delivered at the request of the Holder, which opinion
shall be reasonably acceptable to the Company, such legend is not required for
the purposes of compliance with the Securities Act. The holder of the Restricted
Common Stock shall not be entitled to Transfer such Restricted Common Stock
except in accordance with this Section 4.5.
5. RESERVATION AND AUTHORIZATION OF COMMON STOCK.
From and after the date of this Warrant, the Company shall at all times
reserve and keep available for issuance upon the exercise of this Warrant such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of this Warrant. All shares of Common
Stock issuable pursuant to the terms hereof, when issued upon exercise of this
Warrant with payment therefor in accordance with the terms hereof, shall be duly
and validly issued and fully paid and nonassessable.
6. THEFT, LOSS, DESTRUCTION.
Upon receipt by the Company from the Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it and,
in case of mutilation, upon surrender and cancellation hereof, the Company will
execute and deliver in lieu hereof a new Warrant of like tenor to the Holder;
provided, however, in the case of mutilation, no indemnity shall be required if
this Warrant in identifiable form is surrendered to the Company for
cancellation.
6
7. OFFICE OF THE COMPANY.
As long as this Warrant remains outstanding, the Company shall maintain
an office or agency, which may be the principal executive offices of the Company
or the offices of the transfer agent of the Company (the "Designated Office"),
where this Warrant may be presented for exercise, registration of transfer,
division or combination as provided in this Warrant. Such Designated Office
shall initially be the principal office of the Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇., ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇; thereafter, such office shall be the office
of the Company or of an agency designated by the Company in a notice delivered
to the Holder.
8. NO SHAREHOLDER RIGHTS.
Prior to the exercise of this Warrant, the Holder of this Warrant shall
not be entitled to any rights of a shareholder of the Company, including,
without limitation, the rights to vote, to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company except as provided herein.
9. MISCELLANEOUS.
9.1. Termination of Warrant. Except those rights which by their terms
specifically extend beyond the end of the Exercise Period, this Warrant and all
rights granted herein, to the extent those rights have not lapsed or been
exercised, will terminate and become null and void at the end of the Exercise
Period or as otherwise specifically provided herein.
9.2. Notices. All notices, requests, demands, claims and other
communications under this Warrant shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly given if
(and then two business days after) it is sent by (a) confirmed facsimile; (b)
overnight delivery; or (c) registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Company: Cell Robotics International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to, which copy ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
shall not constitute notice: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holder:
Facsimile: (▇▇▇ ▇▇▇-▇▇▇▇
7
The Holder or the Company may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. The
Holder or the Company may change the address to which notices, requests,
demands, claims and other communications hereunder are to be delivered by giving
the other party notice in the manner provided in this Warrant.
9.3. Succession and Assignment. This Warrant shall be binding upon and
inure to the benefit of the Holder and the Company and their respective
successors and permitted assigns. Neither the Holder or the Company may assign
either this Warrant or any of its rights, interests or obligations hereunder
without the prior written approval of the other party.
9.4. Severability. Any term or provision of this Warrant that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.5. 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.
9.6. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW MEXICO WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF NEW MEXICO OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW MEXICO. Any legal action or
proceeding with respect to this Warrant shall be brought in any New Mexico state
or federal court sitting in Bernalillo County, New Mexico, and, by execution and
delivery of this Warrant, the Holder and the Company hereby accept for
themselves and in respect of their property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Holder and the Company hereby
irrevocably waive any objection, including, without limitation, any objection to
the laying of venue or based on the grounds of forum non conveniens, which they
may now or hereafter have to the bringing of any such action or proceeding in
such respective jurisdictions.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its President and Chief Executive Officer on the day of December
2004.
CELL ROBOTICS INTERNATIONAL, INC.
By:
-----------------------------------
8
NOTICE OF EXERCISE FORM
(To be executed only upon partial or full exercise of the within Warrant)
The undersigned registered Holder of the within Warrant irrevocably
exercises the within Warrant for and purchases _______ shares of Common Stock,
par value $0.004 per share ("Common Stock"), of CELL ROBOTICS INTERNATIONAL,
INC. (the "Company") and herewith makes payment therefor in the amount of
$___________, all at the price and on the terms and conditions specified in the
within Warrant and requests that a certificate (or ___________ certificates in
denominations of _________ shares) for the shares of Common Stock of the Company
hereby purchased be issued in the name of and delivered to (choose one) (a) the
undersigned or (b) ________, whose address is ________________________________,
and, if such shares of Common Stock shall not include all the shares of Common
Stock issuable as provided in the within Warrant, that a new Warrant of like
tenor for the number of shares of Common Stock of the Company not being
purchased hereunder be issued in the name of and delivered to (choose one) (a)
the undersigned or (b) _________, whose address is __________________________.
The undersigned is aware that the Common Stock has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws. The undersigned understands that the reliance by the
Company on exemptions under the Securities Act is predicated in part upon the
truth and accuracy of the statements of the undersigned.
The undersigned represents and warrants that (a) he, she or it is an
"accredited investor," as that term is defined in Rule 501(a) of Regulation D
under the Securities Act and is acquiring the Common Stock for his or her own
account, for investment and not with a view to any "distribution" within the
meaning of the Securities Act; (b) the undersigned has no present intention of
making any transfer of the Common Stock; (c) he, she or it has been furnished
with all information which he, she or it deems necessary to evaluate the merits
and risks of the purchase of the Common Stock; (d) he, she or it has had the
opportunity to ask questions concerning the Common Stock and the Company and all
questions posed have been answered to his, her or its satisfaction; (e) he, she
or it has been given the opportunity to obtain any additional information he,
she or it deems necessary to verify the accuracy of any information obtained
concerning the Common Stock and the Company; and (f) he, she or it has such
knowledge and experience in financial and business matters that he, she or it is
able to evaluate the merits and risks of purchasing the Common Stock and to make
an informed investment decision relating thereto.
The undersigned understands that because the Common Stock has not been
registered under the Securities Act, he, she or it must continue to bear the
economic risk of the investment for an indefinite time and the Common Stock
cannot be sold unless the Common Stock is subsequently registered under
applicable federal and state securities laws or an exemption from such
registration is available.
9
The undersigned agrees that he, she or it will in no event sell or
distribute or otherwise dispose of all or any part of the Common Stock unless
(a) there is an effective registration statement under the Securities Act and
applicable state securities laws covering any such transaction involving the
Common Stock, as applicable, or (b) such Common stock is sold in a transaction
exempt from such registration. The undersigned agrees that, if requested by the
Company, and at the expense of the undersigned, he or she shall deliver an
opinion of counsel, which opinion shall be reasonably satisfactory to the
Company that such registration or qualification is not required.
The undersigned consents to the placing of a legend on its certificate
for the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the shares until the Common Stock may be legally resold or
distributed without restriction.
Signature Guaranteed: By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
NOTICE: THE SIGNATURE TO THIS NOTICE OF EXERCISE MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE WITHIN WARRANT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. THE SIGNATURE ON THIS NOTICE
OF EXERCISE MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY IN THE
UNITED STATES OR A MEMBER FIRM OF THE NEW YORK STOCK EXCHANGE.
10
EXHIBIT "D" (R)
TERMS FOR NEW SERIES A PREFERRED SHARES
1) INVESTORS: All purchasers of the Series A Preferred shall be Accredited
Investors.
2) PRINCIPAL AMOUNT: $2,500,000.
3) INVESTMENT VEHICLE: 25,000 Shares of new Series A Preferred (Face Value of
$100.00 Per Share)
4) RIGHTS OF PREFERRED SHARES:
- Liquidation Preference Over Common Shares
- Convertible into common shares at $0.25 per Share
- Conversion to be mandatory if at least $2,000,000 of other
equity is raised by the Company by December 31, 2004, or when
the Company achieves a market value of $25,000,000, or annual
revenues of $10,000,000
- The Preferred Shares to pay a dividend in additional shares of
Series A Preferred at the annual rate of 12%, such dividends
to be paid on a semi-annual basis while the Preferred is
outstanding.
- Each Preferred Share to have voting rights equal to 400 common
shares, equivalent of the correspondent of the common shares
after conversion.
5) REGISTRATION: The Preferred Shares will not be registered. The common
shares reserved for conversion will be registered by the Company on
Form SB2 within 180 days of conversion, but only if the respective
Holder so requests.