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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. W-0305-1-CRII-SASCO Business Trust
THIS CERTIFIES THAT, for value received in the amount of one
hundred
sixty thousand dollars (US $160,000.00) (the "Purchase Price"),
CRII-SASCO
BUSINESS TRUST (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"), sixteen
million (16,000,000) 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. The Purchase Price shall
be paid by Holder
in immediately available funds within five business days of the
Effective Date
(as defined below).
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, subject to the terms and
conditions of
Section 2.7, a period of six (6) months commencing on April 11,
2005 and ending
at 5:00 p.m., local time, at the Designated Office on October
11, 2005.
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"Exercise Price" shall mean twenty-five cents ($0.25), subject
to
adjustment as provided in Article 3 and Section 2.7.
"Notice of Exercise" shall mean the form of Notice of Exercise
attached
hereto as Exhibit A.
"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 4.3.
"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.
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
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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. Exercise Increments. Notwithstanding anything contained
herein to
the contrary Holder agrees to exercise this Warrant by delivery
of the Notice of
Exercise, payment of the Warrant Price and other documents and
instruments
required by Section 2.2 as follows:
(a) The Holder shall exercise this Warrant for not less than
4,000,000
shares of Warrant Stock upon the Company's satisfaction of the
matters described
under the column entitled "Covenant" on Exhibit B attached
hereto set forth
opposite the column designated as "Exercise I";
(b) The Holder shall exercise this Warrant for not less than
4,000,000
shares of Warrant Stock upon the Company's satisfaction of the
matters described
under the column entitled "Covenant" on Exhibit B attached
hereto set forth
opposite the column designated as "Exercise II";
(c) The Holder shall exercise this Warrant for not less than
4,000,000
shares of Warrant Stock upon the Company's satisfaction of the
matters described
under the column entitled "Covenant" on Exhibit B attached
hereto set forth
opposite the column designated as "Exercise III"; and
(d) The Holder shall exercise this Warrant for not less than
4,000,000
shares of Warrant Stock upon the Company's satisfaction of the
matters described
under the column entitled "Covenant" on Exhibit B attached
hereto set forth
opposite the column designated as "Exercise IV."
2.4. 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
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involved in such issuance or shall establish to the satisfaction
of the Company
that such tax has been paid.
2.5. 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.
2.6. 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.
2.7. General Covenants. The Company agrees to perform the
agreements
and covenants set forth on Exhibit C attached hereto.
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
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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.
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. 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.
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4.3. 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:
"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."
4.4. 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 t
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