January 9, 2013

 

Enclosed with this letter are amended and restated versions (the “Amended
Agreements”) of the following agreements which were originally entered into
between Eos Petro, Inc. and Clouding IP, LLC on December 26, 2012 (the
“”Original Agreements”): (1) an Oil & Gas Services Agreement; (2) a Warrant to
Purchase Common Stock; (3) a Loan Agreement and Secured Promissory Note; and (4)
a Leasehold Mortgage, Assignment, Security Agreement and Fixture Filing.

 

The Amended Agreements modify the following provisions of the Original
Agreements:

 

(1) all of the agreements are now between Clouding IP, LLC and Cellteck, Inc.,
not Eos Petro, Inc. (Cellteck Inc. is Eos Petro, Inc.’s parent company). Since
Cellteck is incorporated under Nevada law, the governing law in all of the
agreements other than the Mortgage has also been changed to Nevada.

 

(2) the shares issuable to Clouding IP, LLC under the Loan Agreement and Secured
Promissory Note have been changed from shares of common stock of Eos Petro, Inc.
to shares of Series B Preferred Stock of Cellteck, Inc.

 

(3) The obligation to record the loan within seven business days has been
removed from the Loan Agreement and Secured Promissory Note.

 

(4) “Failure to Deliver Common Stock” has been removed from the events of
default in the Loan Agreement and Secured Promissory note.

 

(5) the shares issuable to Clouding IP, LLC upon exercise of the Warrant to
Purchase Common Stock have been changed to shares of common stock of Cellteck,
Inc. Furthermore, to protect such shares from dilution upon the occurrence of an
upcoming reverse stock split:

 

(a) the warrants will not be exercisable until effectuation of the reverse stock
split; and

 

(b) anti-dilution provisions specifically relating to the upcoming reverse stock
split have been inserted.

 

(6) the cashless exercise option has been removed from the Warrant to Purchase
Common Stock.

 

(7) the warrants issuable to Clouding IP, LLC under the Oil & Gas Services
Agreement are issuable in consideration of Clouding IP, LLC’s services without
the need for Clouding to make an additional $5,000 payment.

 

The Amended Agreements amend and restate the Original Agreements in their
entirety. By signing this letter and the attached Amended Agreements, the
undersigned parties hereby acknowledge that: (i) they have read, understand and
consent to the modifications made to the Original Agreements in the Amended
Agreements; and (ii) the Original Agreements are voided in their entirety by the
attached Amended Agreements and have no further effect.

 

EOS PETRO, INC., CLOUDING IP, LLC     a Delaware corporation a Delaware limited
liability company

 

 

 

 

By: /s/ Nikolas Konstant     /s/ William R. Carter, Jr.                 Nikolas
Konstant   By: William R. Carter, Jr.                 Chairman of the Board of
Directors   Its: Managing Member  

 

CELLTECK, INC.

 

a Nevada corporation

 

By: /s/ Nikolas Konstant           Nikolas Konstant           Chairman of the
Board of Directors  

 

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THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY 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.

 

Warrant No. ES-1 December 26, 2012

 

CELLTECK, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

**** 1,000,000 Shares of Common Stock ****

 

THIS WARRANT CERTIFIES THAT, for value received, Clouding IP, LLC, or registered
assigns (the “Holder”), is entitled to subscribe for and purchase from Cellteck,
Inc., a Nevada corporation (the “Company”), with its principal offices located
at 1999 Avenue of the Stars, Suite 2520, Los Angeles, California 90067, up to
and including the number of fully paid and nonassessable shares of common stock,
par value $0.0001 per share (the “Common Stock”) of the Company set forth above
(the “Warrant Shares”), at the exercise price of $3.00 per share (the “Warrant
Exercise Price”) (and as adjusted from time to time pursuant to Section 3
hereof), in accordance with the exercise procedure set forth in Section 1 hereof
and prior to or upon December 25, 2015 (the “Expiration Date”), subject to the
provisions and upon the terms and conditions hereinafter set forth.

 

This Warrant is issued in connection with a certain Oil & Gas Services
Agreement, dated as of the date hereof (as amended, modified or supplemented,
the “Services Agreement”), between Company and Holder. Pursuant to the Services
Agreement, the Holder, for and behalf of itself and its affiliated companies,
has agreed to provide certain services to the Company. Terms used but not
defined in this Warrant shall have the meanings given in the Services Agreement
(together with this Warrant, the “Services Documents”).

 

1.          Exercise Procedure; Method of Exercise; Cash Payment; Issuance of
New Warrant.

 

(a)          On October 12, 2012, pursuant to an Agreement and Plan of Merger
dated July 16, 2012 (the “Merger Agreement”), Company completed a merger
transaction. In the Merger Agreement, the Company agreed to implement a reverse
stock split at an exchange ratio of 1-for-800 of its outstanding shares of
common stock as soon as reasonably practicable following the completion of the
Merger (the “Merger Reverse Split”). This Warrant shall not be exercisable by
Holder unless and until the Merger Reverse Split has been effectuated by the
filing of an amendment to the Company’s Articles of Incorporation with the
Nevada Secretary of State. Thereafter, the Warrant shall be exercisable by
Holder, in whole or in part and from time to time, at any time until the
Expiration Date, at the election of the Holder hereof.

 

(b)          If Holder elects to exercise this Warrant, Holder shall surrender
this Warrant (with the notice of exercise substantially in the form attached
hereto as Exhibit A duly completed and executed) at the principal executive
offices of Company, accompanied by payment to Company, by: (a) certified or bank
check acceptable to Company; (b) cancellation by Holder of bona fide
indebtedness of Company to Holder, if agreed to in advance in writing by Company
in the Company’s sole and absolute discretion; (c) by wire transfer to an
account designated by Company; or (d) any combination of (a), (b) and (c), of an
amount equal to the then applicable Warrant Exercise Price multiplied by the
number of Warrant Shares then being purchased.

 

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(c)          The person or persons in whose name(s) any certificate(s)
representing the Warrant Shares shall be deemed to have become the holder(s) of
record of, and shall be treated for all purposes as the record holder(s) of, the
shares represented thereby (and such shares shall be deemed to have been issued)
immediately prior to the close of business on the date or dates upon which this
Warrant is exercised. In the event of any exercise of the rights represented by
this Warrant, certificates for the Warrant Shares so purchased shall be
delivered to the Holder hereof as soon as possible and in any event within five
(5) Business Days after such exercise and, unless this Warrant has been fully
exercised or expired, a new warrant having the same terms as this Warrant and
representing the remaining portion of such shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
Holder hereof as soon as possible and in any event within such five (5) Business
Day period. For purposes of this Warrant, the term “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in Los
Angeles, California are authorized or required by law to remain closed.

 

2.          Reservation of Shares. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issuance upon exercise of the
purchase rights evidenced by this Warrant a sufficient number of shares of its
capital stock to provide for the exercise of the rights represented by this
Warrant.

 

3.          Adjustment of Warrant Exercise Price and Number of Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Warrant Exercise Price shall be subject to adjustment to the nearest whole
share (one-half and greater being rounded upward) and nearest cent (one-half
cent and greater being rounded upward) from time to time upon the occurrence of
certain events, as follows. Each of the adjustments provided by the
subsections below shall be deemed separate adjustments and any adjustment of
this Warrant pursuant to one subsection of this Section 3 shall preclude
additional adjustments for the same event or transaction by the remaining
subsections.

 

(a)          Merger Reverse Split. When the Merger Reverse Split is implemented,
it shall have no effect on this Warrant. Neither the Exercise Price nor the
number of shares issuable upon exercise of this warrant shall be increased or
decreased on account of the Merger Reverse Split.

 

(b)          Reclassification. Except as provided above in Section 3(a), in case
of any reclassification or change of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination) into the same or a different number or class of securities, the
Company shall duly execute and deliver to the Holder of this Warrant a new
warrant (in form and substance reasonably satisfactory to the Holder of this
Warrant), so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, at a total purchase price not to exceed
that payable upon the exercise of the unexercised portion of this Warrant, and
in lieu of the shares of Common Stock theretofore issuable upon exercise of this
Warrant, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification or change by a holder of the
number of shares then purchasable under this Warrant. The Company shall deliver
such new warrant as soon as possible and in any event within five (5) Business
Days after such reclassification or change. Such new warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications or changes.

 

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(c)          Stock Splits or Combination of Shares. Except as provided above in
Section 3(a), if the Company at any time while this Warrant remains outstanding
and unexpired shall subdivide (by stock split) or combine (by reverse stock
split) its outstanding shares of capital stock of the class into which this
Warrant is exercisable, the Warrant Exercise Price shall be proportionately
decreased in the case of a subdivision or increased in the case of a
combination, effective at the close of business on the date the subdivision or
combination becomes effective and the number of shares of Common Stock issuable
upon exercise of this Warrant shall be proportionately increased in the case of
a subdivision or decreased in the case of a combination, and in each case to the
nearest whole share, effective at the close of business on the date the
subdivision or combination becomes effective. The provisions of this
subparagraph (b) shall similarly apply to successive subdivisions or
combinations of outstanding shares of capital stock into which this Warrant is
exercisable.

 

(d)          Common Stock Dividends. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend with respect to Common
Stock payable in Common Stock, then: (i) the Warrant Exercise Price shall be
adjusted, from and after the date of determination of stockholders entitled to
receive such dividend or distribution (the “Record Date”), to that price
determined by multiplying the Warrant Exercise Price in effect immediately prior
to such date of determination by a fraction (A) the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to such
dividend or distribution, and (B) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend or
distribution and (ii) the number of shares of Common Stock issuable upon
exercise of this Warrant shall be proportionately adjusted, to the nearest whole
share, from and after the Record Date by multiplying the number of shares of
Common Stock purchasable hereunder immediately prior to such Record Date by a
fraction (A) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution, and
(B) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution. The provisions
of this subparagraph (c) shall similarly apply to successive Common Stock
dividends by the Company.

 

(e)          Certain Issuance of Securities. If the Company shall at any time or
from time to time while this Warrant is outstanding (A) issue shares of Common
Stock, stock or securities (other than Options) directly or indirectly
convertible into or exchangeable or exercisable for Common Stock (“Convertible
Securities”), or rights, warrants or options to subscribe for or purchase shares
of Common Stock or Convertible Securities (“Options”) entitling the recipient
thereof to subscribe for or purchase shares of Common Stock, at a price per
share or (B) amend or otherwise modify the terms of any Convertible Securities
or Options to a price per share (such issuance, subscription or purchase price
or amended or modified price being referred to as the “New Issue Price”), in
either case, less than the Warrant Exercise Price then in effect, then the
Warrant Exercise Price in effect at the opening of business on the day next
following such issuance shall be adjusted to equal the New Issue Price.  Such
adjustment shall become effective immediately upon the opening of business on
the day next following such issuance.  In determining whether any shares of
Common Stock are issued or issuable, or Convertible Securities or Options
entitle the holders of Warrants to subscribe for or purchase shares of Common
Stock at less than such Warrant Exercise Price, there shall be taken into
account any consideration received by the Company upon issuance of any such
securities, the conversion of any such Convertible Securities and upon exercise
of such Options the value of such consideration, if other than cash, to be
determined in good faith by the Board of Directors of the Company in the
exercise of their fiduciary duty, with the concurrence of the holders of at
least a majority of the Warrants then outstanding.  Notwithstanding the
foregoing or any other provision herein to the contrary, no adjustment to the
Warrant Exercise Price will be required as a result of any (i) shares of Common
Stock issued or deemed to have been issued by the Company pursuant to an
employee benefit plan that has been approved by the Board of Directors and
stockholders of the Company prior to or on the date of the Services Agreement,
pursuant to which the Company’s securities may be issued to any consultant,
employee, officer or director for services provided to the Company (an “Approved
Stock Plan”); (ii) shares issued or deemed to have been issued upon the
conversion, exchange or exercise of any Option or Convertible Security
outstanding on the date prior to or on the date of the Services Agreement,
provided that the terms of such Option or Convertible Security are not amended
or otherwise modified on or after the date of the Services Agreement, and
provided that the conversion price, exchange price, exercise price or other
purchase price is not reduced, adjusted or otherwise modified and the number of
shares of Common Stock issued or issuable is not increased (whether by operation
of, or in accordance with, the relevant governing documents or otherwise) on or
after the date of the Services Agreement; and (ii) shares of the Common Stock
issued or deemed to have been issued by the Company upon exercise of this
Warrant (each such issuance, an “Exempted Issuance”).

 

5

 

 

(f)          Certain Distributions. Except as provided above in Section 3(a), in
case the Company shall at any time or from time to time while this Warrant is
outstanding distribute to all holders of shares of Common Stock (including any
such distribution made in connection with a merger or consolidation in which the
Company is the resulting or surviving person and the Common Stock is not changed
or exchanged) cash, evidences of indebtedness of the Company, any subsidiary or
another issuer, securities of the Company (including Convertible Securities),
any subsidiary or another issuer or other assets (excluding dividends payable in
shares of Common Stock for which adjustment is made under another paragraph of
this Section 3 and any distribution in connection with an Exempted Issuance) or
Options to subscribe for or purchase of any of the foregoing, then, and in each
such case, the Warrant Exercise Price then in effect shall be adjusted (and any
other appropriate actions shall be taken by the Company) by multiplying the
Warrant Exercise Price in effect immediately prior to the date of such
distribution by a fraction (x) the numerator of which shall be the Weighted
Average Price of the Common Stock for the five (5) consecutive Trading Days
immediately prior to the date of distribution less the then fair market value
(as determined by the Board of Directors in the exercise of their fiduciary
duties with the concurrence of the holders of at least a majority of the
Warrants then outstanding) of the portion of the cash, evidences of
indebtedness, securities or other assets so distributed or of such Options to
subscribe applicable to one share of Common Stock and (y) the denominator of
which shall be the Weighted Average Price of the Common Stock for the five
(5) consecutive Trading Days immediately prior to the date of distribution (but
such fraction shall not be greater than one).  Such adjustment shall be made
whenever any such distribution is made and shall become effective retroactively
to a date immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.

 

(g)          Tender Offer. In the event that the Company shall at any time or
from time to time while this Warrant is outstanding make a payment of cash or
other consideration to the holders of shares of Common Stock in respect of a
tender offer or exchange offer, other than an odd-lot offer, and the value of
the sum of (i) the aggregate cash and other consideration paid for such shares
of Common Stock, and (ii) any other consent or other fees paid to holders of
shares of Common Stock in respect of such tender offer or exchange offer,
expressed as an amount per share of Common Stock validly tendered or exchanged
pursuant to such tender offer or exchange offer, exceeds the Weighted Average
Price of the Common Stock on the Trading Day immediately prior to the date any
such tender offer or exchange offer is first publicly announced (the
“Announcement Date”), then the Warrant Exercise Price shall be adjusted in
accordance with the formula:

 

R’ =    R (O’ x P)   F + (P x O)

 

For purposes of the foregoing formula: 

 

R = the Warrant Exercise Price in effect at the expiration time of the tender
offer or exchange offer that is the subject of this Section 4(e)(iv) (the
“Expiration Time”);

 

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R’ = the Warrant Exercise Price in effect immediately after the expiration time;

 

F = the fair market value (as determined by the Board of Directors in the
exercise of their fiduciary duties with the concurrence of the Holder) of the
aggregate value of all cash and any other consideration paid or payable for
shares of Common Stock validly tendered or exchanged and not withdrawn prior to
the Expiration Time (the “Purchased Shares”);

 

O = the number of shares of Common Stock outstanding immediately after the
Expiration Time less any Purchased Shares;

 

O’ = the number of shares of Common Stock outstanding immediately after the
Expiration Time, plus any Purchased Shares; and

 

P = the Weighted Average Price of the Common Stock on the Trading Day next
succeeding the Announcement Date.

 

Such decrease, if any, shall become effective immediately upon the opening of
business on the day next following the Expiration Time.  In the event that
Company is obligated to purchase shares pursuant to any tender offer, but the
Company is prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Warrant Exercise Price shall again be adjusted
to the Warrant Exercise Price that would then be in effect if such tender or
exchange offer had not been made.  If the application of this Section 3(g) to
any tender or exchange offer would result in an increase in the Warrant Exercise
Price, no adjustment shall be made for such tender or exchange offer under this
Section 3(g)

 

(h)          No adjustment in the Warrant Exercise Price shall be required
unless such adjustment would require a cumulative decrease of at least $0.01 in
such price; provided, however, that any adjustments that by reason of this
Section 3 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment until made.  All calculations under this
Section 3(h) shall be made to the nearest cent (with $.005 being rounded upward)
or to the nearest one-tenth of a share (with .05 of a share being rounded
upward), as the case may be.

 

(i)          In any case in which Section 3 provides that an adjustment shall
become effective on the day next following the record date for an event, the
Company may without penalty defer until the occurrence of such event issuing to
the Holder with respect to any part of this Warrant exercised after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such exercise by reason of the adjustment required by such
event over and above the shares of Common Stock issuable upon such conversion
before giving effect to such adjustment.

 

(j)          If, at any time or from time to time while this Warrant is
outstanding any event occurs of the type contemplated by the provisions of this
Section 3 but not expressly provided for by such provisions (including the
granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s Board of Directors will make an appropriate
adjustment in the Warrant Exercise Price so as to protect the rights of the
holder; provided that no such adjustment will increase the Warrant Exercise
Price as otherwise determined pursuant to this Section 3.

 

4.          Notice of Adjustments. Whenever the Warrant Exercise Price or the
number of shares of Common Stock purchasable hereunder shall be adjusted
pursuant to Section 3 above, the Company shall deliver a written notice, setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Warrant Exercise Price and the number of shares of Common Stock purchasable
hereunder after giving effect to such adjustment, and shall use commercially
reasonable efforts to cause copies of such notice to be delivered to the Holder
of this Warrant within three (3) Business Days after the occurrence of the event
resulting in such adjustment at such Holder’s last known address in accordance
with Section 10 hereof.

 

7

 

 

5.          Fractional Shares. No fractional shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional shares, the number
of shares of Common Stock to be issued shall be rounded up to the nearest whole
number.

 

6.          Compliance with Securities Act of 1933; Transfer of Warrant or
Shares.

 

(a)          Compliance with Securities Act of 1933. The Holder of this Warrant,
by acceptance hereof, agrees that this Warrant, the Warrant Shares and the
capital stock issuable upon conversion of the Warrant Shares (collectively, the
“Securities”) are being acquired for investment and that such holder will not
offer, sell, transfer or otherwise dispose of the Securities except under
circumstances which will not result in a violation of the Securities Act of
1933, as amended (the “Securities Act”) and any applicable state securities
laws. Upon exercise of this Warrant, unless the Warrant Shares being acquired
are registered under the Securities Act and any applicable state securities laws
or an exemption from such registration is available, the Holder hereof shall
confirm in writing that the Warrant Shares so purchased are being acquired for
investment and not with a view toward distribution or resale in violation of the
Securities Act and shall confirm such other matters related thereto as may be
reasonably requested by the Company. The Warrant Shares (unless registered under
the Securities Act and any applicable state securities laws) shall be stamped or
imprinted with a legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY 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.

 

Such legend shall be removed by the Company, upon the request of a Holder, at
such time as the restrictions on the transfer of the applicable security shall
have terminated.

 

(b)          Transferability of the Warrant. Subject to compliance with Section
7(c) below, which provisions are intended to ensure compliance with applicable
federal and states securities laws, the Securities may be transferred by the
Holder hereof, in whole or in part and from time to time.

 

(c)          Method of Transfer. With respect to any offer, sale, transfer or
other disposition of the Securities, the Holder hereof shall prior to such
offer, sale, transfer or other disposition:

 

(i)          surrender this Warrant or certificate representing Warrant Shares
at the principal executive offices of the Company or provide evidence reasonably
satisfactory to the Company of the loss, theft or destruction of this Warrant or
certificate representing Warrant Shares and an indemnity agreement reasonable
satisfactory to the Company,

 

(ii)         pay any applicable transfer taxes or establish to the satisfaction
of the Company that such taxes have been paid,

 

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(iii)        deliver a written assignment to the Company in substantially the
form attached hereto as Exhibit B or appropriate stock power duly completed and
executed prior to transfer, describing briefly the manner thereof, and

 

(iv)        deliver a written opinion of such Holder’s counsel, or other
evidence, if reasonably requested by the Company, to the effect that such offer,
sale, transfer or other disposition may be effected without registration or
qualification (under the Securities Act as then in effect and any applicable
state securities law then in effect) of the Securities.

 

As soon as reasonably practicable after receiving the items set forth above, the
Company shall notify the Holder that it may sell, transfer or otherwise dispose
of the Securities, all in accordance with the terms of the notice delivered to
the Company. If a determination has been made pursuant to this Section 7(c) that
the opinion of counsel for the Holder or other evidence is not reasonably
satisfactory to the Company, the Company shall so notify the Holder promptly
with details of such determination. Notwithstanding the foregoing, the
Securities may, as to such federal laws, be offered, sold or otherwise disposed
of in accordance with Rule 144 under the Securities Act if the Company satisfied
the provisions thereof and provided that the Holder shall furnish such
information as the Company may reasonably request to provide a reasonable
assurance that the provisions of Rule 144 have been satisfied. Each certificate
representing this Warrant or Warrant Shares thus transferred (except a transfer
pursuant to Rule 144 or an effective registration statement) shall bear a legend
as to the applicable restrictions on transferability in order to ensure
compliance with applicable federal and state securities laws, unless in the
aforesaid opinion of counsel to the Holder and to the reasonable satisfaction of
the Company, such legend is not required in order to ensure compliance with such
laws. Upon any partial transfer of this Warrant, the Company will issue and
deliver to such new holder a new warrant (in form and substance similar to this
Warrant) with respect to the portion transferred and will issue and deliver to
the Holder a new warrant (in form and substance similar to this Warrant) with
respect to the portion not transferred as soon as possible and in any event
within five (5) Business Days after such transfer.

 

7.          No Rights as Shareholders; Information. Prior to exercise of this
Warrant, the Holder of this Warrant, as such, shall not be entitled to vote the
Warrant Shares or receive dividends on or be deemed the holder of such shares,
nor shall anything contained herein be construed to confer upon the Holder of
this Warrant, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until this Warrant shall
have been exercised and the shares of Common Stock purchasable upon the exercise
hereof shall have become deliverable, as provided herein.

 

8.          Modification and Waiver; Effect of Amendment or Waiver. This Warrant
and any provision hereof may be modified, amended, waived, discharged or
terminated only by an instrument in writing, designated as an amendment to this
Warrant and executed by a duly authorized officer of the Company and the Holder
of this Warrant. Any waiver or amendment effected in accordance with this
Section 9 shall be binding upon the Holder, each future holder of this Warrant
or of any shares purchased under this Warrant (including securities into which
such shares have been converted) and the Company.

 

9

 

 

9.          Notices. Any notice, request, communication or other document
required or permitted to be given or delivered to the Holder hereof or the
Company shall be delivered by personal delivery, or shall be sent by certified
United States mail, first-class postage prepaid or by overnight delivery using a
nationally recognized courier service, to each such holder at its address as
shown on the books of the Company or to the Company at the address first set
forth above in this Warrant. All such notices, requests, communications or other
documents shall be deemed to have been received by the recipient: (i) in the
case of personal delivery, on the date of such delivery, (ii) in the case of
delivery by a nationally recognized courier service, on the next Business Day
subsequent to deposit with the courier and (iii) in the case of mailing, on the
fourth Business Day following the date of deposit in the United States mails,
first-class postage prepaid. The Company will give written notice to the holder
of this Warrant at least ten (10) Business Days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any recapitalization, reorganization, reclassification,
consolidation, merger, self tender offer for all or substantially all shares of
Common Stock, sale of all or substantially all of the Company’s assets to
another Person or other transaction that is effected in such a way that holders
of Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock (an “Organic Change”), dissolution or liquidation, provided that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder to the extent it is material
non-public information.  The Company will also give written notice to the holder
of this Warrant at least ten (10) Business Days prior to the date on which any
Organic Change, dissolution or liquidation will take place, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder to the extent it is material
non-public information.

 

10.         Successors. The obligations of the Company relating to the Warrant
Shares shall inure to the benefit of the successors and assigns of the Holder
hereof and shall be binding upon any successor entity. Upon such event, the
successor entity shall assume the obligations of this Warrant, and this Warrant
(or any substitute warrant as provided hereinbefore) shall be exercisable for
the securities, cash and property of the successor entity on the terms provided
herein.

 

11.         Lost Warrants or Stock Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity agreement reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such mutilated Warrant or stock certificate, the
Company will issue and deliver a new warrant (containing the same terms as this
Warrant) or stock certificate, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.

 

12.         Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The language in this Warrant shall be
construed as to its fair meaning without regard to which party drafted this
Warrant.

 

13.         Governing Law; Jurisdiction. This Warrant shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of Nevada, without reference to principles governing
choice or conflicts of laws. Each party hereby agrees to submit any dispute
under this Warrant to arbitration in accordance with the Services Agreement and
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City and County of Los Angeles, California for the entry
of any judgment from such arbitration, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such arbitrator or court, that
such proceeding is brought in an inconvenient forum or that the venue of such
proceeding is improper. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law.

 

10

 

 

14.         WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO A JURY IN ANY LEGAL PROCEEDING ARISING OUT OR A
RELATED TO THIS AGREEMENT, THE NOTE, AND THE SECURITY AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY.

 

15.         Entire Agreement. This Warrant constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and supersedes all prior and contemporaneous agreements,
representations, and undertakings of the parties, whether oral or written, with
respect to such subject matter.

 

16.         No Impairment. The Company will not, by an voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but will at all times
in good faith assist in carrying out all the provisions of this Warrant and in
the taking of all such actions as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against impairment.

 

17.         Issue Taxes. The Company shall pay any and all issue and other taxes
payable in respect of any issue or delivery of Common Stock upon the exercise of
this Warrant that may be imposed under the laws of the United States of America
or by any state, political subdivision or taxing authority of the United States
of America; provided, however, that the Company shall not be required to pay any
tax or taxes that may be payable in respect of any transfer involved in the
issue or delivery of any Warrant or certificates for Common Stock in a name
other than that of the registered holder of such Warrant (which shall be treated
as a transfer under Section 7 above), and no such issue or delivery shall be
made unless and until the person or entity requesting the issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

18.         Severability. In the event that any one or more of the provisions
contained in this Warrant shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such provision(s) shall be ineffective only to the
extent of such invalidity, illegality or unenforceability, without invalidating
the remainder of such provision or the remaining provisions of this Warrant and
such invalidity, illegality or unenforceability shall not affect any other
provision of this Warrant, which shall remain in full force and effect.

 

19.         Counterparts. This Warrant may be executed in two or more
counterparts, each of which shall be an original, and all of which together
shall constitute one instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be duly
executed as of the date first written above by its duly authorized officers.

 

CELLTECK, INC.   a Nevada corporation         By: /s/ Nikolas Konstant   Name:
Nikolas Konstant   Title: Chairman  

 

11

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

To:   CELLTECK, INC. (the “Company”)

 

The undersigned hereby exercises the right to purchase___________________ of the
shares of Common Stock (“Warrant Shares”) of the Company, evidenced by the
attached Warrant (the “Warrant”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.

 

1.          Form of Warrant Exercise Price.  The holder intends that payment of
the Warrant Exercise Price shall be made as:

 

  a “Cash Exercise” with respect to ______________ Warrant Shares.

 

2.          Payment of Warrant Exercise Price.  In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the aggregate Exercise Price in the
sum of $_______________ to the Company in accordance with the terms of the
Warrant.

 

3.          Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name or names as are specified
below:

 

  (Name)   (Address)   (City, State)

  

4.          The undersigned represents that the aforesaid shares 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, all except as in
compliance with applicable securities laws, and that the undersigned is an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended.

 

_______________     (Date)   (Signature)           NOTICE: Signature must be
guaranteed by a commercial bank or trust company or a member firm of a major
stock exchange if shares of capital stock are to be issued, or securities are to
be delivered, other than to or in the name of the registered holder of this
Warrant. In addition, signature must correspond in all respects with the name as
written upon the face of the Warrant in every particular without alteration or
any change whatever.

 

 

 

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned holder of the attached Warrant hereby sells,
assigns and transfers unto _______________________ whose address is
_______________________________________ and whose taxpayer identification number
is _________________ the undersigned’s right, title and interest in and to the
Warrant issued by Cellteck, Inc., a Nevada corporation (the “Company”) to
purchase _______ shares of the Company’s Common Stock, and does hereby
irrevocably constitute and appoint __________________________ attorney to
transfer said Warrant on the books of the Company with full power of
substitution in the premises.

 

In connection with such sale, assignment, transfer or other disposition of this
Warrant, the undersigned hereby confirms that:

 

¨such sale, transfer or other disposition may be effected without registration
or qualification (under the Securities Act as then in effect and any applicable
state securities law then in effect) of this Warrant or the shares of capital
stock of the Company issuable thereunder and has attached hereto a written
opinion of the undersigned’s counsel to that effect; or

 

¨such sale, transfer or other disposition has been registered under the
Securities Act of 1933, as amended, and registered and/or qualified under all
applicable state securities laws.

 

_______________

(Date)

 

      (Signature)       NOTICE: Signature must correspond in all respects with
the name as written upon the face of the Warrant in every particular without
alteration or any change whatever.