EX-4.2






Exhibit 4.2




EXECUTION COPY




CYCLACEL PHARMACEUTICALS, INC.




Series II Warrant To Purchase Common Stock




Series II Warrant No.:                     

Number of Shares of Common Stock:                     

Date of Issuance: July 29, 2009 (“Issuance Date”)




          Cyclacel Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[INVESTOR NAME], the registered holder hereof or its permitted assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon surrender of this Series II Warrant to Purchase Common Stock
(including any Series II Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, the “Warrant”), at any time or times on or after the date that is one-hundred
eighty (180) days after the date hereof (the “Exercisability Date”), but not after 11:59 p.m., New
York time, on the Expiration Date (as defined below), [___(___)] fully paid
nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as
otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 15. This Warrant is the Series II Warrant to purchase Common Stock (this “Series
II Warrant”) issued pursuant to (i) Section 2 of that certain Subscription Agreement (the
“Subscription Agreement”), dated as of July 23, 2009 (the “Subscription Date”), by and between the
Company and the Holder (the “Subscription Agreement”) and (ii) the Company’s Registration Statement
on Form S-3 (File number 333-140034) (the “Registration Statement”).




     1. EXERCISE OF SERIES II WARRANT.



               (a) Mechanics of Exercise. Subject to the terms and conditions hereof, this Series II
Warrant may be exercised by the Holder on any day on or after the Exercisability Date, in whole or
in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the
“Exercise Notice”), of the Holder’s election to exercise this Series II Warrant and (ii) (A)
payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number
of Warrant Shares as to which this Series II Warrant is being exercised (the “Aggregate Exercise
Price”) in cash or by wire transfer of immediately available funds or (B) provided the conditions
for cashless exercise set forth in Section 1(d) are satisfied, by notifying the Company
that this Series II Warrant is being exercised pursuant to a Cashless Exercise (as defined in
Section 1(d)). The Holder shall not be required to deliver the original Series II Warrant
in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same effect as cancellation of the
original Series II Warrant and issuance of a new Series II Warrant evidencing the right to purchase
the remaining number of Warrant Shares. On or before the first (1st) Business Day
following the date on which the Company has received each of the Exercise Notice and the Aggregate
Exercise Price (or notice of a Cashless Exercise) (the “Exercise Delivery Documents”), the Company
shall transmit by facsimile an acknowledgment of



 









 




confirmation of receipt of the Exercise Delivery Documents to the Holder and American Stock Transfer & Trust
Company (the Company’s “Transfer Agent”). On or before the third (3rd) Business Day
following the date on which the Company has received all of the Exercise Delivery Documents (the
“Share Delivery Date”), the Company shall (X) provided that the Transfer Agent is participating in
The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request
of the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its
Deposit/Withdrawal At Custodian system, or (Y) if the Transfer Agent is not participating in the
DTC Fast Automated Securities Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery
Documents, the Holder shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Series II Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date
of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Series
II Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and
the number of Warrant Shares represented by this Series II Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall
as soon as practicable and in no event later than three (3) Business Days after any exercise and at
its own expense, issue a new Series II Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares purchasable immediately prior to
such exercise under this Series II Warrant, less the number of Warrant Shares with respect to which
this Series II Warrant is exercised. No fractional shares of Common Stock are to be issued upon
the exercise of this Series II Warrant, but rather the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole number. In the event the Registration Statement is
not effective at the time this Series II Warrant is exercised, there is no circumstance that would
require the Company to net cash settle this Series II Warrant. The Company shall pay any and all
transfer taxes which may be payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Series II Warrant.




               (b) Exercise Price. For purposes of this Series II Warrant, “Exercise Price” means
$1.00, subject to adjustment as provided herein.



               (c) Company’s Failure to Timely Deliver Securities. If the Company shall fail for any
reason or for no reason to issue to the Holder within three (3) Business Days of receipt of the
Exercise Delivery Documents in compliance with the terms of this Section 1, a certificate
for the number of shares of Common Stock to which the Holder is entitled and register such shares
of Common Stock on the Company’s share register or to credit the Holder’s balance account with DTC
for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Series II Warrant, and if on or after such Trading Day the Holder purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business Days
after the Holder’s written request and in the Holder’s discretion, either (i) pay cash to the
Holder in an amount equal to the Holder’s total



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purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing such Warrant Shares
and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date
of exercise.




               (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, if
a registration statement covering the Warrant Shares that are the subject of the Exercise Notice
(the “Unavailable Warrant Shares”), or an exemption from registration, is not available for the
resale of such Unavailable Warrant Shares, the Holder may, in its sole discretion, exercise this
Series II Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the “Net Number” of shares of Common Stock
determined according to the following formula (a “Cashless Exercise”):



               Net
Number = (A x B) - (A x C)




    B



               For purposes of the foregoing formula:




	 	A=	 	the total number of shares with respect to which
this Series II Warrant is then being exercised.
	 
	 	B=	 	the arithmetic average of the Closing Sale Prices
of the shares of Common Stock for the five (5) consecutive Trading
Days ending on the date immediately preceding the date of the
Exercise Notice.
	 
	 	C=	 	the Exercise Price then in effect for
the applicable Warrant Shares at the time of such
exercise.





               (e) Rule 144. For purposes of Rule 144(d) promulgated under the Securities Act, as in
effect on the date hereof, assuming the Holder is not an affiliate of the Company, it is intended
that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the
date this Series II Warrant was originally issued pursuant to the Subscription Agreement.



               (f) Disputes. In the case of a dispute as to the determination of the Exercise Price
or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder
the number of Warrant Shares that are not disputed.



               (g) Beneficial Ownership. The Company shall not effect the exercise of this Series II
Warrant, and the Holder shall not have the right to exercise this Series II Warrant, to the extent
that after giving effect to such exercise, such Person (together with such Person’s affiliates)
would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the



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shares of Common Stock outstanding immediately after giving effect to such exercise. For
purposes of the foregoing sentence, the aggregate number of shares of Common Stock
beneficially owned by such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Series II Warrant with respect to which the determination of
such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon
(i) exercise of the remaining, unexercised portion of this Series II Warrant beneficially owned by
such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such Person and its affiliates
(including, without limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation contained herein.
Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). For purposes of this Series II Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in the most recent of (1) the Company’s most recent Form 10-K, Form 10-Q,
Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as
the case may be, (2) a more recent public announcement by the Company or (3) any other notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
For any reason at any time, upon the written or oral request of the Holder, the Company shall
within two (2) Business Days confirm to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this
Series II Warrant, by the Holder and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may
from time to time increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% specified in such notice; provided that (i) any such increase will not be effective until
the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any
such increase or decrease will apply only to the Holder. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 1(h) to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended beneficial ownership limitation herein contained or to make changes
or supplements necessary or desirable to properly give effect to such limitation.




     2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and
the number of Warrant Shares shall be adjusted from time to time as follows:



               (a) Adjustment upon Subdivision or Combination of Common Stock. If the Company at any
time on or after the Subscription Date subdivides (by any stock split, stock dividend,
recapitalization, reorganization, scheme, arrangement or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. If the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, recapitalization, reorganization, scheme,
arrangement or otherwise) one or more classes of its outstanding shares



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of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to
such combination will be proportionately increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(a) shall become effective at the close of business on
the date the subdivision or combination becomes effective.




               (b) Other Events. If any event occurs of the type contemplated by the provisions of
this Section 2 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights or phantom stock rights), then the Company’s
Board of Directors will make an appropriate adjustment in the Exercise Price and the number of
Warrant Shares so as to protect the rights of the Holder; provided that no such adjustment pursuant
to this Section 2(b) will increase the Exercise Price or decrease the number of Warrant
Shares as otherwise determined pursuant to this Section 2.



     3. RIGHTS UPON DISTRIBUTION OF ASSETS.



               (a) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Series II
Warrant) shall have received or become entitled to receive, without payment therefore.



                    (i) Common Stock or any shares of stock or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution (other than a dividend or distribution covered in Section
2(a) above);



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



                    (iii) Common Stock or additional stock or other securities or property (including cash)
by way of spinoff, split-up, reclassification, combination of shares or similar corporate
rearrangement (other than shares of Common Stock pursuant to Section 2(a) above),
then and in each such case, the Holder hereof will, upon the exercise of this Series II
Warrant, be entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration therefor, the
amount of stock and other securities and property (including cash in the cases referred to
in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercise
had such Holder been the holder of record of such Common Stock as of the date on which
holders of Common Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.



               (b) Upon the occurrence of each adjustment pursuant to this Section 3, the Company at
its expense will, at the written request of the Holder, promptly compute such adjustment in
accordance with the terms of this Series II Warrant and prepare a certificate setting forth such
adjustment, including a statement of the adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Series II Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts upon which such



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adjustment is based. Upon written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer agent.




     4. FUNDAMENTAL TRANSACTIONS. The Company shall not enter into or be party to a
Fundamental Transaction unless the Successor Entity assumes this Series II Warrant in accordance
with the provisions of this Section 4, including agreements to deliver to each holder of
Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Series II Warrant, including,
without limitation, an adjusted exercise price equal to the value for the shares of Common Stock
reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number
of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Series II Warrant (without regard to any limitations on the exercise of this
Series II Warrant) prior to such Fundamental Transaction, and satisfactory to the Holder. Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental Transaction, the provisions of
this Series II Warrant referring to the ”Company” shall refer instead to the Successor Entity), and
may exercise every right and power of the Company and shall assume all of the obligations of the
Company under this Series II Warrant with the same effect as if such Successor Entity had been
named as the Company herein. In addition to and not in substitution for any other rights
hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of
shares of Common Stock are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon an exercise of
this Series II Warrant at any time after the consummation of the Fundamental Transaction but prior
to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash,
assets or other property) purchasable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of such Fundamental Transaction had the Warrant been
exercised immediately prior to such Fundamental Transaction. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the consideration it receives upon any exercise of
this Series II Warrant following such Fundamental Transaction. The provisions of this Section
4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied without regard to any limitations on the exercise of this Series II Warrant.



     5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will
not, by amendment of its Certificate of Incorporation, Bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Series II Warrant, and will at all times in good faith comply with all the
provisions of this Series II Warrant and take all actions consistent with effectuating the purposes
of this Series II Warrant. Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Common Stock receivable upon the exercise of this
Series II Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may
be necessary or appropriate in order that the Company may



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validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this
Series II Warrant, and (iii) shall, so long as this Series II Warrant is outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued shares of
Common Stock, solely for the purpose of effecting the exercise of this Series II Warrant, 100%
of the number of shares of Common Stock issuable upon exercise of this Series II Warrant then
outstanding (without regard to any limitations on exercise).




     6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person’s capacity as a holder of this Series II Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Series II Warrant be construed to
confer upon the Holder, solely in such Person’s capacity as the Holder of this Series II Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which
such Person is then entitled to receive upon the due exercise of this Series II Warrant. In
addition, nothing contained in this Series II Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this Series II Warrant or
otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company.



     7. REISSUANCE OF WARRANTS.



               (a) Transfer of Warrant. If this Series II Warrant is to be transferred, the Holder
shall surrender this Series II Warrant to the Company and deliver the completed and executed
Assignment Form, in the form attached hereto as Exhibit B, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Series II Warrant (in accordance
with Section 7(d)), registered as the Holder may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if less then the total
number of Warrant Shares then underlying this Series II Warrant is being transferred, a new Series
II Warrant (in accordance with Section 7(d)) to the Holder representing the right to
purchase the number of Warrant Shares not being transferred.



               (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Series
II Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon surrender and
cancellation of this Series II Warrant, the Company shall execute and deliver to the Holder a new
Series II Warrant (in accordance with Section 7(d)) representing the right to purchase the
Warrant Shares then underlying this Series II Warrant.



               (c) Exchangeable for Multiple Warrants. This Series II Warrant is exchangeable, upon
the surrender hereof by the Holder at the principal office of the Company, for a new Series II
Warrant or Series II Warrants (in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying this Series II
Warrant, and each such new Series II Warrant will represent the right to purchase such portion of



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such Warrant Shares as is designated by the Holder at the time of such surrender; provided,
however, that no Warrants for fractional shares of Common Stock shall be given. Notwithstanding
anything to the contrary herein, in no event shall the original Series II Warrant
be subdivided into more than three (3) separate Series II Warrants and such new Series II
Warrants shall not be further subdivided.




               (d) Issuance of New Series II Warrants. Whenever the Company is required to issue a
new Series II Warrant pursuant to the terms of this Series II Warrant, such new Series II Warrant
(i) shall be of like tenor with this Series II Warrant, (ii) shall represent, as indicated on the
face of such new Series II Warrant, the right to purchase the Warrant Shares then underlying this
Series II Warrant (or in the case of a new Series II Warrant being issued pursuant to Section
7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to
the number of shares of Common Stock underlying the other new Series II Warrants issued in
connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Series II Warrant), (iii) shall have an issuance date, as indicated on the face of such new Series
II Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and
conditions as this Series II Warrant.



     8. NOTICES. Whenever notice is required to be given under this Series II Warrant,
unless otherwise provided herein, such notice shall be given in accordance with Section 7
of Annex I to the Subscription Agreement.



     9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this
Series II Warrant may be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has obtained the written
consent of the Holder.



     10. GOVERNING LAW. This Series II Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Series II Warrant shall be governed by, the internal laws of
the State of New York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.



     11. CONSTRUCTION; HEADINGS. This Series II Warrant shall be deemed to be jointly
drafted by the Company and the Holder and shall not be construed against any person as the drafter
hereof. The headings of this Series II Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Series II Warrant.



     12. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of
receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If
the Holder and the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall, within two (2)
Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an



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independent, reputable investment bank selected by the Company and approved by the Holder, which
approval shall not be unreasonably withheld, or (b) the disputed arithmetic calculation of the
Warrant Shares to the Company’s independent, outside accountant. The Company shall
cause the investment bank or the accountant, as the case may be, to perform the determinations
or calculations and notify the Company and the Holder of the results no later than ten Business
Days from the time it receives the disputed determinations or calculations. The prevailing party
in any dispute resolved pursuant to this Section 12 shall be entitled to the full amount of all
reasonable expenses, including all costs and fees paid or incurred in good faith, in relation to
the resolution of such dispute. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent demonstrable error.




     13. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Series II Warrant shall be cumulative and in addition to all other remedies
available under this Series II Warrant, at law or in equity (including a decree of specific
performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder
to pursue actual damages for any failure by the Company to comply with the terms of this Series II
Warrant.



     14. TRANSFER. Subject to applicable laws and the restrictions on transfer set forth
in the Subscription Agreement, this Series II Warrant may not be offered for sale, sold,
transferred or assigned without the consent of the Company, such consent not to be unreasonably
withheld or delayed.



     15. CERTAIN DEFINITIONS. For purposes of this Series II Warrant, the following terms
shall have the following meanings:



               (a) “Bloomberg” means Bloomberg Financial Markets.



               (b) “Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain closed.



               (c) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price, as
the case may be, then the last bid price or the last trade price, respectively, of such security
prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the last closing bid price
or last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot



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be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price
or the Closing Sale Price, as the case may be, of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder. All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock combination or other
similar transaction during the applicable calculation period.




               (d) “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.001 per share,
and (ii) any share capital into which such Common Stock shall have been changed or any share
capital resulting from a reclassification of such Common Stock.



               (e) “Convertible Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for shares of Common Stock.



               (f) “Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., The
American Stock Exchange, The NASDAQ Global Market or The NASDAQ Capital Market.



               (g) “Expiration Date” means the date five (5) years following the Issuance Date or, if such
date falls on a day other than a Business Day or on which trading does not take place on the
Principal Market (a “Holiday"), the next date that is not a Holiday.



               (h) “Fundamental Transaction” means that the Company shall, directly or indirectly, in one or
more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Person (but excluding a migratory merger effected solely for the
purpose of changing the jurisdiction of incorporation of the Company), or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than the 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the Person or Persons making or party to,
or associated or affiliated with the Persons making or party to, such purchase, tender or exchange
offer), or (iv) consummate a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or party to, such
stock purchase agreement or other business combination), (v) reorganize, recapitalize or reclassify
its Common Stock, or (vi) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting
power represented by issued and outstanding Common Stock.



               (i) “Options” means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.



10









 





               (j) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the
applicable Person and whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the
Fundamental Transaction.



               (k) “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.



               (l) “Principal Market” means The NASDAQ Global Market.



               (m) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected
by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered
into.



               (n) “Trading Day” means any day on which the Common Stock are traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock are then traded;
provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are
suspended from trading during the final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York time).



[Signature Page Follows]




11









 








     IN WITNESS WHEREOF, the Company has caused this Series II Warrant to Purchase Common Stock to
be duly executed as of the Issuance Date set out above.



	 	 	 	 	 
	 	CYCLACEL PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Spiro Rombotis
 	 
	 	 	Name:  	Spiro Rombotis 	 
	 	 	Title:  	President & CEO 	 



 









 






	 	 	 	 	 



EXHIBIT A




EXERCISE NOTICE




TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




CYCLACEL PHARMACEUTICALS, INC.





     The undersigned holder hereby exercises the right to purchase                      of the shares
of Common Stock (“Warrant Shares”) of Cyclacel Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), evidenced by the attached Series II Warrant to Purchase Common Stock (the “Series II
Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Series II Warrant.



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



                                   a
“Cash Exercise” with respect to                      Warrant
Shares; and/or




                                   a
“Cashless Exercise” with respect to                      Warrant
Shares.




     2. Payment of 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 Series II Warrant.



     3. Delivery of Warrant Shares. The Company shall deliver to the holder                     
Warrant Shares in accordance with the terms of the Series II Warrant and, after delivery of such
Warrant Shares,                      Warrant Shares remain subject to the Series II Warrant.



Date:                                          ___,                     




 


Name of Registered Holder



	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



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ACKNOWLEDGMENT





     The Company hereby acknowledges this Exercise Notice and hereby directs American Stock
Transfer & Trust Company to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated July ___, 2009 from the Company and
acknowledged and agreed to by American Stock Transfer & Trust Company.



	 	 	 	 	 
	 	CYCLACEL PHARMACEUTICALS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-2









 






	 	 	 	 	 



EXHIBIT B




ASSIGNMENT FORM




CYCLACEL PHARMACEUTICALS, INC.





     (To assign the foregoing Series II Warrant, execute this form and supply required information.
Do not use this form to purchase shares.)



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



	 	 	 
	Name:
	 	 
	 

	 	 

(Please Print)
	Address:
	 	 
	 

	 	 

(Please Print)
	Dated:                     ___, ___
	 	 
	Holder’s Signature:                         
	 	 
	Holder’s Address:                         
	 	 





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





B-1