Document:

Engagement Agreement

 Exhibit 10.10 
  
 CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 
  
 Engagement Agreement 
  
 TRANSGENOMIC Inc. (together with its subsidiaries and affiliates the “COMPANY”) 
  
 The parties to this Engagement Agreement (the “Agreement”) include Goldsmith, Agio, Helms Securities, Inc. (“GAHS”) on the one hand, and the COMPANY
on the other hand. This is to confirm the COMPANY’s retention of GAHS for
[                                        
        ] from the date hereof (the “Minimum Term”), as its exclusive financial advisor to assist it with a merger, sale, or any similar transaction related to the COMPANY’s Synthetic Nucleic
Acid Business Unit, (including both the Boulder, Colorado, site and the Glasgow, Scotland, site) (the “SNABU”). After
[                        ], GAHS will proceed on such basis as is reasonably agreed upon between the parties or on a holdover
basis until either GAHS or the COMPANY provides the other with written 30-day notice of termination of this Agreement. 
  

	1.	GAHS’s Performance. Throughout the course of its engagement, GAHS and the COMPANY will follow all Process Guidelines set forth in Exhibit A.

  

	2.	Types of Transactions Covered. Transactions covered under this Agreement (individually, a “Transaction” and collectively, “Transactions”) include
any sale, exchange or other disposition of all or a material (more than 10 percent) portion of the SNABU, whether accomplished by a sale of assets or stock by or through the COMPANY and/or the Shareholders (whether effected in one Transaction or a
series of Transactions), and shall include without limitation any merger, tender or exchange offer, joint venture, equity investment, recapitalization, or any other Transaction, the effect of which is to change the financial structure, control or
ownership of the SNABU. If a Transaction is completed during the term of this Agreement, GAHS shall be entitled to its Accomplishment Fee provided herein. 

  

	3.	Equitable Protection Period. If, during the term of this Agreement,
[                                        
                    
                                        
                                ] the COMPANY or its Shareholders enter into an agreement
in principle to consummate a Transaction with a GAHS Prospect as defined below, GAHS’s Accomplishment Fee shall be due and payable in full upon closing of such Transaction pursuant to Paragraph 5 below. For purposes of this Agreement,
“GAHS Prospect” includes any party or parties (i) that execute a Confidentiality Agreement pertaining to the sales process contemplated hereby; (ii) that GAHS actually contacts, as evidenced by GAHS’s correspondence records, and the
party, at that time, is not interested in pursuing a Transaction as is documented by the sending or receipt of written documentation that evidences said non-interest; (iii) that GAHS proposes in good faith to contact but, at the COMPANY’s
request, does not approach; (iv) with which the COMPANY or its Shareholders have any discussions relative to a possible Transaction during the term of this Agreement or the one-year period prior to the date of this Agreement; or (v) who participate
in a Transaction wherein the services of GAHS are utilized by the COMPANY or its Shareholders. GAHS Prospects include all affiliates of a “GAHS Prospect” as defined above. The COMPANY agrees to provide GAHS with the names and key contacts
of all parties who have contacted the COMPANY or its Shareholders or whom the COMPANY or its Shareholders have contacted relative to a possible Transaction in the one-year term prior to the date of this Agreement. 

  

	4.	Accomplishment Fee and Total Consideration. The amount payable by COMPANY to GAH at closing of a Transaction (the “Accomplishment Fee”) shall be calculated
as provided below
[                                        
            ] 

  
  
 GAHS’s Accomplishment Fee shall be based upon the total consideration (“Total Consideration”) paid or payable
to the COMPANY, its shareholders, employees or other security holders in connection with, or in anticipation of, the Transaction, including amounts placed in escrow, and shall include without limitation: 
  

	 	(a)	Cash paid and securities transferred to the COMPANY and/or holders of its securities at closing, including the cash value of any outstanding stock options or warrants, whether
vested or not, that are “rolled over” or “cashed out” as part of this Transaction; 

  

	 	(b)	In the case of a sale of stock by the COMPANY’s shareholders, all liabilities of the COMPANY, other than trade payables, operating leases and operating expenses accrued in the
ordinary course of business. In the case of a sale of assets, all liabilities of the COMPANY, other than trade payables, intercompany debt and accrued operating expenses, which are assumed by the buyer; 

  

	 	(c)	The net present value (applying a discount rate equal to the then prevailing prime rate as quoted in The Wall Street Journal) of scheduled payments provided for in any leases
by the purchaser of assets owned and retained by the COMPANY, its shareholders, or any affiliates thereof; 

  

	 	(d)	The principal amount of deferred installments of the purchase price including promissory notes; 

  

	 	(e)	Amounts payable under consulting agreements, above-market employment contracts, above non-compete agreements or similar arrangements; 

  

	 	(f)	Future payments that are contingent on the future earnings or operations of the SNABU (or in the case of an asset sale, the underlying assets), with the value of such payments
included in Total Consideration based on the present value of the reasonably expected amount of such contingent payments based on COMPANY projections or in the absence of projections, as determined in good faith by the COMPANY and GAHS, utilizing a
12 percent per annum discount rate; 

  

	 	(g)	The value of any retained or acquired interest in the SNABU or its successor, or the right to acquire such interest. 

  

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	5.	Payment of Accomplishment Fee. Except as otherwise provided below, the Accomplishment Fee shall be paid to GAHS or its assigns in cash via wire transfer at the time of
closing a Transaction. In the event that all or a portion of the Total Consideration includes securities or other property (other than installment notes), the portion of GAHS’s Accomplishment Fee attributable thereto shall be payable at closing
in cash, based on the fair market value of such non-cash items as determined by mutual agreement of the parties. In the event the parties are unable to agree on the fair market value, GAHS shall have the option to receive payment in like kind or to
cause an independent appraiser acceptable to the COMPANY to determine fair market value; the expense of the appraisal shall be shared equally by the parties. 

  

	6.	Consulting Fees and Expenses. The COMPANY shall pay to GAHS a cash consulting fee of $60,000, payable as follows: $15,000 monthly in advance for the term of this
Agreement. Any amounts actually paid to GAHS as consulting fees will be offset against any Accomplishment Fee. The COMPANY also shall reimburse GAHS monthly in arrears for all reasonable out-of-pocket expenses incurred on behalf of the COMPANY. GAHS
will secure the COMPANY’s verbal or written authorization before incurring any expenses in excess of $500 and shall use COMPANY authorized travel agents when booking travel unless a written waiver is obtained in each instance. GAHS shall
provide detailed monthly itemized summaries of expenses for which reimbursement is requested by GAHS. The COMPANY agrees that any unpaid payment (or portion thereof) of any fee, expense, consulting fee, or other amount payable to GAHS shall bear
interest payable at the highest rate of interest permissible by law, but not to exceed 12 percent per annum, from the date that such payment is due hereunder to the date that said payment is paid in full. 

  

	7.	Indemnification and Other Matters. The COMPANY and GAHS agree to the provisions of the attached Exhibit B, which relates to indemnification and other matters and which
is in its entirety incorporated by reference herein. The COMPANY will cause the definitive merger or purchase agreement relating to a Transaction to include an “entire agreement,” “integration,” or similar clause, which in
substance provides that such agreement contains the entire agreement between the parties with respect to the Transaction and that it supersedes all prior agreements, understandings, promises, undertakings, representations, and warranties, whether
written or oral, made by the parties to one another and/or by GAHS to the buyer relating to the Transaction. 

  

	8.	Reliance. The COMPANY will furnish GAHS with such information regarding the business and financial condition of the SNABU as is reasonably requested, all of which will
be, to the best of COMPANY’s and information and belief, accurate and complete in all material respects at the time furnished. The COMPANY will promptly notify GAHS if it learns of any material misstatement in, or material omission from, any
information previously delivered to GAHS. On an ongoing basis, the COMPANY will inform GAHS of any material developments or matters that occur or come to the attention of the COMPANY, its Shareholders, directors, officers, employees or affiliates.
The COMPANY, to the best of its information and belief, represents that the information contained in the Confidential Memorandum described in Exhibit A (the “Confidential Memorandum”) will not contain any untrue statement of material fact
or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading. In performing its services hereunder, GAHS shall be entitled to rely 

 

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 without investigation upon all information that is available from public sources as well as all other
information supplied to it by or on behalf of the COMPANY or its advisors and shall not in any respect be responsible for the accuracy or completeness of, or have any obligation to verify, the same or to conduct any appraisal of assets. 

 

	9.	Arbitration. The COMPANY and GAHS agree that any dispute between them in any way relating to this Agreement (including, but not limited to, its formation,
interpretation or termination or any alleged breach hereof) shall be determined and settled by arbitration in Wilmington, Delaware, in accordance with the rules of the American Arbitration Association. All costs associated with any such disputes
(including both parties’ legal fees) shall be allocated between the parties by the arbitrators. The arbitrators shall have the power and authority to, and to the fullest extent practicable shall, abbreviate arbitration discovery in a manner
that is fair to all parties in order to expedite the conclusion of the arbitration proceeding. All decisions and awards of the arbitrators shall be final and binding on both parties and may be enforced by any court with jurisdiction.

  

	10.	Fairness Opinion. Subject to the mutual good faith written agreement of the parties and for a fee of $125,000 , GAHS shall undertake a study to enable it to render its
opinion with respect to the fairness from a financial point of view of the consideration proposed to be paid to the COMPANY or its shareholders in connection with a Transaction. 

  

	11.	Miscellaneous. All questions arising hereunder shall be determined according to the laws of the State of Delaware, except for any conflicts of laws provisions. The
parties acknowledge and agree that their respective rights and obligations are contractual in nature, that GAHS shall act as an independent contractor hereunder with duties owed solely to the COMPANY, and each party disclaims any intention to impose
fiduciary or other non-contractual obligations on the other by virtue of the engagement contemplated by this Agreement. Any advice or opinion provided by GAHS shall not be disclosed to any third party or disclosed or referred to publicly, except
with the prior written consent of GAHS. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. This Agreement incorporates the entire understanding of the parties regarding the subject matter hereof, and supersedes all previous
agreements or understandings regarding the same, whether written or oral. The provisions of this Paragraph and Paragraphs 3, 4, 5, 6, 7, 8, 9, 10 and 11 will survive the termination of this Agreement. 

  

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 Read and agreed to this 2nd day of March, 2004 by: 
  

							
	TRANSGENOMIC, INC.:	 	GOLDSMITH, AGIO, HELMS SECURITIES, INC.:
		
	
	 	

	 By:
	 	
	 	 By:
	 	  

	 Its:
	 	
	 	 Its:
	 	  

				
	 	 	 	 	 	 	  
  

	 	 	 	 	 By:
	 	  

	 	 	 	 	 Its:
	 	  

  

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 EXHIBIT A 
 to 
 Engagement Agreement 
  
 GOLDSMITH, AGIO, HELMS & LYNNER, LLC 
 and 
 Transgenomic, Inc. 
  
 PROCESS GUIDELINES 
  
 In the course of GAHS’s engagement hereunder, GAHS will exercise its commercially reasonable efforts to: 
  

	(a)	Maintain strict confidentiality of all financial and other proprietary information, data, and materials relating to the SNABU except as provided below. 

  

	(b)	Familiarize itself with the business, operations, physical assets, financial condition and prospects of the SNABU. 

  

	(c)	Develop a list of potential buyers of the SNABU whom GAHS believes in good faith to be financially qualified and potentially interested in participating in a Transaction.

  

	(d)	Not share with any GAHS Prospect the identity of the SNABU or any confidential information relating to the COMPANY unless the GAHS Prospect has executed a Confidentiality
Agreement in a form pre-approved by the COMPANY. 

  

	(e)	Contact GAHS Prospects on the COMPANY’s behalf and, as appropriate, arrange for and orchestrate meetings between GAHS Prospects and the SNABU. 

  

	(f)	Assist the COMPANY in preparation of a Confidential Memorandum describing the SNABU, and other analyses and data as may be reasonably requested by GAHS Prospects. The
Confidential Memorandum may not be reproduced or distributed to parties other than the COMPANY’s Shareholders, officers, directors, employees and representatives without GAHS’s prior written consent. 

  

	(g)	Work in the capacity outlined above with the COMPANY’s legal counsel, accountants, and other advisors as reasonably requested and directed by the COMPANY.

  

	(h)	Present to the COMPANY all proposals from GAHS Prospects, and make recommendations as to the COMPANY’s appropriate negotiating strategy and course of conduct.

  

	(i)	Assist in all negotiations and in all document review as reasonably requested and directed by the COMPANY. 

  

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	(j)	If the COMPANY requests that GAHS provide additional services not otherwise set forth in this Agreement, the COMPANY and GAHS will enter into an additional agreement that will set
forth the nature and scope of the services, appropriate compensation and other customary matters. 

  

 Page 7 

 EXHIBIT B 
 to 
 Engagement Agreement 
  
 GOLDSMITH, AGIO, HELMS & LYNNER, LLC 
 and 
 Transgenomic, Inc. 
  
 INDEMNIFICATION and OTHER MATTERS 
  

	1.)	The COMPANY agrees to indemnify and hold GAH (which term, for purposes of this paragraph, includes it, its affiliates and its and their respective directors, officers, employees,
shareholders, controlling persons, partners, and members) harmless against and from all losses, claims, damages or liabilities, and all actions, claims, proceedings and investigations in respect thereof (collectively, “Losses”), arising
out of or in connection with this engagement or the performance by GAH of services on behalf of the company, and to timely reimburse GAH for all reasonable legal and other out-of-pocket expenses as incurred by GAH in connection with investigating,
preparing to defend or defending any such Losses (including costs of GAH personnel required to testify or otherwise assist in any litigation calculated at customary per diem or hourly rates), whether or not GAH is named as a party thereto; provided,
however, that the COMPANY shall not be liable to the extent such Losses are determined by arbitration as herein provided (not subject to judicial review or appeal) to have resulted primarily and directly from GAH’s gross negligence or willful
misconduct. If such indemnification and reimbursement are insufficient or unavailable pursuant to, or as a result of, the foregoing sentence or otherwise, the COMPANY and GAH agree to make contributions to any Losses paid or payable in such
proportion as appropriately reflects the relative economic benefits received by, and fault of, the COMPANY and its Shareholders, on the one hand, and GAH, on the other hand, as well as other equitable considerations; provided, however that the
COMPANY agrees to make contributions to any Losses paid or payable such that GAH will not be liable for more than the Accomplishment Fee received by GAH pursuant to this Agreement. The COMPANY further agrees that GAH shall have no liability to the
COMPANY in excess of the Accomplishment Fee received by GAH pursuant to this Agreement. The foregoing rights to indemnification and contribution shall not limit any other rights that GAH may have at law or otherwise. The COMPANY further agrees that
without the written consent of GAH, the COMPANY will not settle or compromise any pending or threatened action, claim, proceeding, or investigation with respect to which indemnification or contribution may be sought hereunder unless such settlement
or compromise includes an unconditional release of GAH from all liability resulting from such action, claim, proceeding, or investigation. 

  

	2.)	Not later than thirty (30) days after receipt by GAHS of notice of the commencement of any action, suit or proceeding, GAHS will, if a claim in respect thereof is to be made against
the COMPANY under this Agreement, notify the COMPANY of the commencement thereof; but the omission so to notify the COMPANY will not relieve it from any liability which it may have to GAHS otherwise than under this Agreement. With respect to any
such action, suit or proceeding as to which GAHS notifies the COMPANY of the commencement thereof: 

  

	 	(a)	The COMPANY will be entitled to participate therein at its own expense; 

  

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	 	(b)	Except as otherwise provided in this section, and so long as the COMPANY has irrevocably agreed that it will indemnify GAHS for all losses with respect to such action, suit or
proceeding, the COMPANY may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense of any claims asserted pursuant to the indemnities granted GAHS under this Agreement,
with COMPANY’S chosen counsel reasonably satisfactory to GAHS. After notice from the COMPANY to GAHS of its election to assume the defense thereof, the COMPANY will not be liable to GAHS under this Agreement for any legal or other expenses
subsequently incurred by GAHS in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided in this section. GAHS shall have the right to employ separate counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from the COMPANY of its assumption of the defense thereof shall be at the expense of GAHS unless (i) the employment of counsel by GAHS has been authorized by the COMPANY, which
authorization will not be unreasonably withheld, (ii) GAHS shall have reasonably concluded as supported by its detailed written notification the COMPANY, that there is a fundamental material conflict of interest between the COMPANY and GAHS in the
conduct of the defense of such action or (iii) the COMPANY shall not in fact have employed counsel to assume the defense of such action, in each of which cases the reasonable fees and expenses of GAHS’s separate counsel shall be at the expense
of the COMPANY. The COMPANY shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the COMPANY or as to which GAHS shall have made the conclusion provided for in clause (ii) above; and

  

	 	(c)	The COMPANY shall not be liable to indemnify GAHS under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which shall
not be unreasonably withheld. 

  

	3.	Not withstanding the foregoing, no indemnity shall be paid by the COMPANY on account of any claim against GAHS solely for an accounting of profits made from the purchase or sale by
GAHS of securities of the COMPANY pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law. 

  

 Page 9Form of Warrant to Purchase Common Stock

 EXHIBIT 4.5 
  
 Date: May 21, 2004 
  
 WARRANT 
  
 WARRANT HOLDER: 
  
 WARRANT NUMBER: 

 
 NUMBER OF WARRANT SHARES: 
  
 THE WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE WARRANT AND SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS. 
  
 NORTH AMERICAN TECHNOLOGIES GROUP, INC. 
  
 Common Stock Purchase Warrant 
  
 North American Technologies Group, Inc., a Delaware corporation (the “Company”),
for value received, hereby grants to the warrant holder identified above, its successors and permitted assigns (collectively, the “Holder”), this right (the “Warrant”), subject to the terms set forth below, to purchase at the
Exercise Price (as defined in Section 1.1 below), up to                  shares of common stock, $0.001 par value per share, of the Company (the “Common
Stock”), subject to adjustment as herein provided. The total number of shares of Common Stock that may be purchased hereunder are referred to herein as the “Warrant Shares.” 
  

	 	1.	Exercise of Warrant. 

  

	 	a)	Purchase Price. The Warrant may be exercised, subject to the terms specified herein, at the purchase price of $0.60 per Warrant Share (as may be adjusted from time to time,
the “Exercise Price”), by payment of lawful money of the United States, or pursuant to the Net Exercise Provision. 

	 	b)	Exercise Period. The Warrant may be exercised at any time until 5 pm on May 21, 2007. 

  

	 	c)	Exercise in Full. Subject to the limitations stated above, this Warrant may be exercised in full at the option of the Holder by surrender of this Warrant, with the form of
subscription at the end hereof duly executed by the Holder, to the Company at its principal office in the United States, accompanied by payment in the amount obtained by multiplying the number of Warrant Shares for which this Warrant may be
exercised by the Exercise Price. 

  

	 	d)	Partial Exercise. This Warrant may be exercised in part by surrender of this Warrant in the manner and at the place provided in subsection 1.3 along with payment in the
amount determined by multiplying (a) the number of Warrant Shares designated by the Holder in the subscription at the end hereof by (b) the Exercise Price. On any such partial exercise, the Company at its expense will forthwith issue and deliver to
or upon the order of the Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the number of Warrant Shares
for which such Warrant or Warrants may still be exercised. 

  

	 	2.	Delivery of Share Certificates on Exercise. As soon as practicable after the exercise of this Warrant in full or in part, the Company, at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number
of fully paid and non-assessable Warrant Shares (or Other Securities, as defined below) to which the Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the Current Market Price (as defined above) of one full share, together with any other stock or other securities and property (including cash, where applicable) to which the Holder is entitled upon such exercise pursuant to
Section 1 or otherwise. “Other Securities” refers to any stock (other than the Warrant Shares) or other securities of the Company or any other person (corporate or otherwise) that the Holder at any time shall be entitled to receive, or
shall have received, on the exercise of this Warrant, in lieu of or in addition to the Warrant Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of the Warrant Shares, including securities of
the same class issued in exchange for or in respect of the Warrant Shares pursuant to a plan of merger, consolidation, recapitalization or reorganization, the sale of substantially all of the Company’s assets or a similar transaction.

	 	3.	Net Exercise Provision. Notwithstanding any provisions herein to the contrary, if the Common Stock is registered under the Exchange Act, and the Current Market Price
of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Registered Holder may elect to receive Warrant Shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant together with the properly endorsed Purchase Form in which event the Company shall issue the Registered Holder a number of shares of Common Stock
computed as follows: 

  

			
	 X =
	 	Y(A-B)
	 	 	     A

  

					
	 Where:
	 	X =	 	the number of shares of Common Stock to be issued to the Registered Holder.
	 	 	Y =	 	the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such
calculation)
	 	 	A =	 	the Current Market Price of one share of Common Stock (at the date of such calculation)
	 	 	B =	 	Exercise Price (as adjusted to the date of such calculation)

  

	 	4.	Covenants. 

  

	 	a)	Issuance of Shares upon Exercise. All Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. The Company will at all times have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant. The Company shall not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, issuance or sale of securities or
otherwise, avoid or take any action that would have the effect of avoiding the observance or performance of any of the terms to be observed or performed hereunder by the Company, and shall at all times in good faith assist in carrying out all of the
provisions of this Warrant. If any Warrant Shares required to be reserved for the purpose of exercise of this Warrant require registration with or approval of any governmental authority under any federal law (other than the Securities Act of 1933,
as amended (the “Securities Act”)) or under any state law, before such Warrant Shares may be issued upon exercise of this Warrant, the Company shall, at its expense, use commercially reasonable efforts to cause such Warrant Shares to be
duly registered or approved, as the case may be. 

	 	b)	Restrictions on Transfer. By acceptance of this Warrant, Holder represents to the Company that it is acquiring the Warrant for its own investment account and without a view
to the subsequent public distribution of the Warrant or Warrant Shares otherwise than pursuant to an effective registration statement under the Securities Act and applicable state securities laws. This Warrant and each certificate for Warrant Shares
issued to the Holder and any subsequent holder that have not been sold to the public pursuant to an effective registration statement under the Securities Act or as to which the restrictions on transfer have not been removed as hereinafter provided,
shall bear a restrictive legend reciting that the same have not been registered pursuant to the Securities Act and applicable state securities laws and may not be transferred in the absence of an effective registration statement under the Securities
Act. Each proposed transfer shall be accompanied by a notice which shall describe the manner of the proposed transfer and shall be accompanied by an opinion of counsel experienced in securities laws matters and reasonably acceptable to the Company
and its counsel to the effect that the proposed transfer may be effected without registration under the Securities Act, whereupon, the holder of such Warrants or Warrant Shares shall be entitled to transfer such securities in accordance with the
terms of its notice and such opinion. Restrictions imposed under this Section 3 upon the transferability of the Warrants or of Warrant Shares shall cease when: 

  

	 	1)	a registration statement covering such Warrant Shares becomes effective under the Securities Act and such Warrant Shares have been disposed of pursuant to such effective
registration statement, or 

  

	 	2)	the Company receives from the holder thereof an opinion of counsel experienced in securities laws matters, which counsel shall be reasonably acceptable to the Company, that such
restrictions are no longer required in order to insure compliance with the Securities Act. 

  
 When such restrictions terminate, the Company shall, or shall instruct the warrant agent or transfer agent, if any, to issue new securities in the name of
the holder not bearing the legends required by this Section 3. 
  

	 	4.	Adjustment for Reorganization; Consolidation or Merger. If at any time or from time to time, the Company shall (a) effect a plan of merger, consolidation,
recapitalization or reorganization or similar transaction with a corporation (the “Acquiror”) whereby the shareholders of the Company will exchange their shares of the Company for the shares of the Acquiror, or (b) transfer all or
substantially all of its properties or assets to any other person (which along with any transactions set forth in (a) hereof shall be an “Extraordinary Transaction”), then as a condition of such Extraordinary Transaction, adequate
provision will be made 

 whereby the holder of this Warrant will have the right to acquire and receive upon exercise of this
Warrant in lieu of the Warrant Shares immediately theretofore acquirable upon the exercise of this Warrant, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for the number of Warrant Shares
immediately theretofore acquirable and receivable upon exercise of this Warrant had such Extraordinary Transaction not taken place. In any such case, the Company will make appropriate provision to insure that the provisions of this Section 4 hereof
will thereafter be applicable as nearly as may be practicable in relation to any shares of stock or securities thereafter deliverable upon the exercise of this Warrant. The Company will not effect any Extraordinary Transaction unless prior to the
consummation thereof, the successor corporation (if other than the Company) assumes by written instrument the obligations under this Section 4 and the obligations to deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to acquire. 
  

	 	5.	Notices of Record Date, etc. In the event of: 

  

	 	a)	any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or 

  

	 	b)	any merger, consolidation or capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company with or into any other person, or
any transfer of all or substantially all of the assets of the Company, or 

  

	 	c)	any voluntary or involuntary dissolution, liquidation or winding-up of the Company, 

  
 then and in each such event the Company will mail or cause to be mailed to the Holder a notice specifying (a) the date on
which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (b) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of shares of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice
shall be mailed at least 30 days prior, and not more than 90 days prior, to the date specified in such notice on which any such action is to be taken. 

	 	6.	Transfers. 

  

	 	a)	The Warrants and the Warrant Shares are not transferable, in whole or in part, without compliance with the Securities Act, and any applicable state securities laws.

  

	 	b)	Subject to Section 7.1, this Warrant, or any portion hereof, may be transferred by the Holder’s execution and delivery of the form of assignment attached hereto along with this
Warrant upon reasonable prior notice to the Company. Any transferee shall be required, as a condition to the assignment, to deliver all such documentation as the Company deems appropriate. However, until such assignment and such other documentation
are presented to the Company at its principal offices in the United States, the Company shall be entitled to treat the registered holder hereof as the absolute owner hereof for all purposes. 

  

	 	c)	Upon a transfer of this Warrant in accordance with this Section 7, the Company, at its expense, will issue and deliver to or on the order of the Holder a new Warrant or Warrants of
like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, representing the aggregate number of Warrant Shares represented by the Warrant or Warrants so surrendered. If this Warrant
is divided into more than one Warrant, or if there is more than one Holder thereof, all references herein to “this Warrant” shall be deemed to apply to the several Warrants, and all references to “the Holder” shall be deemed to
apply to the several Holders, except in either case to the extent that the context indicates otherwise. 

  

	 	7.	Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant and, in the case of
any such loss, theft or destruction of any Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver in the Holder’s name in exchange and substitution for the Warrant so lost, stolen, destroyed or mutilated, a new Warrant of like tenor. 

  

	 	8.	Notices. All notices required hereunder shall be deemed to have been given and shall be effective only when personally delivered or sent by Federal Express, DHL or
other express delivery service or by certified or registered mail to the address of the Company’s principal office in the United States as follows: 

  
 North American Technologies Group, Inc. 
 14315 W. Hardy Road 
 Houston, TX 77060 
 Attention: President 

 in the case of any notice to the Company, and until changed by notice to the Company, to the address of
the Holder set forth above in the case of any notice to the Holder. 
  

	 	9.	Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated, other than on expiration, only by an instrument in writing signed by
the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of the Commonwealth of Pennsylvania. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

  
 IN WITNESS WHEREOF, the Company has caused this
Warrant to be signed by its duly authorized officer on the date set forth below. 
  

			
	NORTH AMERICAN TECHNOLOGIES GROUP, INC.
		
	By:	 	  

	 	 	Kevin C. Maddox
	 	 	President and Chief Executive Officer
		
	Date:	 	May 21, 2004

 FORM OF SUBSCRIPTION 
  
 (To be signed only on exercise of Warrant) 
  
 TO
                            : 
  
 The undersigned, the holder of the attached Warrant, hereby irrevocably elects to exercise such Warrant for, and to purchase thereunder,
             Warrant Shares (as defined in the Warrant Agreement governing the attached Warrant) and herewith makes payment of
$             thereof, including $             by certified or bank cashier’s check, representing the full
Exercise Price for such Warrant Shares at the price per share provided for in such Warrant, and requests that the certificates for such shares be issued in the name of, and delivered to
            , whose address is             . 
  
 Dated:               
  

	
	 (Signature must conform in all respect to
 name of holder as specified on the face of
 the Warrant)
  
  
  
  
  
  

	 (Address)

 FORM OF ASSIGNMENT 
  
 (To be signed only on transfer of Warrant) 
  
 For value received, the undersigned hereby sells, assigns, and transfers unto
             the right represented by the attached Warrant to purchase              Warrant Shares (as defined in
the Warrant Agreement government the attached Warrant) to which the within Warrant relates, and appoints Attorney to transfer such right on the books of              with full power
of substitution in the premises. 
  
 Dated:
              
  

	
	 (Signature must conform in all respect to
 name of holder as specified on the face of
 the Warrant)
  
  
  
  
  
  

	 (Address)

  
 Signed in the presence of:

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