Contract
Exhibit
10.2
FORM
OF
THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT
AND
ANY APPLICABLE STATE SECURITES LAWS, OR (C) IF REGISTERED UNDER THE 1933 ACT
AND
ANY APPLICABLE STATE SECURITIES LAWS.
---------------------------------------
MICROHELIX,
INC.
WARRANT
TO PURCHASE
SHARES
OF
COMMON STOCK
Expires
November 1, 0000
Xxxxxxxx,
Xxxxxx
Issue
Date:
November 2, 2006
IN
CONSIDERATION OF the representations and covenants set forth herein, and other
good and valuable consideration received, and subject to the provisions
hereinafter set forth, microHelix,
Inc.,
an
Oregon corporation (the "Company"),
hereby certifies that MH
Financial Associates, LLC,
an
Oregon limited liability company or its registered assigns (the "Warrant
Holder") is
entitled to subscribe for and purchase, during the period specified in this
Warrant, up to _______ shares ("Warrant
Shares")
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock of the Company, at an
exercise price per share equal to $0.30
per
share (subject to adjustment as hereinafter provided, the "Exercise
Price")
subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The right to purchase Warrant Shares will expire at
12:01
a.m., Pacific Time, on November 1, 2011.
1. Registration
of Warrant.
The
Company will register this Warrant upon records to be maintained by the Company
for that purpose (the "Warrant
Register"),
in
the name of the record Warrant Holder hereof from time to time. The Company
may
deem and treat the registered Warrant Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to
the
Warrant Holder, and for all other purposes, and the Company will not be affected
by notice to the contrary.
2. Representations
and Covenants of the Warrant Holder.
This
Warrant has been entered into by the Company in reliance upon the following
representations and covenants of the Warrant Holder:
(a) The
Warrant Holder by accepting this Warrant represents that the Warrant Holder
is
acquiring this Warrant for its own account or the account of an affiliate for
investment purposes and not with the view to any offering or distribution and
that the Warrant Holder will not sell or otherwise dispose of this Warrant
or
the underlying Warrant Shares in violation of applicable securities laws.
(b) The
Warrant Holder acknowledges that the certificates representing any Warrant
Shares will bear a legend indicating that they have not been registered under
the United States Securities Act of 1933, as amended (the "1933
Act"),
and
may not be sold by the Warrant Holder except pursuant to an effective
registration statement or pursuant to an exemption from registration
requirements of the 1933 Act and in accordance with federal and state securities
laws.
(c) In
no
event will the Warrant Holder make a disposition of any of its rights to acquire
Common Stock or Common Stock issuable upon exercise of such rights unless and
until (i) it has notified the Company of the proposed disposition, and (ii)
if
requested by the Company, it has furnished the Company with an opinion of
counsel satisfactory to the Company and its counsel to the effect that (A)
appropriate action necessary for compliance with the 1933 Act has been taken,
or
(B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions on the
transferability of any security will terminate when such security is effectively
registered under the 1933 Act and sold by the holder thereof in accordance
with
such registration, or such security is sold without registration in compliance
with Rule 144 under the 1933 Act. Whenever the restrictions imposed under this
section terminate, the Warrant Holder or holder of a share of Common Stock
then
outstanding as to which such restrictions have terminated will be entitled
to
receive from the Company one or more new certificates for the Warrant or for
such shares of Common Stock not bearing any restrictive legend.
(d) The
Warrant Holder is an "accredited investor" within the meaning of Rule
501(a) of Regulation D promulgated under the 1933 Act.
(e) The
Warrant Holder has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment,
and has the ability to bear the economic risks of its investment.
(f) The
Warrant Holder understands that if a registration statement covering this
Warrant or the Common Stock is not in effect when it desires to sell this
Warrant or the Common Stock, it may be required to hold such securities for
an
indefinite period. The Warrant Holder also understands that any sale of this
Warrant or the Common Stock purchased under this Warrant which might be made
by
it in reliance upon Rule 144 under the 1933 Act may be made only in accordance
with the terms and conditions of that Rule.
3. Validity
of Warrant and Issue of Shares.
The
Company represents and warrants that this Warrant has been duly authorized
and
validly issued and warrants and agrees that all of Common Stock that may be
issued upon the exercise of the rights represented by this Warrant will, when
issued upon such exercise, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof. The Company further warrants and agrees that during the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved a sufficient number
of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
4. Registration
of Transfers of Warrant.
Subject
to compliance with the legend set forth on the face of this Warrant and
Section
2(c),
the
Company will register the transfer of any portion of this Warrant in the Warrant
in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company. Upon
any
such registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "New
Warrant"),
evidencing the portion of this Warrant so transferred will be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, will be issued to the transferring Warrant Holder.
The acceptance of the New Warrant by the transferee thereof will be deemed
the
acceptance of such transferee of all of the rights and obligations of a Warrant
Holder of a Warrant.
5. Exercise
of Warrants.
(a) Upon
surrender of this Warrant with the Form of Election to Purchase attached hereto
duly completed and signed to the Company, and upon payment and delivery of
the
Exercise Price per Warrant Share multiplied by the number of Warrant Shares
that
the Warrant Holder intends to purchase hereunder, in lawful money of the United
States of America, in cash or by certified or official bank check or checks,
to
the Company, all as specified by the Warrant Holder in the Form of Election
to
Purchase, the Company will promptly issue or cause to be issued and cause to
be
delivered to or upon the written order of the Warrant Holder and in such name
or
names as the Warrant Holder may designate (subject to the restrictions on
transfer described in Section
2(c)
and in
the legend set forth on the face of this Warrant), a certificate for the Warrant
Shares issuable upon such exercise, with such restrictive legend as required
by
the 1933 Act. Any person so designated by the Holder to receive Warrant Shares
will be deemed to have become the holder of record of such Warrant Shares as
of
the Date of Exercise of this Warrant.
(b) A
"Date
of Exercise" means the date on which the Company will have received (i) this
Warrant (or any New Warrant, as applicable), with the Form of Election to
Purchase attached hereto (or attached to such New Warrant) appropriately
completed and duly signed, and (ii) payment of the Exercise Price for the number
of Warrant Shares indicated by the Warrant Holder to be purchased.
(c) If
less
than all of the Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company will issue or cause to be issued a New
Warrant evidencing the right to purchase the remaining number of Warrant
Shares.
(d) The
holder of this Warrant may, at its election, exercise this 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 - C))/B
(ii)
For
purposes of the foregoing formula:
A
= the
total number of shares with respect to which this Warrant is then being
exercised.
B
= the
average Market Price (as defined below) over a twenty-one (21) day period ending
three trading days before the effective date of the Exercise
Notice.
C
= the
Warrant Exercise Price then in effect at the time of such exercise.
"Market
Price"
means,
with respect to Warrant Shares, if (i) the shares are listed or admitted for
listing on any national securities exchange or included in The Nasdaq National
Market or the Nasdaq
SmallCap Market, the last reported sales price as reported on such exchange
or
market; (ii) if the shares are not so listed or admitted for trading, the
average of the last reported closing bid and asked quotation for the shares
as
reported on the National Association of Securities Dealers Automated Quotation
System ("Nasdaq") or a similar service if Nasdaq is not reporting such
information; or (iii) if the shares are not so listed or admitted for trading
or
quoted by Nasdaq or a similar service, the average of the last reported bid
and
asked quotation for the shares as quoted by a market maker in the shares (or
if
there is more than one market maker, then the average of the lowest bid and
highest asked quotation). In the absence of any available public quotations
for
the shares, the Board of Directors of the Company will determine in good faith
the fair market value of the shares, which determination will be set forth
in a
certificate signed by the Secretary of the Company.
6. Adjustment
of Exercise Price and Number of Shares.
The
character of the shares of stock or other securities at the time issuable upon
exercise of this Warrant, the number of Warrant Shares, and the Exercise Price
are subject to adjustment upon the occurrence of the following events, and
all
such adjustments will be cumulative:
(a)
The
Exercise Price of this Warrant and the number of shares of Common Stock or
other
securities at the time issuable upon exercise of this Warrant will be
appropriately adjusted to reflect any stock dividend, stock split, combination
of shares, reclassification, recapitalization or other similar event affecting
the number of outstanding shares of stock or securities.
(b)
In
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in
which
the Company will not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being hereinafter
referred to as a "Reorganization"), then, in each case, the holder of this
Warrant, on exercise at any time after the consummation or effective date
of
such Reorganization (the "Effective Date"), will receive, in lieu of the
shares
of stock or other securities at any time issuable upon the exercise of the
Warrant issuable on such exercise prior to the Effective Date, the stock
and
other securities and property (including cash) to which such holder would
have
been entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided
in this
Warrant).
(c)
In
case of any default under the terms of (i) that certain amended and restated
promissory note dated as of October 19, 2006 in the original principal
amount of
$1,028,982 (ii) secured indebtedness of the Company to any third party
in
principal amount exceeding $100,000, which default is not cured within
any
applicable cure period with respect to (i) or (ii) above, then the Exercise
Price will be automatically reduced to $0.15 per share (subject to any
other
applicable adjustments under this Section 6).
(d)
In
case of any adjustment or readjustment in the price or kind of securities
issuable on the exercise of this Warrant, the Company will promptly give
written
notice thereof to the holder of this Warrant, setting forth such adjustment
or
readjustment and showing in reasonable detail the facts upon which such
adjustment or readjustment is based.
7. Fractional
Shares.
The
Company will not be required to issue or cause to be issued
fractional Warrant Shares on the exercise of this Warrant. The number of
full
Warrant Shares that will be issuable upon the exercise of this Warrant
will be
computed on the basis of the aggregate number of Warrant Shares purchasable
on
exercise of this Warrant so presented. If any fraction of a Warrant Share
would,
except for the provisions of this Section
7,
be
issuable on the exercise of this Warrant, the Company will, at its option,
(i)
pay an amount in cash equal to the Exercise Price multiplied by such fraction
or
(ii) round the number of Warrant Shares issuable, up to the next whole
number.
8. Notice
of Intent to Sell or Merge the Company. The
Company will give Warrant Holder ten (10) days notice before the event of a
sale
of all or substantially all of the assets of the Company or the merger or
consolidation of the Company in a transaction in which the Company is not the
surviving entity.
9. Registration
Rights. The
Warrant Shares are subject to registration under the 1933 Act pursuant to a
Registration Rights Agreement entered into concurrently between the Company
and
the Warrant Holder.
10. Notices.
All
notices and other communications hereunder will be in writing and will be deemed
to have been given (i) on the date they are delivered if delivered in person;
(ii) on the date initially received if delivered by facsimile transmission
followed by registered or certified mail confirmation; (iii) on the date
delivered by an overnight courier service; or (iv) on the third business day
after it is mailed by registered or certified mail, return receipt requested
with postage and other fees prepaid as follows:
If
to
the Company:
microHelix,
Inc.
00000
XX
00xx
Xxxxx
Xxxxxxxx,
XX 00000
Fax
(000)
000-0000
Attention:
President
If
to
the Warrant Holder:
MH
Financial Associates, LLC
c/o
Aequitas Capital Management, Inc.
000
XX
Xxxxxxxx
Xxxxxxxx,
XX 00000
Fax:
000-000-0000
Attention:
President
Either
party may subsequently designate another address for notices by written notice
to the other party.
11. Miscellaneous.
(a) This
Warrant constitutes the entire agreement between the Company and Warrant Holder
with respect to the subject matter hereof, and supersedes all prior agreements
between the parties with respect to such subject matter. This
Warrant will be binding on and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. This Warrant may be amended
only in a writing signed by the Company and the Warrant Holder.
(b) Nothing
in this Warrant will be construed to give to any person or corporation other
than the Company and the Warrant Holder any legal or equitable right, remedy
or
cause of action under this Warrant; this Warrant will be for the sole and
exclusive benefit of the Company and the Warrant Holder.
(c) This
Warrant will be governed by, construed and enforced in accordance with the
internal laws of the State of Oregon without
giving effect to principles of conflicts of law. The parties hereto irrevocably
submit to the jurisdiction of any state or federal court sitting in Multnomah
County, Oregon, in any action or proceeding brought to enforce, or otherwise
arising out of or relating to, this Warrant, and hereby waive any objection
to
venue in any such court and any claim that such forum is an inconvenient forum.
(d) Each
party hereby irrevocably waives any right it may have, and agrees not to
request, a jury trial for the adjudication of any dispute hereunder or in
connection herewith or arising out of this Warrant or any transaction
contemplated hereby. In the event suit or action is brought by any party under
this Warrant to enforce any of its terms, or in any appeal therefrom, it is
agreed that the prevailing party or parties will be entitled to reasonable
attorneys fees to be fixed by the arbitrator, trial court, and/or appellate
court.
(e) The
parties agree that a breach or violation of this Warrant will result in
immediate and irreparable harm to the non-breaching party in an amount that
will
be impossible to ascertain at the time of the breach or violation, and that
the
award of monetary damages will not be adequate relief to the non-breaching
party. The non-breaching party will be entitled to seek equitable or injunctive
relief, in addition to other remedies to which it may be entitled at law or
equity. In any action for equitable relief, the parties agree to waive any
requirement for the posting of a bond or security.
(f) The
headings herein are for convenience only, do not constitute a part of this
Warrant and will not be deemed to limit or affect any of the provisions
hereof.
(g) In
case
any one or more of the provisions of this Warrant will be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant will not in any way be affected or impaired
thereby and the parties will attempt in good faith to agree upon a valid and
enforceable provision which will be a commercially reasonably substitute
therefor, and upon so agreeing, will incorporate such substitute provision
in
this Warrant.
(h) The
Warrant Holder will not, by virtue hereof, be entitled to any voting or other
rights of a shareholder of the Company, either at law or equity, and the rights
of the Warrant Holder are limited to those expressed in this
Warrant.
(i) This
Warrant may be executed in one or more counterparts, each of which when executed
will be deemed to be an original, but all of which taken together will
constitute one and the same agreement. A facsimile transmission of this signed
Warrant will be legal and binding on all parties hereto.
IN
WITNESS WHEREOF, each party has caused this Warrant to be duly executed by
its
authorized representative effective as of the Original Issue Date.
| COMPANY: | WARRANT HOLDER: | ||
| MICROHELIX, INC. |
MH
FINANCIAL ASSOCIATES, LLC
|
||
|
By:______________________________
|
By:
Aequitas Capital Management, Inc.,
its
Manager
|
||
|
Name:
Tyram X. Xxxxxx
Title:
President & Chief Executive Officer
|
|
||
| By:
_________________________
Xxxxxx
X. Jesenik, CEO
|
FORM
OF ELECTION TO PURCHASE
(To
be
executed by the Warrant Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
To:
MICROHELIX,
INC.
In
accordance with the Warrant enclosed with this Form of Election to Purchase,
the
undersigned hereby irrevocably elects to purchase __________ shares
of
Common Stock ("Common Stock"), no par value, of microHelix, Inc. and encloses
the warrant.
Method
of
Exercise (Please check one box):
o
The
undersigned elects to exercise the attached Warrant by means of a cash payment,
and tenders herewith the Exercise Price (as defined in the Warrant, originally
$0.30 per Warrant Share) for each Warrant Share being purchased or an aggregate
of $__________ in
cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price together with any applicable taxes payable by the
undersigned pursuant to the Warrant.
o
The
undersigned elects to exercise the attached Warrant by means of the net exercise
provisions of Section 5(d) of the Warrant.
The
undersigned requests that certificates for the shares of Common Stock issuable
upon this exercise be issued in the name of:
__________________________
__________________________
__________________________
(Please
print name and address)
_______________________________________
(Please
insert Social Security or Tax Identification Number)
If
the
number of shares of Common Stock issuable upon this exercise will not be all
of
the shares of Common Stock which the undersigned is entitled to purchase in
accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
in the name of and delivered to:
__________________________
__________________________
__________________________
(Please
print name and address)
| Dated:___________________ | Name of Warrant Holder: |
| (Print)__________________________ | |
| (By)_______________________________ | |
| (Name)_____________________________ | |
| (Title)______________________________ | |
|
Signature must conform in all respects to name
of
Warrant Holder as
specified
on the face of the Warrant
|
|
FORM
OF ASSIGNMENT
(To
be
signed only on transfer of Warrant)
TO: MICROHELIX,
INC.
FOR
VALUE
RECEIVED, the undersigned Registered Holder
________________________________
Print
Name of Holder
_____________________________________________________
(Please
insert Social Security or Tax Identification Number of Registered
Holder)
hereby
sells, assigns and transfers unto
_____________________________
_____________________________
_____________________________
(Please
Print Name and Address including Zip Code)
_______________________________________________
(Please
insert Social Security or Tax Identification Number of Assignee)
The
right
to purchase ________ shares of Common Stock of microHelix, Inc., evidenced
by
the attached Warrant, and irrevocably constitutes and appoints
_____________________________________ attorney to transfer this Warrant on
the
books of microHelix, Inc. with the full power of substitution in the
premises.
If
this
assignment is not an assignment of all of the shares of Common Stock which
the
undersigned is entitled to purchase in accordance with the enclosed Warrant,
the
undersigned requests that a new Warrant evidencing the right to purchase the
shares of Common Stock not assigned hereby be issued in the name of and
delivered to the Registered Holder.
Dated:___________________
Signature:
________________________
By:_____________________
Title:____________________
