STOCK PURCHASE WARRANT To Purchase ___________ Shares of Common Stock of Blue Earth Solutions, Inc.
NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER
APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
LAWS. NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF
THE SECURITIES ACT.
To
Purchase ___________ Shares of Common Stock of
THIS
CERTIFIES that, for value received, ________________ (the “Holder”), shall have
the right to purchase from Blue Earth Solutions, Inc., a Nevada corporation (the
“Company”), _______________ fully paid and nonassessable shares of the Company’s
Common Stock (the “Common Stock”) at an exercise price of $1.33 US
per share (the "Exercise Price"), subject to further adjustment as set forth in
Section 3 hereof, at any time on or before December 31, 2010 (the “Termination
Date”).
1. Title to
Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto properly
endorsed.
2. Authorization of
Shares. The Company covenants that all shares of Common Stock
which may be issued upon the exercise of rights represented by this Warrant
will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of
Warrant.hahah
(a)
Exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the closing of the offering, and before the close of
business on the Termination Date by the surrender of this Warrant and the Notice
of Exercise Form annexed hereto duly executed, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder hereof at the address of such holder appearing
on the books of the Company) and upon payment of the Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank, the holder of this Warrant shall be entitled to receive a
certificate for the number of shares of Common Stock so purchased.
(b) In
lieu of cash exercising this Warrant, the Holder of this Warrant may elect to
receive shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue to
the Holder hereof a number of Shares computed using the following
formula:
| X = Y(A-B)/A | ||
| Where | X -- | The number of shares of Common Stock to be issued to the holder of this Warrant. |
|
|
Y
--
|
The
number of shares of Common Stock purchasable under this
Warrant.
|
|
|
A
--
|
The
fair market value of one share of the Company’s Common
Stock.
|
|
|
B
--
|
The
Exercise Price (as adjusted to the date of such
calculations).
|
For
purposes of this Paragraph 3(b), the fair market value of the Common Stock, if
publicly traded, shall be the five day average of the reported closing price
each day of the Shares for the five days immediately preceding the exercise of
this Warrant. If the Shares are not publicly traded, their fair
market value shall be the price per share that the Company could obtain from a
willing buyer for shares of Common Stock sold by the Company from authorized but
unissued shares, as such prices shall be determined by reference to the most
recent sale or issuance by the Company of Common Stock.
(c)
Certificates for shares purchased hereunder shall be delivered to the Holder
hereof within twenty (20) trading days after the date on which this Warrant
shall have been exercised as aforesaid. This Warrant shall be deemed to have
been exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a Holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by Holder, if any, pursuant to
Section 4 prior to the issuance of such shares, have been paid.
(d) If
the closing price for our Common Stock on the NASD OTCBB for ten (10)
consecutive trading days is equal to or greater than $2.00, the Company shall
have unlimited discretion to call the warrants at their exercise price of $2.00
within thirty (30) trading days of such occurrence by providing written notice
to the Holder. Upon call of the warrants by the Company, in the event
any holder thereof does not deliver the full exercise price within ten (10)
trading days of the Company mailing notice of the call to the Holder, the
warrant will expire and be of no further force or effect.
4. Charges, Taxes and
Expenses. Issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, and such certificates shall be issued in the
name of the Holder of this Warrant or in such name or names as may be directed
by the Holder of this Warrant; provided, however, that in the event certificates
for shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental
thereto.
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5. Closing of
Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this
Warrant.
6. Transfer, Division and
Combination.
(a) Subject
to compliance with any applicable securities laws, transfer of this Warrant and
all rights hereunder, in whole or in part, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant at
the principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned,
may be exercised by a new Holder for the purchase of shares of Common Stock
without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with
Section 6(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The
Company shall prepare, issue and deliver at its own expense
(other
than transfer taxes) the new Warrant or Warrants under this Section
6.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
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7. No Rights as Shareholder
until Exercise. This Warrant does not entitle the Holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.
8. Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant certificate or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.
9. Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.
10. Adjustments of Exercise
Price and Number of Warrant Shares.
(a) Stock Splits, etc.
The number and kind of securities purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall: (i) pay
a dividend in shares of Common Stock or make a distribution in shares of Common
Stock to Holders of its outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the Holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment. An adjustment made
pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving
4
corporation
or where there is a change in or distribution with respect to the Common Stock
of the Company), or sell, transfer or otherwise dispose of all or substantially
all its property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
Holders of Common Stock of the Company, then Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of
common stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of shares of Common Stock for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 10. For purposes of this Section 10, “common
stock of the successor or acquiring corporation” shall include stock of such
corporation of any class which is not preferred as to dividends or assets over
any other class of stock of such corporation and which is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section
10 shall similarly apply to successive reorganizations, reclassifications,
mergers, consolidations or disposition of assets.
11. Notice of
Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
Holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the
absence of manifest error, shall be conclusive evidence of the correctness of
such adjustment.
12. Notice of Corporate
Action. If at any time:
(a) the
Company shall take a record of the Holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or
5
(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then, in
any one or more of such cases, the Company shall give to Holder (i) at least 3
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 3 days’
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (a) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the Holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (b) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the Holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the Company
and delivered in accordance with Section 14(d).
13. Authorized
Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be
listed.
The Company shall not by any action,
including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
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 Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant above
the amount payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this
Warrant.
6
Upon the request of Holder, the
Company will at any time during the period this Warrant is outstanding
acknowledge in writing, in form reasonably satisfactory to Holder, the
continuing validity of this Warrant and the obligations of the Company
hereunder.
Before taking any action which would
cause an adjustment reducing the current Exercise Price below the then par
value, if any, of the shares of Common Stock issuable upon exercise of the
Warrants, the Company shall take any corporate action which may be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted Exercise
Price.
Before taking any action which would
result in an adjustment in the number of shares of Common Stock for which this
Warrant is exercisable or in the Exercise Price, the Company shall obtain all
such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction
thereof.
14. Miscellaneous.
(a) Choice of Laws, Jurisdiction
and Venue. This Warrant shall be binding upon any successors or assigns
of the Company. This Warrant shall constitute a contract under the
laws of Nevada and its interpretation and construction shall be determined
pursuant to the laws of Nevada without regard to its conflict of law, principles
or rules. In the event that a judicial proceeding is necessary, the
sole and exclusive forum for resolving disputes arising out of or relating to
this Warrant is the courts State of Nevada sited in and for Xxxxx County or the
federal courts for such state and county, and all related appellate courts, the
parties hereby irrevocably consent to the jurisdiction of such courts and agree
to said venue.
(b) Restrictions. The
Holder hereof acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws.
(c) Successors and
Assigns. This Warrant shall be binding upon any successors or
assigns of the Company.
(d) Non-waiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination
Date. If the Company fails to comply with any provision of this
Warrant, the Company shall pay to Holder such amounts as shall be sufficient to
cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.
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(e) Notices – by the
Company. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof by the Company shall be
deemed delivered upon deposit by the Company in the U.S. Mail, first class
postage prepaid at the address of the Holder in the shareholder records of the
Company. The Holder is responsible to notify the Company of any
change in the Holder’s address by delivering written notice of the change of
address to the Company in accordance with subparagraph (f), below.
(f) Notices – by a
Holder. Any notice, request or other document required or permitted
to be given or delivered to the Company hereof by the Holder shall be
transmitted overnight delivery via FedEx, UPS, U.S. Postal Service or other
carrier of similar reliability, signature upon delivery required, attn: General
Counsel, to the Company’s head office as reflected on the most recently publicly
filed 10Q or 10K report.
(g) Limitation of
Liability. No provision hereof, in the absence of affirmative
action by Holder to purchase shares of Common Stock, and no enumeration herein
of the rights or privileges of Holder hereof, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
(h) Remedies. Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.
(i) Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or Holder of Warrant
Shares.
(j) Indemnification. The
Company agrees to indemnify and hold harmless Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys’ fees, expenses and disbursements of any kind which may
be imposed upon, incurred by or asserted against Holder in any manner relating
to or arising out of any failure by the Company to perform or observe in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Warrant; provided, however, that the
Company will not be liable hereunder to the extent that any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, attorneys’ fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder’s negligence,
bad faith or willful misconduct in its capacity as a stockholder or Warrant
Holder of the Company.
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(k) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(l) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
(m) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
Dated
this 29th day of
September, 2008.
By: __________________
Authorized
Representative
9
NOTICE OF
EXERCISE
(1) The
undersigned hereby elects to purchase ________ shares of Common Stock (the
“Common Stock”), of Blue Earth Solutions pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.
(2) Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:
_______________________________
(Name)
_______________________________
(Address)
_______________________________
_______________________________
Social Security or Tax Identification
Number
Dated:
______________________
______________________________
Signature
______________________________
Print Name
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ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this form
and supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
_______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
_______
Holder's
Signature: _____________________________
Holder's
Address: _____________________________
_____________________________
Signature
Guaranteed: ___________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
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