Contract
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SUCH ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HELIX
WIND, CORP. THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
1. Issuance. In
consideration of good and valuable consideration as set forth in the Purchase
Agreement (defined below), including without limitation the Purchase Price (as
defined in the Purchase Agreement), the receipt and sufficiency of which is
hereby acknowledged by Helix Wind, Corp., a Nevada corporation (the “Company”),
St. Xxxxxx Investments, LLC, an Illinois limited liability company, its
successors or registered assigns (the “Holder”),
is hereby granted the right to purchase at any time on or after the Issue Date
(as defined below) until the date which is the last calendar day of the month in
which the fifth anniversary of the Issue Date occurs (the “Expiration
Date”), three hundred thousand (300,000) fully paid and nonassessable
shares of the Company’s Common Stock, $0.0001 par value per share (the “Common
Stock”), at an initial exercise price of $1.25 per share (the “Exercise
Price”), subject to further adjustment as set forth herein. This Warrant
is being issued pursuant to the terms of that certain Note and Warrant Purchase
Agreement of even date herewith (the “Purchase
Agreement”), to which the Company and the Holder (or the Holder’s
predecessor in interest) are parties.
Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
This
Warrant was originally issued to the Holder or the Holder’s predecessor in
interest on January 27, 2010 (the “Issue
Date”).
2. Exercise of
Warrants.
2.1 General.
(a) This Warrant is exercisable in
whole or in part at any time and from time to time commencing on the Issue Date.
Such exercise shall be effectuated by submitting to the Company (either by
delivery to the Company or by facsimile transmission) a completed and duly
executed Notice of Exercise (substantially in the form attached to this Warrant
as EXHIBIT A). The date such Notice of Exercise is either faxed, emailed or
delivered to the Company shall be the “Exercise
Date,” provided that, if such exercise represents the full exercise of
the outstanding balance of the Warrant, the Holder of this Warrant shall tender
this Warrant to the Company within five (5) Trading Days (as defined below)
thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate (i) the number of shares then being purchased
pursuant to such exercise and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.
For
purposes of this Warrant, the term “Trading
Day” means any day during which the Principal Market (as defined below)
shall be open for business.
(b)
Notwithstanding any other provision contained herein to the contrary, at any
time prior to the Expiration Date, the Holder may elect a “cashless” exercise of
this Warrant for any Warrant Shares. Whereby, the Holder shall be entitled to
receive a number of shares of Common Stock equal to (x) the excess of the
Current Market Value (as defined below) over the total cash exercise price of
the portion of the Warrant then being exercised, divided by (y) the Adjusted
Price of the Common Stock.
For the purposes of this Warrant, the
following terms shall have the following meanings:
“Adjusted Price of
the Common Stock” shall mean the lower of (i) the average volume-weighted
average price (the “VWAP”) for
the three trading days with the lowest average VWAP of the twenty trading days
immediately preceding the Exercise Date, or (ii) 50% of the VWAP over the five
trading days immediately preceding the Exercise Date.
“Current Market
Value” shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common Stock specified in the
applicable Notice of Exercise.
“Market Price of
the Common Stock” shall mean the lower of: (i) the Closing Price (as
defined below) of the Company’s common stock on the principal market where
Common Stock is traded (the “Principal
Market”) for the prior business day; or (ii) the average VWAP of the
Common Stock on such market for the prior ten (10) business days, in each case
as recorded by Bloomberg, LP (or if that service is not then reporting the
relevant information regarding the Common Stock, a comparable reporting service
of national reputation selected by the Holder and reasonably acceptable to the
Company).
“Closing
Price” means the 4:00 P.M. closing bid price of the Common Stock on the
Principal Market on the relevant trading day(s), as reported by Bloomberg LP (or
if that service is not then reporting the relevant information regarding the
Common Stock, a comparable reporting service of national reputation selected by
the Holder and reasonably acceptable to the Company) for the relevant
date.
(c) If
the Notice of Exercise form elects a “cash” exercise (or if the cashless
exercise referred to in the immediately preceding paragraph (b) is not available
in accordance with the terms hereof), the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the election of
the Holder, in cash or by certified or official bank check or by wire transfer
in accordance with instructions provided by the Company at the request of the
Holder.
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(d) Upon
the appropriate payment to the Company, if any, of the Exercise Price for the
shares of Common Stock purchased, together with the surrender of this Warrant
(if required), the Company shall immediately deliver the shares of Common Stock
electronically via Deposit/Withdrawal at Custodian (DWAC) or Depository Trust
Company (DTC) to the account designated by Holder on the Notice of
Exercise. If for any reason the Company is not able to deliver the
shares via DWAC or DTC, notwithstanding its best efforts to do so, the Company
shall deliver certificates representing the Warrant Shares to the Holder as
provided in the Notice of Exercise (the certificates delivered in such manner,
the “Warrant Share
Certificates”) within three (3) Trading Days (such third Trading Day, a
“Delivery
Date”) of (i) with respect to a “cashless exercise,” the Exercise Date as
the case may be, or, (ii) with respect to a “cash” exercise, the later of the
Exercise Date or the date the payment of the Exercise Price for the relevant
Warrant Shares is received by the Company.
(e) The
Company understands that a delay in the electronic delivery of shares or the
delivery of the Warrant Share Certificates, as the case may be, beyond the
Delivery Date (assuming electronic delivery is not available) could result in
economic loss to the Holder. As compensation to the Holder for such loss, the
Company agrees to pay late payment fees (as liquidated damages and not as a
penalty) to the Holder for late delivery of Warrant Share Certificates in the
amount of $100 per Trading Day after the Delivery Date for each $10,000 of
Exercise Price of the Warrant Shares subject to the delivery default. The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other remedies
which may be available to the Holder, in the event that the Company fails for
any reason to effect delivery of the Warrant Share Certificates by the Delivery
Date, the Holder may revoke all or part of the relevant Warrant exercise by
delivery of a notice to such effect to the Company, whereupon the Company and
the Holder shall each be restored to their respective positions immediately
prior to the exercise of the relevant portion of this Warrant, except that the
liquidated damages described above shall be payable through the date notice of
revocation or rescission is given to the Company.
(f) The
Holder shall be deemed to be the holder of the shares issuable to it in
accordance with the provisions of this Section 2.1 on the Exercise
Date.
2.2 Ownership Limitation.
Notwithstanding the provisions of this Warrant, in no event shall the this
Warrant be exercisable to the extent that the issuance of Common Stock upon the
exercise thereof, after taking into account the Common Stock then owned by the
Holder and its affiliates, would result in the beneficial ownership by the
Holder and its affiliates of more than 9.99% of the outstanding Common Stock of
the Company. For purposes of this paragraph, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended.
2.3 Trustee for Warrant
Holders. In the event that a qualified bank or trust company shall have
been appointed as trustee for the Holder pursuant to Subsection 6.2, such bank
or trust company shall have all the powers and duties of a warrant agent (as
hereinafter described) and shall accept, in its own name for the account of the
Company or such successor person as may be entitled thereto, all amounts
otherwise payable to the Company or such successor, as the case may be, on
exercise of this Warrant pursuant to Section 2.1.
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3. Reservation of
Shares. The Company hereby agrees that, at all times during the term of
this Warrant, there shall be reserved for issuance upon exercise of this
Warrant, one hundred percent (100%) of the number of shares of its Common Stock
as shall be required for issuance of the Warrant Shares for the then unexercised
portion of this Warrant. For the purposes of such calculations, the Company
should assume that the outstanding portion of this Warrant was exercisable in
full at any time, without regard to any restrictions which might limit the
Holder’s right to exercise all or any portion of this Warrant held by the
Holder.
4. Mutilation or Loss of
Warrant. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) receipt of reasonably satisfactory indemnification,
and (in the case of mutilation) upon surrender and cancellation of this Warrant,
the Company will execute and deliver a new Warrant of like tenor and date and
any such lost, stolen, destroyed or mutilated Warrant shall thereupon become
void.
5. Rights of the Holder.
The Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder in the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in this Warrant and are not enforceable
against the Company except to the extent set forth herein.
6. Protection Against Dilution
and Other Adjustments.
6.1 Capital
Adjustments. If
the Company shall at any time prior to the expiration of this Warrant subdivide
the Common Stock, by split-up or stock split, or otherwise, or combine its
Common Stock, or issue additional shares of its Common Stock as a dividend, the
number of Warrant Shares issuable on the exercise of this Warrant shall
forthwith be automatically increased proportionately in the case of a
subdivision, split or stock dividend, or proportionately decreased in the case
of a combination. Appropriate adjustments shall also be made to the
purchase price payable per Warrant Share, but the aggregate purchase price
payable for the total number of Warrant Shares purchasable under this Warrant
(as adjusted) shall remain the same. Any adjustment under this
Section 6.1 shall become effective automatically at the close of business
on the date the subdivision or combination becomes effective, or as of the
record date of such dividend, or in the event that no record date is fixed, upon
the making of such dividend.
6.2 Reclassification,
Reorganization and Consolidation. In case of any reclassification,
capital reorganization, or change in the capital stock of the Company (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 6.1 above), then the Company shall make appropriate provision so
that the Holder shall have the right at any time prior to the expiration of this
Warrant to purchase, at a total price equal to that payable upon the exercise of
this Warrant, the kind and amount of shares of stock and other securities and
property receivable in connection with such reclassification, reorganization, or
change by a holder of the same number of shares of Common Stock as were
purchasable by the Holder immediately prior to such reclassification,
reorganization, or change. In any such case appropriate provisions
shall be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per Warrant Share
payable hereunder, provided the aggregate purchase price shall remain the
same.
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6.3 Notice of Adjustment.
When any adjustment is required
to be made in the number or kind of shares purchasable upon exercise of this
Warrant, or in the Exercise Price, the Company shall promptly notify the Holder
of such event and of the number of Shares or other securities or property
thereafter purchasable upon exercise of this Warrant.
6.4 Computation of Adjusted
Exercise Price. Commencing on the Issue Date and continuing until this
Warrant is either exercised in full or expires, in case the Company shall at any
time after the date hereof issue or sell, other than in connection with any
Excepted Issuances (as such term is defined in the Note) any (i) shares of
Common Stock or preferred shares convertible into Common Stock, or (ii) debt,
warrants, options or other instruments or securities which are convertible into
or exercisable for shares of Common Stock (together herein referred to as “Equity
Securities”), in each case for consideration (or with a conversion price)
per common share less than the Exercise Price in effect immediately prior to the
issuance or sale of such securities or instruments, or without consideration,
then forthwith upon such issuance or sale, the Exercise Price shall (until
another such issuance or sale) be automatically reduced to the price (calculated
to the nearest full cent) equal to the price (or conversion price) of any such
securities or instruments; provided, however, that in no
event shall the Exercise Price be adjusted pursuant to this computation to an
amount in excess of the Exercise Price in effect immediately prior to such
computation. For the purposes of this Section 6.4, the term Exercise Price shall
mean the Exercise Price per share set forth in Section 1 hereof, as adjusted
from time to time pursuant to the provisions of this Section. Promptly upon the
occurrence of such an event, and in any event not less than ten (10) business
days after such an occurrence, the Company shall notify the Holder in writing of
the event, disclose to the Holder the new Exercise Price, and provide to the Holder copies of all relevant
documents related to such event, even if the event was or should be disclosed
publicly.
7. Certificate as to
Adjustments. In each case of any adjustment or readjustment in the shares
of Common Stock issuable on the exercise of the Warrants, the Company at its
expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms
of the Warrant and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued or
sold or deemed to have been issued or sold, (b) the number of shares of Common
Stock outstanding or deemed to be outstanding, and (c) the Exercise Price and
the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant and any
Warrant Agent of the Company (appointed pursuant to Section 9
hereof).
8. Transfer to Comply with the
Securities Act. This Warrant has not been registered under the 1933 Act
and has been issued to the Holder for investment and not with a view to the
distribution of either the Warrant or the Warrant Shares. Neither this Warrant
nor any of the Warrant Shares or any other security issued or issuable upon
exercise of this Warrant may be sold, transferred, pledged or hypothecated
without (i) an effective registration statement under the Act relating to such
security or (ii) an opinion of counsel satisfactory to the Company that
registration is not required under the Act. Each certificate for the Warrant,
the Warrant Shares and any other security issued or issuable upon exercise of
this Warrant shall contain a legend on the face thereof, in form and substance
satisfactory to counsel for the Company, setting forth the restrictions on
transfer contained in this Section. Any such transfer shall be accompanied by a
transferor assignment substantially in the form of EXHIBIT B, executed by the
transferor and the transferee and submitted to the Company.
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9. Warrant Agent. The
Company may, by written notice to the Holder of the Warrant, appoint an agent (a
“Warrant
Agent”) for the purpose of issuing Common Stock on the exercise of this
Warrant pursuant hereto, exchanging this Warrant pursuant hereto, and replacing
this Warrant pursuant hereto, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
10. Transfer on the Company’s
Books. Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
11. Notices. Any
notice required or permitted hereunder shall be given in manner provided in the
subsection headed “Notices” in the Purchase Agreement, the terms of which are
incorporated herein by reference.
12. Supplements and Amendments;
Whole Agreement. This Warrant may be amended or
supplemented only by an instrument in writing signed by the parties hereto. This
Warrant contains the full understanding of the parties hereto with respect to
the subject matter hereof and thereof and there are no representations,
warranties, agreements or understandings other than expressly contained herein
and therein.
13. Governing
Law. This Warrant shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois, without reference
to the choice of law provisions thereof. The Company and, by accepting this
Warrant, the Holder, each irrevocably submits to the exclusive jurisdiction of
the courts of the State of Illinois located in Xxxx County and any United States
District Court for the Northern District of Illinois for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Service of process in connection with
any such suit, action or proceeding may be served on each party hereto anywhere
in the world by the same methods as are specified for the giving of notices
under this Warrant. The Company and, by accepting this Warrant, the
Holder, each irrevocably consents to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in such court. The
Company and, by accepting this Warrant, the Holder, each irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS
BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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14. Remedies. The Company
stipulates that the remedies at law of the Holder of this Warrant in the event
of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
15. Counterparts. This
Warrant may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
Signature delivered via facsimile or email shall be considered original
signatures for purposes hereof.
16. Descriptive
Headings. Descriptive headings of the several Sections of this
Warrant are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
[Remainder
of page intentionally left blank]
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IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed by an officer thereunto
duly authorized.
Dated:
January 28, 2010
|
By:
/s/ Xxx
Xxxxxxx
|
|
|
Xxx
Xxxxxxx
|
|
|
(Print
Name)
|
|
|
CEO
|
|
|
(Title)
|
8
EXHIBIT
A
NOTICE OF
EXERCISE OF WARRANT
ATTN: _______________
VIA FAX
TO: ( )______________
The undersigned hereby irrevocably
elects to exercise the right, represented by the Warrant to Purchase Shares of
Common Stock dated as of , 20 , to purchase
shares of the Common Stock, $0.0001 par value (“Common
Stock”), of HELIX WIND,
CORP. and tenders herewith payment in accordance with Section 2 of said
Common Stock Purchase Warrant, as follows:
| _______ | CASH: $__________________________ = (Exercise Price x Exercise Shares) | |
| _______ | Payment is being made by: | |
| _______ |
enclosed
check
|
|
| _______ | wire transfer | |
| _______ | other | |
| _______ | CASHLESS EXERCISE | |
| Net number of Warrant Shares to be issued to Holder: ______* | ||
|
*
based
on: Current Market Value -
(Exercise Price x Exercise Shares)
Adjusted Price of Common Stock
|
||
|
Where:
Market
Price of Common Stock [“MP”] = $____________
Current
Market Value [MP x Exercise
Shares] = $____________
Adjusted
Price of Common
Stock = $____________
|
||
It is the
intention of the Holder to comply with the provisions of Section 2.2 of the
Warrant regarding certain limits on the Holder’s right to exercise thereunder.
The Holder believes this exercise complies with the provisions of said Section
2.2. Nonetheless, to the extent that, pursuant to the exercise effected hereby,
the Holder would have more shares than permitted under said Section, this notice
should be amended and revised, ab initio, to refer to the
exercise which would result in the issuance of shares consistent with such
provision. Any exercise above such amount is hereby deemed void and
revoked.
As
contemplated by the Warrant, this Notice of Exercise is being sent by facsimile
to the fax number and officer indicated above.
If this
Notice of Exercise represents the full exercise of the outstanding balance of
the Warrant, the Holder either (1) has previously surrendered the Warrant to the
Company or (2) will surrender (or cause to be surrendered) the Warrant to the
Company at the address indicated above by express courier within five (5)
Trading Days after delivery or facsimile transmission of this Notice of
Exercise.
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The
certificates representing the Warrant Shares should be transmitted by the
Company to the Holder
_______ via express courier,
or
_______ by electronic
transfer
after
receipt of this Notice of Exercise (by facsimile transmission or otherwise)
to:
_____________________________________
_____________________________________
_____________________________________
Dated: _____________________
___________________________
[Name of
Holder]
By:________________________
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EXHIBIT
B
FORM OF
TRANSFEROR ENDORSEMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of HELIX WIND, CORP. to which the within Warrant relates specified under
the headings “Percentage Transferred” and “Number Transferred,” respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of HELIX WIND, CORP. with full power
of substitution in the premises.
|
Transferees
|
Percentage Transferred
|
Number
Transferred
|
Dated:___________,
______
|
______________________________
|
|
|
[Transferor
Name must conform to the
name of
|
|
|
Holder
as specified on face of Warrant]
|
|
|
By:
___________________________
|
|
|
Name:
_________________________
|
Signed in
the presence of:
_________________________
(Name)
ACCEPTED
AND AGREED:
_________________________
[TRANSFEREE]
By:
_______________________
Name:
_____________________
11
