Document:

Exhibit 4.1

	
The Securities represented by this Note have not been registered under the Securities Act of 1933, as amended (“Act”), or applicable state securities laws (“State Acts”) and shall not be sold, hypothecated, donated or otherwise transferred unless Borrower shall have received an opinion of legal counsel for Borrower, or such other evidence as may be satisfactory to Legal Counsel for Borrower, to the effect that any such transfer shall not require registration under the Act and the State Acts.

 

HELLENIC SOLUTIONS CORPORATION

 

14.00% Senior Preferred Secured Note

 

	
$925,000

	
No. 1

 

Date of Issue:  March 23, 2011

 

Hellenic Solutions Corporation, a Cayman Island Exempt Company, (hereinafter referred to as “Borrower”) is indebted and, for value received, herewith promises to pay to:

 

Access America Fund, LP.

 

or to its order (together with any assignee, jointly or severally, the “Holder” or “Lender”) on or before the Termination Date (as defined in Paragraph 2 below), the sum of Nine Hundred Twenty Five Thousand Dollars ($925,000) (the “Principal Amount”) and to pay interest on the Principal Amount at the rate of fourteen percent (14.00%) per annum as provided herein.  In furtherance thereof, and in consideration of the premises, Borrower covenants, promises and agrees as follows:

 

1.           Interest:  Interest on the Principal Amount outstanding from time to time shall accrue at the rate of 14.00% per annum compounding continuously in which the payment of interest shall be made at maturity.  Overdue principal and interest on this Note shall, to the extent permitted by applicable law, bear interest at the rate of eighteen percent (18.00%) per annum.  All payments of both principal and interest shall be made at 800 Town & Country Boulevard, Suite 420, Houston, TX 77024, or at such other place as may be designated by the Holder hereof in writing to Borrower.

 

2.           Maturity:  If not sooner accelerated or converted pursuant to Section 6, this Note shall mature on the eighteen month anniversary of the date of this note.

 

3.           Senior Indebtedness:  This Note shall is secured by a security agreement of even date herewith and the Borrower also represents that there are no other notes or liens outstanding other than listed in Exhibit A of this agreement.  Lender acknowledges that this note will automatically subordinate to a debt or convertible equity financing of over $5,000,000 U.S. (excluding trade payables or receivables financing).

 

4.           Taxes:  Borrower shall pay any documentary or other transactional taxes attributable to the issuance or delivery of this Note (excluding any federal, state or local income taxes and any franchise taxes or taxes imposed upon the Holder by the jurisdiction, or any political subdivision thereof, under which such Holder is organized or is qualified to do business.)

 

  

  

 

5.           Default:

 

(a)           Event of Default:  An “Event of Default” shall exist if any one or more of the following events (collectively, “Events of Default”) shall occur and be continuing:

 

(i)            Borrower shall fail to pay when due (or shall state in writing an intention not to pay or its inability to pay) any installment of interest on or principal of, this Note or any fee, expense or other payment required hereunder and the continuance of such failure for a period of ten (10) business days thereafter;

 

(ii)           Borrower commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to Borrower, or there is commenced against Borrower any such case or proceeding that is not dismissed within sixty (60) days after commencement;

 

(iii)           Borrower is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered;

 

(iv)           Borrower makes an assignment for the benefit of its creditors;

 

(v)           Borrower makes an application for the appointment of a receiver or liquidator for Borrower or any of its material assets is made by a creditor; and

 

(vi)           Borrower defaults with respect to any other indebtedness in excess of $100,000 to any Person other than Lender.

 

(vii)         Borrower, fails to make a required periodic filing with the United States Securities and Exchange Commission on Form 10-Q or Form 10-K by the required deadline of the applicable Form.  Extensions given to the company by filing Form 12b-25 with the SEC will allow for the deadline to be extended by the amount of time granted by filing said Form.

 

(viii)        Borrower makes any payment over $1,000 that was not authorized by the Administrative Committee that was established through the Company’s Board Minutes on March 4, 2011.

 

(ix)           Administrative Committee of the Borrower fails to reach the required consensus to approve disbursements and/or other business for a period of fourteen (14) days after the initial call for a meeting by two of the three members of the Administrative Committee as required by the Company’s minutes.  Notice of the failure to reach consensus must be reported to the Lenders by the Administrative Committee upon the lapse of the fourteen day period.  In the event that the impasse is not reported but identified by the Lenders, the Lenders may provide notice of an Event of Default to the Company.

 

(x)           Borrower dissolves or reduces, changes, or amends the power and duties of the Administrative Committee as established through the Borrower’s Board Minutes on March 4, 2011, without the express written consent of the Lenders.

	  
	
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Issuer’s Initial

 

  

  

 

(xi)           Borrower, on or after the Original Issuance Date, enters into an agreement or performs a capital reorganization of the ordinary shares or a merger or consolidation of the Borrower with or into another corporation, or the sale of all or substantially all of the Borrower’s properties and assets to any other person, without the express written consent of the Lenders.

 

(b)           Remedies Upon Event of Default:  If an Event of Default shall have occurred and be continuing for ten (10) days following notice of such Event of Default to Borrower by Lender without being cured to the satisfaction of Lender (other than an Event of Default under Section 4(a)(i), for which no additional cure period shall be applicable), then Lender may exercise any one or more of the following rights and remedies, and any other remedies provided in the Transaction Documents, as Lender in its sole discretion, may deem necessary or appropriate:

 

(i)           declare the unpaid Principal Amount (after application of any payments or installments received by Lender) of, and all interest then accrued but unpaid on, this Note and any other liabilities hereunder to be forthwith due and payable, whereupon the same shall forthwith become due and payable without presentment, demand, protest, notice of default, notice of acceleration or of intention to accelerate or other notice of any kind, all of which Borrower hereby expressly waives;

 

(ii)           reduce any claim to judgment;

 

(iii)           exercise its right to convert this and all Notes into common shares as described in Section 6;

 

(iv)           in its sole discretion extend or otherwise amend the terms of the note as permissible by law to avoid default, and/or

 

(v)           without notice of default or demand, pursue and enforce any of Lender’s rights and remedies under the Transaction Documents, or otherwise provided under or pursuant to any applicable law or agreement, all of which rights may be specifically enforced.

 

(c)           Remedies Nonexclusive:  Each right, power or remedy of the Holder upon the occurrence of any Event of Default as provided for in this Note or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Note or now or hereafter existing at law or in equity or by statute, and the exercise or beginning of the exercise by the Holder or transferee hereof of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by the Holder of any or all such other rights, powers or remedies.

 

(d)           Expenses:  Upon the occurrence of an Event of Default, which occurrence is not cured within the cure period, if any provided therefor, Borrower agrees to pay and shall pay all costs and expenses (including Lender’s reasonable attorneys’ fees and expenses) reasonably incurred by Lender in connection with the preservation and enforcement of Lender’s rights under the Transaction Documents, including interest at the lesser of:  (i) eighteen percent (18%) per annum or (ii) the maximum rate allowed under applicable law, from the date of the default at the maximum rate permitted by law computed on the unpaid Principal Amount.

	  
	
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Issuer’s Initial

  

  

 

6.           Conversion in the event of Default:

 

A.           Optional Conversion in the Event of Default.  Notwithstanding anything to the contrary contained in this Section 6 hereof or elsewhere, the Holder, in the event of default, at its sole option, shall have the right to convert from time to time, any or all of the Principal Amount into Conversion Shares at the Conversion Price by submitting a written notice (the “Optional Conversion Election Form”), electing to exercise its optional conversion rights in the event of Default (the “Optional Conversion”).

 

B.           Conversion Price.  The number of Ordinary Shares to be issued upon conversion of the Principal Amount shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price (as defined below).  The term “Conversion Amount” means, with respect to any conversion of this Note, the Principal Amount that the holder is electing to so convert (or that is required to be converted pursuant to a Mandatory Conversion) and for this purpose all related deferred interest shall be ignored and forgiven.  The “Conversion Price” shall be $0.05 (subject to adjustment as provided in Section 7 of this Agreement).

 

C.           Conversion Mechanics.

 

(i)           Surrender of Note Upon Conversion.  Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms of Section 6 of this Note, the Holder shall be required to physically surrender this Note (or any affidavit of lost Note) to the Borrower in order to receive the Conversion Shares due upon conversion of this Note by the Borrower.

 

(ii)           Delivery of Shares Upon Conversion.  Upon receipt by the Borrower of this Note (or any affidavit of lost Note) and provided the Holder has converted this Note in accordance with the requirements of Section 6 of this Note, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder the Conversion Shares and if the Conversion Shares are certificated, the Borrower shall issue to the Holder certificates representing the Conversion Shares no later than five (5) business days after such receipt (the “Deadline”).

 

D.           Concerning the Shares.  Conversion Shares may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Holder who agrees to sell or otherwise transfer the shares only in accordance with this Note and who is an accredited investor.  Until such time as the Conversion Shares may be registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

	  
	
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Issuer’s Initial

 

  

  

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT.”

 

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefor free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such shares may be made without registration under the Securities Act and the shares are so sold or transferred, (ii) such Holder provides the Borrower or its transfer agent with reasonable assurances that the Conversion Shares can be sold pursuant to Rule 144 or Rule 144(k) or (iii) if the Conversion Shares are registered for resale under an effective registration statement filed under the Act.

 

7.           Anti-Dilution Provisions.  The Conversion Price in effect at any time and the number and kind of securities issuable upon conversion of this Note shall be subject to adjustment from time to time upon the happening of certain events as follows:

 

A.           Adjustment for Stock Splits and Combinations.  If the Borrower at any time or from time to time on or after the date of the issuance of this Note (the “Original Issuance Date”) effects a subdivision of the outstanding ordinary shares, the Conversion Price then in effect immediately before that subdivision shall be proportionately decreased, and conversely, if the Borrower at any time or from time to time on or after the Original Issuance Date combines the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price then in effect immediately before the combination shall be proportionately increased.  Any adjustment under this Section 7A shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

B.           Adjustment for Certain Dividends and Distributions.  If the Borrower at any time or from time to time on or after the Original Issuance Date makes or fixes a record date for the determination of holders of ordinary or preference shares entitled to receive, a dividend or other distribution payable in additional ordinary or preference shares, then and in each such event the Conversion Price then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction (1) the numerator of which is the total number of shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date and (2) the denominator of which shall be the total number of shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price shall be adjusted pursuant to this Section 7B as of the time of actual payment of such dividends or distributions.

	  
	
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Issuer’s Initial

 

  

  

 

C.           Adjustments for Other Dividends and Distributions.  In the event the Borrower at any time or from time to time on or after the Original Issuance Date makes, or fixes a record date for the determination of holders of shares entitled to receive, a dividend or other distribution payable in securities of the Borrower other than shares, then and in each such event provision shall be made so that the Holders of Notes shall receive upon conversion thereof, in addition to the number of shares receivable thereupon, the amount of securities of the Borrower which they would have received had their Notes been converted into shares on the date of such event and had they thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 7 with respect to the rights of the Holders of the Notes.

 

D.           Adjustment for Reclassification, Exchange and Substitution.  In the event that at any time or from time to time on or after the Original Issuance Date, the shares issuable upon the conversion of the Notes is changed into the same or a different number of shares of equity of any kind, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or share dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section 7), then and in any such event each Holder of Notes shall have the right thereafter to convert such Notes to receive the kind and amount of equity units and other securities and property receivable upon such recapitalization, reclassification or other change, by holders of the maximum number of shares for which such Notes could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein.

 

E.           Reorganizations, Mergers, Consolidations or Sales of Assets.  If at any time or from time to time on or after the Original Issuance Date there is a capital reorganization of the shares (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section 7) or a merger or consolidation of the Borrower with or into another corporation, or the sale of all or substantially all of the Borrower’s properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holders of the Notes shall thereafter be entitled to receive upon conversion of the Notes the number of shares or other securities or property to which a holder of the number of shares deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale.  In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 7 with respect to the rights of the Holders of the Notes after the reorganization, merger, consolidation or sale to the end that the provisions of this Section 7 (including adjustment of the Conversion Price then in effect and the number of shares to be received upon conversion of the Notes) shall be applicable after that event and be as nearly equivalent as may be practicable.

	  
	
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Issuer’s Initial

 

  

  

 

8.           Prepayment:  The Borrower, at its discretion, has the right to prepay part or all of this Note, with a penalty equal to the amount of forgone interest that the Lender would have received if the note was carried to term.  For example, if the Borrower wishes to prepay the Note six months after issuance, the prepayment penalty will be the interest that would have been earned during the remaining twelve months.

 

9.           Failure to Act and Waiver:  No failure or delay by the Holder hereof to require the performance of any term or terms of this Note or not to exercise any right, or any remedy shall constitute a waiver of any such term or of any right or of any default, nor shall such delay or failure preclude the Holder from exercising any such right, power or remedy at any later time or times.  By accepting payment after the due date of any amount payable under this Note, the Holder shall not be deemed to waive the right either to require payment when due of all other amounts payable, or to later declare a default for failure to effect such payment of any such other amount.  The failure of the Holder to give notice of any failure or breach of Borrower under this Note shall not constitute a waiver of any right or remedy in respect of such continuing failure or breach or any subsequent failure or breach.

 

10.           Consent to Jurisdiction:  Borrower hereby agrees and consents that any action, suit or proceeding arising out of this Note may be brought in any appropriate state or federal court in the State of Texas, and, by the issuance and execution of this Note, Borrower and the Lender each irrevocably consents to the jurisdiction of each such court.

 

11.           Holder’s Right to Request Multiple Notes:  The Holder shall, upon written request and presentation of the original Note, have the right, at any interest payment date, to request division of this Note into two or more units, each of such to be in such amounts as shall be requested; provided however that no notes shall be issued in denominations of face amount less than Fifty Thousand Dollars ($50,000).

 

12.           Transfer:  This Note may be transferred on the books of Borrower by the registered Holder hereof, or by Holder’s attorney duly authorized in writing, only upon (i) delivery to Borrower of a duly executed assignment of the Note, or part thereof, to the proposed new Holder, along with a current notation of the amount of payments received, and presentment of such Note to Borrower for issue of a replacement Note, or Notes, in the name of the new Holder, (ii) the designation by the new Holder of Holder’s agent for notice, such agent to be the sole party to whom Borrower shall be required to provide notice when notice to Holder is required hereunder and who shall be the sole party authorized to represent Holder in regard to modification or waivers under this Note or the Security Agreement; and any action, consent or waiver, (other than a compromise of principal and interest), when given or taken by Holder’s agent for notice, shall be deemed to be the action of the Holders of a majority in amount of the Principal Amount of the Note, as such holders are recorded on the books of Borrower, and (iii) in compliance with the legend to read:

	  
	
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Issuer’s Initial

  

  

 

“THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), OR APPLICABLE STATE SECURITIES LAWS (“STATE ACTS”) AND SHALL NOT BE SOLD, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED UNLESS BORROWER SHALL HAVE RECEIVED AN OPINION OF LEGAL COUNSEL FOR BORROWER, OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO LEGAL COUNSEL FOR BORROWER, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT REQUIRE REGISTRATION UNDER THE ACT AND THE STATE ACTS.”

 

The Borrower shall be entitled to treat any Holder of record of this Note as the Holder in fact thereof and of this Note and shall not be bound to recognize any equitable or other claim to or interest in this Note in the name of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Texas.

 

13.           Notices:  All notices and communications under this Note shall be in writing and shall be either delivered in person or by overnight delivery and accompanied by a signed receipt therefor; or mailed first-class United States certified mail, return receipt requested, postage prepaid, and addressed the address for notice as stated in the Note Purchase Agreement.  Any notice of communication shall be deemed to have been given or made as of the date of such delivery if delivered, or if mailed, then when deposited in the mail, postage prepaid by registered or certified mail, return receipt requested.

 

14.           Maximum Interest Rate:  Regardless of any provision contained in this Note, the Holder shall never be entitled to receive, collect or apply as interest on the Note any amount in excess of interest calculated at the Maximum Rate (as defined below), and, in the event that the Holder ever receives, collects or applies as interest any such excess, the amount which would be excessive interest shall be deemed to be a partial prepayment of principal and treated hereunder as such; and, if the Principal Amount of this Note is paid in full, any remaining excess shall forthwith be paid to Borrower.  In determining whether or not the interest paid or payable under any specific contingency exceeds interest calculated at the Maximum Rate, Borrower and the Holder shall, to the maximum extent permitted under applicable law, (i) characterize any non principal payment as an expense, fee or premium rather than as interest; (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, pro rate, allocate and spread, in equal parts, the total amount of interest throughout the entire contemplated term of this Note; provided that, if this Note is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds interest calculated at the Maximum Rate, the Holder shall refund to Borrower the amount of such excess or credit the amount of such excess against the principal amount of the Note and, in such event, the Holder shall not be subject to any penalties provided by any laws for contracting for, charging, taking, reserving or receiving interest in excess of interest calculated at the Maximum Rate.

	  
	
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Issuer’s Initial

  

  

 

“Maximum Rate” shall mean, on any day, the lesser of (i) eighteen percent (18%) or (ii) highest non-usurious rate of interest (if any) permitted by applicable law on such day that at any time, or from time to time, may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by this Note under the laws which are presently in effect of the United States of America and the State of Texas or by the laws of any other jurisdiction which are or may be applicable to the Holders of this Note and such indebtedness or, to the extent permitted by law, under such applicable laws of the United States of America and the State of Texas or by the laws of any other jurisdiction which are or may be applicable to the Holder of this Note and which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allows.

 

15.           Rights under Transaction Documents:  This Note is issued pursuant to that certain Secured Note Purchase Agreement of even date herewith between the Lender and Borrower (the “Note Purchase Agreement”), and the Holder hereof is entitled to all the rights and benefits, and is subject to all the obligations of Lender under said agreement.  Capitalized terms used herein which are not defined in this Note, shall have the meaning stated in the Note Purchase Agreement.  Both Borrower and the Holder have participated in the negotiation and preparation of the Note Purchase Agreement, this Note and the other Transaction Documents.  Borrower agrees that a copy of the Note Purchase Agreement with all amendments, additions and substitutions therefore shall be available to the Holder at the offices of Borrower.  This Note is secured pursuant to a security agreement of even date herewith by and between Borrower and the Lender.

 

16.           Governing Law:  This Note shall be governed by and construed and enforced in accordance with the laws of the State of Texas, or, where applicable, the laws of the United States without regard to conflict of laws principles.  There are no unwritten oral agreements between the parties.

 

IN WITNESS WHEREOF, the undersigned Borrower has caused this Note to be duly issued and executed on the Date of Issue as stated above.

 

	
Hellenic Solutions Corporation

	  	  
	  	  	  
	  	  	  
	
Dimitrios K. Vassilikos

	  	  
	
Chief Executive Officer

	  	  

 

	  
	
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Issuer’s InitialExhibit 4.2

 

Form of Warrant

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON March __, 2016.

Warrant No. _____

HELLENIC SOLUTIONS CORPORATION

 

WARRANT TO PURCHASE ________ ORDINARY SHARES,

 

This certifies that, for value received, ______________, or registered assigns (“Holder”) is entitled, subject to the terms set forth below, to purchase from Hellenic Solutions Corporation, a Cayman Islands corporation (the “Company”), ______________ shares (the “Warrant Shares”) of the ordinary shares, par value $0.00345728 per share, of the Company (the “Common Stock”), commencing on March __, 2011 (the “Warrant Issue Date”), upon surrender hereof, at the principal office of the Company referred to below, with the subscription form attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the Exercise Price as set forth in Section 2 below.  The number and character of such shares of Common Stock and the Exercise Price are subject to adjustment as provided below.  The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein.  This Warrant is being issued pursuant to the terms and conditions of a Securities Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, between the Company and the Holder.  This Warrant and other identical Warrants are subject to redemption by the Company pursuant to and in accordance with Section 16 hereof.  All terms used but not defined herein shall have the meaning ascribed thereto in the Purchase Agreement.

 

  

  

 

1.           Term of Warrant.  Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m., Eastern Standard Time, on the fifth anniversary of the Warrant Issue Date, and shall be void thereafter.

2.           Exercise Price.  The exercise price at which this Warrant may be exercised shall be $2.50 per share of Common Stock (the “Exercise Price”), as such Exercise Price may be adjusted from time to time pursuant to Section 11 hereof.

3.           Exercise of Warrant.

(a)           Method of Exercise.  The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time, during the term hereof as described in Section 1 above, by the surrender of this Warrant and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the principal office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), upon (i) payment in cash or by check acceptable to the Company, or (ii) a net issue exercise as provided in Section 3(c) below.

(b)           Issuance of Shares.  This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date.  As promptly as practicable on or after such date and in any event the Company will use its best efforts to ensure that shares are issued within three (3) trading days thereafter (the “Delivery Date”), the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise.  In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant may then be exercised.

 

  

  

 

So long as a registration statement under the Securities Act of 1933, as amended, providing for the resale of the shares issuable upon exercise of this Warrant is then in effect, the Company shall use reasonable efforts to ensure the issuance and delivery of the shares to the Depository Trust Company (“DTC”) account on the Holder’s behalf via the Deposit Withdrawal at Custodian System (“DWAC”) within a reasonable time, not exceeding three (3) trading days after such exercise, and the Holder hereof shall be deemed for all purposes to be the holder of the shares so purchased as of the date of such exercise.  Notwithstanding the foregoing to the contrary, the Company or its transfer agent shall only be obligated to issue and deliver the shares to the DTC on a holder’s behalf via DWAC if such exercise is in connection with a sale and the Company and its transfer agent are participating in DTC through the DWAC system.

(c)           Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the shares issuable upon exercise of this Warrant pursuant to an exercise on or before the Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the shares issuable upon exercise of this Warrant which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of shares issuable upon exercise of this Warrant that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of shares issuable upon exercise of this Warrant for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

 

  

  

  

(d)           Cashless Exercise.  Holder will have the option for cashless exercise if the Company fails to deliver a Registration Statement for the shares underlying these warrants as prescribed in the Placement Agent Agreement for the proposed bridge loan from National Securities Corporation dated March __, 2011.

4.           No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  In lieu of any fractional share to which the Holder would otherwise be entitled (after aggregating all shares that are being issued upon such exercise), the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

5.           Replacement of Warrant.  On receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

  

  

 

6.           Rights of Stockholders.  Subject to Sections 9 and 11 of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised as provided herein.

7.           Transfer of Warrant.

(a)           Warrant Register.  The Company will maintain a register (the “Warrant Register”) containing the names and addresses of the Holder or Holders.  Any Holder of this Warrant or any portion thereof may change its address as shown on the Warrant Register by written notice to the Company requesting such change.  Any notice or written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register.  Until this Warrant is transferred on the Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

(b)           Warrant Agent.  The Company may, by written notice to the Holder, appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 7(a) above, issuing the Common Stock or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the foregoing (the “Warrant Agent”).  Thereafter, any such registration, issuance, exchange or replacement, as the case may be, shall be made at the office of the Warrant Agent.

 

  

  

 

(c)           Transferability and Negotiability of Warrant.  This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company).  Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the “Act”), title to this Warrant may be transferred by endorsement (by the Holder executing the Assignment Form annexed hereto) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

(d)           Exchange of Warrant Upon a Transfer.  On surrender of this Warrant for exchange, properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect to compliance with the Act and with the limitations on assignments and transfers contained in this Section 7, the Company at its expense shall issue 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, for the number of shares issuable upon exercise hereof.

 

(e)           Compliance with Securities Laws.

 

The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment for the Holder’s own account, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances that will not result in a violation of the Act or any state securities laws.

 

This Warrant and all shares of Common Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws):

 

  

  

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

The Company agrees to reissue certificates representing any of the shares of Common Stock issuable upon exercise of this Warrant, without the legend set forth above if at such time, prior to making any transfer of any such shares of Common Stock, (i) such holder thereof shall provide the Company with an opinion of counsel reasonably satisfactory to the Company, to the effect that the registration of the shares of Common Stock under the Securities Act and applicable state securities laws is not required in connection with such proposed transfer, (ii) a registration statement under the Securities Act covering such proposed disposition (A) has been filed by the Company with the U.S. Securities and Exchange Commission, (B) has become effective under the Securities Act and remains effective as of the time of the proposed transfer, and (C) such holder certifies that such transfer is being made in accordance with the plan of distribution set forth therein and that any prospectus delivery requirement will be complied with or (iii) the holder provides the Company with an opinion of counsel satisfactory to the Company to the effect that such transfer is being made in accordance with Rule 144 along with other customary documentation reasonably requested by the Company.  The Company will respond to any such notice from a holder within three (3) trading days.  The restrictions on transfer contained in this Section 7 shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Warrant.

 

  

  

 

8.           Reservation of Stock.  The Company covenants that during the term this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of this Warrant and, from time to time, will take all steps necessary to amend its Amended and Restated Articles of Incorporation (the “Articles”) to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant.  The Company further covenants that all shares of Common Stock that may be issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price, all as set forth herein will be duly and validly authorized and 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 therewith).  The Company agrees 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 shares of Common Stock upon the exercise of this Warrant.

 

9.           Notices.

Whenever the Exercise Price or the shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and the shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant.

 

In case:

the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation or entity, or any conveyance of all or substantially all of the assets of the Company to another corporation or entity, or of any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a notice specifying, as the case may be, (A) the date on which a 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, or (B) the date on which such reorganization, reclassification, consolidation, merger, conveyance, 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 Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 10 days prior to the record date specified in (A) above or 20 days prior to the date specified in (B) above.

 

  

  

  

10.           Amendments and Waivers.

Neither this Warrant, or any provision hereof, may be amended, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

11.           Adjustments.  The Exercise Price and the shares purchasable are subject to adjustment from time to time as follows:

 

  

  

 

(a)           Merger, Sale of Assets, etc.  If at any time while this Warrant is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company’s capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (iii) a sale or transfer of the Company’s properties and assets as, or substantially as, an entirety to any other corporation or other entity, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or property of the successor corporation or other entity resulting from such reorganization, merger, consolidation, merger, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 11.  The foregoing provision of this Section 11(a) shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation or other entity that are at the time receivable upon the exercise of this Warrant.  If the per-share consideration payable to the Holder for shares in connection with any such transaction is in a form other than cash or marketable securities, then the fair market value of such consideration shall be determined in accordance with the paragraph below.  In all events, appropriate adjustment (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant.

For purposes of the above calculation, fair market value of one share of Common Stock shall be determined by the Company’s Board of Directors in good faith; provided, however, that where there exists a public market for the Common Stock at the time of such exercise, the fair market value of one share of Common Stock shall be the average of the closing bid and asked prices of the Common Stock quoted in the OTC Bulletin Board or the last reported sale price of the Common Stock or the closing price quoted on the NASDAQ Capital Market or on any exchange on which the Common Stock is listed, whichever is applicable, as published by Bloomberg LP for the five (5) trading days prior to the date of determination of fair market value.

 

  

  

 

(b)           Reclassification, etc.  If the Company, at any time while this Warrant remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11.

(c)           Split, Subdivision or Combination of Shares.  If the Company at any time while this Warrant remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased in the case of a split or subdivision or proportionately increased in the case of a combination and the number of such securities shall be proportionately increased in the case of a split or subdivision or proportionately decreased in the case of a combination.

(d)           Calculations.  All calculations under this Section 11 shall be made to the nearest four decimal points.

12.          No Impairment.  The Company shall not, by amendment of its Articles or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Section 11 and in the taking of all such action as may be necessary or appropriate in order to protect the exercise rights of the Holder against dilution or other impairment.

13.          Saturdays, Sundays and Holidays.  If the last or appointed day for the taking of any action or the expiration of any right granted herein shall be a Saturday, Sunday or legal holiday, then (notwithstanding anything herein to the contrary) such action may be taken or such right may be exercised on the next succeeding day that is not a Saturday, Sunday or legal holiday.

 

  

  

 

14.          Governing Law; Consent to Jurisdiction  This Agreement shall be governed by and construed solely and exclusively under and pursuant to the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York.  The Company and the Holder (i) hereby irrevocably submits to the jurisdiction of the United States District Court sitting in the Southern District of New York and the New York Supreme Court located in New York County, New York for the purposes of any suit, action or proceeding arising out of or relating to this Warrant and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.  The Company and the Holder each consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing in this Section 14 shall affect or limit any right to serve process in any other manner permitted by law.

 

15.          Binding Effect.  The terms of this Warrant shall be binding upon and inure to the benefit of the Company and the Holder and their respective successors and assigns.

 

16.         Redemption Provisions.  Provided (i) that the Warrant Shares are registered for resale under and pursuant to an effective resale registration statement (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission and that such Registration Statement shall be effective thirty (30) days prior to the date of the Redemption Notice (as hereinafter defined) and remains effective through the Redemption Date (as hereinafter defined), (ii) the Common Stock is traded and/or eligible for quotation on either the New York Stock Exchange, the American Stock Exchange, NASDAQ or the OTC Bulletin Board, and (iii) the last sale price of a share of Common Stock is at least $10.00 per share, as adjusted for stock splits, dividends and the like for all ten (10) of the consecutive trading days ending within three (3) business days prior to the day on which Redemption Notice is given to the Registered Holder.  then upon not less than fourteen (14) business days’ prior written notice (which notice shall be in the same manner as provided in the Purchase Agreement) (the “Redemption Notice”) to the registered holder, the Warrants may be redeemed by the Company at any time prior to expiration of the Warrants, in whole but not in part, at its sole option, at a redemption price of $.0001 per share for every Warrant Share purchasable upon exercise hereof at the time of such redemption (the “Redemption Date”).  The sending of the Redemption Notice shall not affect the registered holder’s ability to exercise these Warrants at any time prior to the date of redemption.  On and after the date of redemption, the holder shall only have the right to receive $0.0001 per share of Common Stock purchasable upon exercise hereof at the time of such redemption.

 

  

  

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized.

 

	  	  	
HELLENIC SOLUTIONS CORPORATION

	 	 	 
	  	  	
By:

	  
	  	  	 	

Name: 

	  	  	 	

Title:

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