Document:

bblu_ex10-1.htm

Exhibit 10.1

 

 

 

SUBSCRIPTION INSTRUCTIONS

 

1.           Complete the Purchaser Questionnaire and Statement unless previously completed (Item II in this Package).

 

2.           Complete the Subscription Agreement by signing the signature page as follows:

 

	
1.1

	
If the Investor is an individual sign over the line “Signature of Investor”. If there is a second individual Investor (not a partnership), that person should sign on “Co-Investor” line.

 

	
1.2

	
If the Investor is not an individual, an authorized signatory of the entity should sign under the line “If Entity Investor” and fill in the requested information.

 

	
1.3

	
Print the Investor’s name and mailing address where indicated on the signature page.

 

3.           Send in your payment following these PAYMENT INSTRUCTIONS:

Send the funds for your participation either by wire transfer or by check in accordance with the following instructions:

	
  

	
-- Wire Funds

	
Wire the funds to Blue Earth, Inc. to the following account:

	
  

	
Capital One Bank

57 West 57th Street

	
  

	
New York, New York 10019

	
  

	
For the Account of Davidoff Malito & Hutcher LLP

	
  

	
IOLA Attorney Trust Account

	
  

	
ABA Routing No. 021407912

	
  

	
Account No.  7047522050

	
  

	
-- Check

	
Make your check payable to “DAVIDOFF MALITO & HUTCHER LLP, as Escrow Agent for BLUE EARTH INC.” and:

RETURN CHECK AND ALL COMPLETED AND SIGNED MATERIALS TO:

Davidoff Malito & Hutcher LLP

605 Third Avenue, 34th Floor

New York, NY 10158

Attn:  Ms. Elliot H. Lutzker, Esq.

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ARE BEING OFFERED AND SOLD ONLY TO ACCREDITED INVESTORS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT.  SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE APPLICABLE PROVISIONS OF THE ACT OR ARE EXEMPT FROM SUCH REGISTRATION.

 

 

  

  

  

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of September 1, 2011, hereof by and between Blue Earth, Inc., a Nevada corporation (the “Company”), and the undersigned investor (together with its successors and permitted assigns, the “Investor”).

 

In consideration of the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

TERMS OF THE OFFERING

	
  

	
1.1

	
The Company is offering solely to accredited investors and non U.S. Persons at $10.00 per Unit, on a “best efforts” 100,000 Units ($1,000,000) minimum basis, 200,000 Units ($2,000,000) maximum basis with an over-subscription option for an additional 100,000 Units, or $1,000,000.  Each Unit consists of: (i) one share of Series A Convertible Preferred Stock (“Preferred Stock”), offered at $10.00 per share convertible into ten shares of Common Stock at $1.00 per share, and (ii) warrants (“Warrants”) to purchase one share of Common Stock for each two shares of Common Stock issuable upon conversion of the Preferred Stock.

The terms and conditions of the Preferred Stock are set forth in the Certificate ofDesignation of the Rights, Preferences, Privileges and Restrictions of Series AConvertible Preferred Stock attached hereto as Exhibit A (the “Certificate”).  As set forth in the Certificate, the Preferred Stock:

	
  

	
·

	
pays an eight percent (8%) dividend when paid in cash or a twelve percent (12%) dividend when paid in common stock at the Company’s election;

 

	
  

	
·

	
shall be convertible at the Company’s election at $1.00 per share upon the earlier of (i) four (4) years from issuance or (ii) when the Common Stock closing price trades at $3.00 per share for sixty (60) consecutive calendar days;

 

	
  

	
·

	
liquidation preference of $10.00 per share plus additional unpaid dividends;

 

	
  

	
·

	
votes on an as converted basis with Common Stock as one class;

 

	
  

	
·

	
will register underlying common stock on next available registration standard for those who invest before filing with the SEC and will otherwise be added on Amendment No. 1 if permitted by the SEC;

 

	
  

	
·

	
all funds will be returned if a minimum of $1,000,000 of Units are not subscribed and paid for.

 

 

  

1

  

The terms of the Warrants are set forth in the form of warrant, attached hereto asExhibit B.  As set forth in the warrant, the Warrant:

 

	
  

	
·

	
Warrant: Each A warrant entitles the holder to receive one common share and a B warrant when the A warrant is exercised. The exercise price is $3.00/share and the expiration date is December 31, 2013.

	
  

	
·

	
Warrant: Each B warrant entitles the holder to receive one common share and a C Warrant when the B warrant is exercised. The exercise price is $6.00/share and the expiration date three (3) years from the issuance date.

	
  

	
·

	
Warrant: Each C warrant entitles the owner to receive one common share when the C warrant is exercised. The exercise price is $12.00/share and the expiration date is three (3) years from the issuance date.

The Units, Preferred Stock, Warrants and Common Stock issuable upon conversion of the Preferred Stock and/or exercise of the Warrants are hereafter collectively referred to as the “Securities.”  This Offering is being made only to Investors who qualify as “accredited investors” as such term is defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and a limited number of non-accredited investors at the discretion of the Company.

 

 

	
  

	
1.2

	
This Offering shall terminate at 5:00 p.m. PST on September 30, 2011 (“Termination Date”), unless terminated earlier in the Company’s sole discretion, or extended by the Company at its sole discretion.

 

	
  

	
1.3

	
Subject to the terms and conditions of this Agreement, the Company desires to issue to the Investor, and the Investor agrees to subscribe to, the number of Units set forth upon the signature page hereof on the terms and conditions set forth in this Agreement.

 

	
  

	
1.4

	
An executed and properly completed copy of this Agreement together with the other documents set forth above under “Subscription Instructions” should be delivered, to Blue Earth, 2298 Horizon Ridge Parkway, Suite 205, Henderson, NV 89052; Attention: Johnny R. Thomas, Chief Executive Officer.

 

	
  

	
1.5

	
Acceptance of this Offer shall not be deemed given until the countersigning of this Subscription Agreement on behalf of the Company.

 

	
  

	
1.6

	
If this Agreement is accepted by the Company, in whole or in part, and subject to rejection for any reason whatsoever the conditions set forth in Section 2.2 of this Agreement, the Company shall issue the Units subscribed for hereby, dated the date of closing of the Offering of such Agreement (the “Closing”) and return to the Investor a fully executed copy of this Agreement.  The Investor hereby authorizes and directs the Company to deliver certificates representing the Units to be issued to such Investor pursuant to this Agreement.

 

 

 

  

2

  

 

 

	
  

	
1.7

	
The undersigned may not withdraw this subscription or any amount, paid pursuant thereto, except as otherwise provided below.

 

	
  

	
1.8

	
If the Investor is not a United States person, such Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Units or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Units, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Units.  Such Investor’s subscription and payment for, and his or her continued beneficial ownership of the Units, will not violate any applicable securities or other laws of the Investor’s jurisdiction.

 

ARTICLE II

PURCHASE OF UNITS

 

In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties of this Agreement agree as follows:

 

	
  

	
2.1

	
Conditions of the Offering.  It is understood and agreed that this Agreement is made subject to the following terms and conditions:

 

	
  

	
(i)

	
The Company shall have the right to accept or reject this Agreement in whole.  Unless this subscription is accepted in whole by the Company prior to the Termination Date, this Agreement shall be deemed rejected in whole.  Agreements accepted in whole by the Company shall be irrevocable, except as otherwise provided by law.  Agreements need not be accepted in the order received.

 

	
  

	
(ii)

	
At the date of the Closing, the Investor shall have been furnished with such information, documents, certificates, and opinions as it may reasonably require to evidence the accuracy, completeness, or satisfaction of the representations, warranties, covenants, agreements, and conditions herein contained or as it otherwise may reasonably request.

 

	
  

	
(iii)

	
The Investor acknowledges that the Company may, in its sole and absolute discretion, reduce the Investor’s Subscription Offer for Units to any number of Units less than the number of Units set forth on the signature page hereof, or that the Company may reject the Investor’s subscription in its entirety, in each case without prior notice to or consent by the Investor. Upon acceptance of the Investor’s Subscription Offer for Units, the Company shall issue the Units to the Investor subject to the terms and conditions of this Agreement. The Closing of the Offering is set forth in Section 2.2 hereof.  The Company and the Investor shall each bear their own expenses in connection with the Offering.

 

 

 

  

3

  

 

	
  

	
(iv)

	
The Company and the Investors agree that purchases by officers, directors, their affiliates and other insiders may be made in this Offering.

 

	
  

	
(v)

	
A minimum of $1,000,000 of Units are subscribed and paid for prior to the Termination Date.

 

	
  

	
2.2

	
Closing; Deliver.

 

	
  

	
(i)

	
The “Closing” shall mean such date, after all the conditions precedent in Section 2.1 and Article V are fulfilled or waived in writing, as the case may be, prior to the Termination Date (the “Initial Closing”).  On each Closing, issuance of the Units shall take place at such time and place as the Company and the Investors mutually agree upon, orally or in writing. The Investors shall not be liable to any party, including, but not limited to, the Company, in the event any Closing does not take place owing to the conditions set out in Section 2.2 and Article V not being fulfilled or waived, as the case may be.

 

	
  

	
(ii)

	
At each Closing, the Company shall deliver the respective Units to be purchased by each Investor at the Closing against delivery of counterpart signature pages to this Agreement and the Offering Price.

 

	
  

	
(iii)

	
The following filings made by the Company with the SEC (the “SEC Documents”), all of which have been provided to the Investor or are available at the SEC’s website (www.sec.gov) consist of the Company’s Annual Report on Form 10-K for December 31, 2010; and Quarterly Report on Form 10-Q for June 30, 2011, under which this Offering is being made, all of which are incorporated by reference herein.

 

ARTICLE III

REPRESENTATION AND WARRANTIES OF INVESTORS

Each Investor represents and warrants to the Company that:

 

	
  

	
3.1

	
Such Investor has full power and authority to enter into this Agreement.  This Agreement, when executed and delivered by the Investor, will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies.

 

	
  

	
3.2

	
This Agreement is made with the Investor in reliance upon the Investor’s representation to the Company, which by the Investor’s execution of this Agreement, the Investor hereby confirms, that the Units to be acquired by the Investor will be acquired for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof as at the date of this Agreement, and that the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.  By executing this Agreement, the Investor further represents that the Investor does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Units. The Investor has not been formed for the specific purpose of acquiring any of the Units.

 

 

 

  

4

  

 

	
  

	
3.3

	
The Investor acknowledges receipt and careful review of this Agreement, the SEC Documents and all exhibits thereto and other documents furnished in connection with this transaction and provided (collectively, the “Offering Documents”) and hereby represents that he has been furnished by the Company during the course of this transaction with all information regarding the Company which he has requested or desires to know; and that such information and documents have, in his opinion, afforded the Investor with all of the same information that would be provided him in a registration statement filed under the Act; that he has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning the terms and conditions of the Offering, and any additional information which he had requested.

 

	
  

	
3.4

	
The Investor recognizes that the purchase of the Units involves a high degree of risk in that (i) an investment in the Company is highly speculative and only Investors who can afford the loss of their entire investment should consider investing in the Company and the Units; (ii) he may not be able to liquidate his investment; (iii) transferability of the Units is extremely limited; and (iv) an Investor could suffer the loss of his entire investment, as well as other risk factors as more fully set forth herein.

 

	
  

	
3.5

	
The Investor represents and warrants that he is an “accredited investor” as such term in defined in Rule 501 of Regulation D promulgated under the Act, as indicated by his responses to the Purchaser Questionnaire and Statement (“Purchaser Questionnaire”).  The Investor further represents and warrants that the information furnished in the Purchaser Questionnaire remains accurate and complete in all material respects.

 

	
  

	
3.6

	
The Investor acknowledges that he has prior investment experience, including investment in non-listed and non-registered securities, or he has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company both to him and to all other prospective Investors in the Units and to evaluate the merits and risks of such an investment on his behalf, and that he recognizes the highly speculative nature of this investment.

 

	
  

	
3.7

	
The Investor acknowledges that this Offering may involve tax consequences and that the contents of the Offering Documents do not contain tax advice or information. The Investor acknowledges that he must retain his own professional advisors to evaluate the tax and other consequences of an investment in the Units.  The Investor acknowledges that he has had an opportunity to consult with counsel of his choice and that he must retain his own legal advisor.  The Investor has not relied on the Company, it officers, directors, or professional advisors for advise as to such consequences.

 

 

 

  

5

  

 

	
  

	
3.8

	
The Investor acknowledges that this Offering has not been reviewed by the SEC because of the Company’s representations that this is intended to be a nonpublic offering pursuant to Sections 4(2) or 4(6) of the Act and Rule 506 of Regulation D promulgated thereunder. The Investor represents that the Units are being purchased for his own account, for investment and not with a view to, or for resale in connection with, their distribution within the meaning of the Act. The Investor agrees that he will not sell or otherwise transfer the Units unless it is registered under the Act or unless an exemption from such registration is available.

 

	
  

	
3.9

	
The Investor understands that the Units have not been and will be registered under the Act, by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein.  In this connection, the Investor understands that it is the position of the SEC that the statutory basis for such exemption would not be present if his representation merely meant that his present intention was to hold such securities for a short period, such as the capital gains period of tax statutes, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Investor realizes that, in the view of the SEC, a purchase now with an intent to resell would represent a purchase with an intent inconsistent with his representation to the Company, and the SEC might regard such a sale or disposition as a deferred sale to which such exemptions are not available.

 

	
  

	
3.10

	
The Investor understands that the Units, Preferred Stock, Warrants and Common Stock underlying the Preferred Stock and Warrants, and the securities issued in respect thereof, may bear one or all of the following legends:

 

	
  

	
(i)

	
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNEC­TION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

	
  

	
(ii)

	
Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

 

 

	
  

	
3.11

	
The Investor understands that Rule 144 (“Rule 144”) promulgated under the Act requires, among other conditions, a six-month holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Act.  The Investor understands that the Company makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or its dissemination to the public of any current financial or other information concerning the Company, as is required by Rule 144 as one of the conditions of its availability.  The Investor consents that the Company may, if it desires, permit the transfer of the Units out of his name only when his request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act or any applicable state “blue sky” laws (collectively “Securities Laws”). The Investor agrees to hold the Company and its directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Purchaser Questionnaire or any sale or distribution by the undersigned Investor in violation of any Securities Laws.

 

 

 

  

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3.12

	
The Investor understands that the Company will review this Agreement and the Purchaser Questionnaire and otherwise review the financial standing of the Investor, and it is agreed that the Company reserves the unrestricted right to reject or limit any subscription.

 

	
  

	
3.13

	
The Investor hereby represents that the address of Investor furnished by him at the end of this Agreement is the undersigned’s principal residence if he is an individual or its principal business address if it is a corporation or other entity.  If a natural person, the Investor is at least 21 years of age and legally competent to execute this Agreement.

 

	
  

	
3.14

	
The Investor acknowledges that if he is a Registered Representative of a FINRA member firm, he must give such firm the notice required by FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm on the signature page hereof.

 

	
  

	
3.15

	
The Investor acknowledges that at such time, if ever, as the Units are registered, sales of such securities will be subject to state securities laws, including those of states which may require any securities sold therein to be sold through a registered broker-dealer or in reliance upon an exemption from registration.

 

	
  

	
3.16

	
Investor hereby agrees that prior to the Closing Date of this Offering, he will not sell short any shares of the Company’s Common Stock or otherwise sell any shares of the Company’s Common Stock that Investor does not own, or engage in any sale that is consummated by the delivery of the Company’s shares borrowed by or from the Investor or his affiliates.

 

	
  

	
3.17

	
If the undersigned Investor is a partnership, corporation, trust or other entity, such partnership, corporation, trust or other entity further represents and warrants that: (i) it was not formed for the purpose of investing in the Company; (ii) it is authorized and otherwise duly qualified to purchase and hold the Units; and (iii) that this Agreement has been duly and validly authorized, executed and delivered constitutes the legal, binding and enforceable obligation of the undersigned.

 

	
  

	
3.18

	
Each recipient of this Agreement understands that the fact that the Company is undertaking this offering, as well as certain information contained in this Agreement, may be considered to be material, non-public information under Regulation FD (Fair Disclosure) promulgated under the Exchange Act. Each recipient expressly agrees to maintain such information in confidence until such time as public disclosure of same is made.

 

	
  

	
3.19

	
It never has been represented, guaranteed or warranted by any broker, the Company, any of the Company’s officers, directors, stockholders, partners, employees or agents, or any other persons, whether expressly or by implication, that: (i) the Company or the undersigned will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company’s activities or the undersigned’s investment in the Company; or (ii) the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Securities or of the Company’s activities.

 

 

 

  

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3.20

	
No oral or written representations have been made other than as stated in this Agreement, and no oral or, written information furnished to the undersigned or the undersigned’s advisor(s) in connection with the Offering were in any way inconsistent with the information stated in this Agreement.

 

	
  

	
3.21

	
The undersigned is not entering into this Agreement as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, posted on the Internet, or presented at any seminar or meeting, any registration statement of the Company on file with the SEC at any time prior to the Closing [EMPHASIS ADDED] or any solicitation of a subscription by a person other than a representative of the Company with which the undersigned had a pre-existing relationship in connection with investments in securities generally.

 

	
  

	
3.22

	
The undersigned understands that the net proceeds (see Article VI) from this Offering (after deduction for expenses of the Offering, including the fees and expenses payable to a FINRA member firm) will be used in all material respects for the purposes set forth under “Use of Proceeds” in Article VI below.

 

	
  

	
3.23

	
The undersigned acknowledges that the representations, warranties and agreements made by the undersigned herein shall survive the execution and delivery of this Agreement and the purchase of the Units.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents and warrants to each Investor on the date hereof and at the Closing Date:

 

	
  

	
4.1

	
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of  Nevada and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties.

 

	
  

	
4.2

	
This Agreement, the Units, Preferred Stock, Warrants and underlying Common Stock have been duly authorized by the Board of Directors of the Company and its shareholders. This Agreement and the Certificate of Designation shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

 

 

  

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4.3

	
The execution, delivery and performance of this Agreement by the Company will have been duly approved by the Board of Directors of the Company and all other actions required to authorize and effect the offer and sale of the Units contained herein will have been duly taken and approved.

 

	
  

	
4.4

	
The Units, Preferred Stock, Warrants and underlying Common Stock have been duly and validly authorized and when issued and paid for in accordance with the terms hereof, will be duly and validly issued, fully paid and non-assessable and the shares of underlying Common Stock will not be issued in violation of any preemptive or other rights of stockholders known to the Company.

 

	
  

	
4.5

	
The Company has obtained, or is in the process of obtaining, all licenses, permits and other governmental authorizations necessary to the conduct of its business; such licenses, permits and other governmental authorizations obtained are in full force and effect; and the Company is in all material respects complying therewith.

 

	
  

	
4.6

	
The Company knows of no pending or threatened legal or governmental proceedings to which the Company is a party, which could materially adversely affect the business, property, financial condition or operations of the Company.

 

	
  

	
4.7

	
The Company is not in violation of or has been notified of a default under, nor will the execution and delivery of this Agreement, the issuance of the Units, and the incurrence of the obligations herein and therein set forth and the consummation of the transactions herein or therein contemplated, result in a violation of, or constitute a default under, the Company’s articles of incorporation or by-laws, any material obligations, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness or in any material contract, indenture, mortgage, loan agreement, lease, joint venture or other agreement or instrument to which the Company is a party or by which it or any of its properties may be bound or any material order, rule, regulation, writ, injunction, or decree of any government, governmental instrumentality or court, domestic or foreign.

 

	
  

	
4.8

	
We are authorized to issue One Hundred Million (100,000,000) shares of $0.001 par value common stock of which 13,807,807 shares (exclusive of 4,500,000 shares issuable to the Shareholders of Xnergy, Inc.) are issued and outstanding as of the date of this Agreement.  Each outstanding share of Common Stock is duly authorized, validly issued, fully paid and non assessable.  We are authorized to issue Twenty Five Million (25,000,000) shares, of $0.001 per share, preferred stock, none of which are outstanding.  The Company does not own or have any contract to acquire, any equity securities or other securities of any person or any, direct or indirect, equity or ownership interest in any other business.

 

	
  

	
4.9

	
Except for a Form D filing with the SEC and any required blue sky filings, no consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any federal, state, local or other governmental authority or any court or any other tribunal is required by the Company for the execution, delivery or performance by the Company of this Agreement or the execution, issuance, sale or delivery of the Units.

 

 

 

  

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4.10

	
No consent of any party to any material contract, agreement, instrument, lease, license, arrangement or understanding to which the Company is a party or to which any of its properties or assets are subject is required for the execution, delivery or performance by the Company of this Agreement, or the execution, issuance, sale or delivery of the Securities.

 

ARTICLE V

CONDITIONS TO CLOSING

 

	
  

	
5.1

	
Conditions of the Investors’ Obligations at Closing.

 

(a)      Conditions of the Investors’ Obligations at Each Closing. The obligations of each Investor to the Company to subscribe for the Units at the Closing in accordance with the provisions of this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

(i)      Representations and Warranties.  The representations and warranties of the Company contained in Article IV shall be true on and as of each Closing with the same effect as though such representations and warranties had been made on and as of the date of each Closing.

 

(ii)      Qualifications.  All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Units pursuant to this Agreement shall be obtained and effective as of the Initial Closing.

 

(iii) Receipt of Securities.  The Investors shall have received such Units and the executed Agreement duly executed by the Company and acceptable in all respects to the Investors.

 

 

(iv)  Corporate Proceedings; Consents, etc.  All consents and other proceedings to be taken and all waivers and consents to be obtained in connection with the transactions contemplated by the Agreements shall have been taken or obtained.

 

	
  

	
5.2

	
Conditions of the Company’s Obligations at Closing.  The obligations of the Company to each Investor under this Agreement are subject to the fulfillment, on or before both the Closing, of each of the following conditions, unless otherwise waived:

 

(a)      Representations and Warranties.  The representations and warranties of each Investor contained in Article III shall be true on and as of each Closing with the same effect as though such representations and warranties had been made on and as of such Closing.

 

 

 

  

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(b)      Qualifications.  All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of each Closing.

 

(c)      Receipt of Funds and Agreement. The Company shall have received the Offering Price for the Securities, the signature page to this Agreement and the Purchaser Questionnaire and Statement if required.

 

ARTICLE VI

USE OF PROCEEDS

If all of the Securities are sold (including the over-subscription option), the Company will receive gross proceeds of $3,000,000 prior to deducting expenses of this Offering of approximately $12,000 of offering expenses including legal, accounting, printing, Blue Sky and other miscellaneous expenses.  The Company currently intends to use the net proceeds  approximately as follows:

 

	
General & Administrative:

	 	$	500,000	 
	
Working Capital

	 	$	738,000	 
	
Acquisitions:

	 	$	1,750,000	 
	
Total

	 	$	2,988,000	 

 

    The Company reserves the right to change the ratio and the total dollars committed to each category, based upon management’s evaluation and determination of the best use for the proceeds at the time proceeds are disbursed.

 

ARTICLE VII

REGISTRATION RIGHTS

The Common Stock underlying the Preferred Stock and the Warrants will be included in the S-1 Registration Statement which the Company is expected to file in October 2011, for those investors who have subscribed and paid for their shares before the filing.  Investors who file after the S-1 Registration Statement has been filed will be added to the first amendment filed by the Company during the review process.  There can be no assurance that the SEC will allow shares to be added at that stage of the process.

 

ARTICLE VIII

MISCELLANEOUS

 

	
  

	
8.1

	
Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, addressed to the Company, and to the Investor at his address indicated on the signature page of this Agreement. Notices shall be deemed to have been given on the date of mailing, except notices of change of address, which shall be deemed to have been given when received.

 

 

  

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8.2

	
This Agreement shall not be changed, modified or amended except by a writing signed by the parties to be charged, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the party to be charged.

 

	
  

	
8.3

	
This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

 

	
  

	
8.4

	
Notwithstanding the place where this Agreement may be executed by any of the  parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the law of the State of Nevada. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in Nevada and they hereby submit to the exclusive jurisdiction of the courts of the State of Nevada with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale of the securities hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in care of the address set forth below or such other address as the undersigned shall furnish in writing to the other.

 

	
  

	
8.5

	
This Agreement may be executed in counterparts. Upon the execution and delivery of this Agreement by the Investor, this Agreement shall become a binding obligation of the Investor with respect to the purchase of the purchased Units as herein provided; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other subscribers and to add and/or to delete other persons as subscribers.

 

	
  

	
8.6

	
The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.

 

	
  

	
8.7

	
It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

 

	
  

	
8.8

	
The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

 

  

12

  

 

	
  

	
8.9

	
The Company agrees not to disclose the names, addresses or any other information about the Investors, except as required by law, provided, that the Company may use information relating to the Investor in any registration statement under the Act with respect to the Units.

 

	
  

	
8.10

	
Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below or as subsequently modified by written notice.

 

	
  

	
8.11

	
Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction.  Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which each Investor or any of its officers, employees, or representatives is responsible.  The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

	
  

	
8.12

	
This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements, including any term sheet or memorandum of understanding relating to the transaction contemplated by this Agreement, existing between the parties hereto are expressly canceled.

 

	
  

	
8.13

	
Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement (except as provided in Sections 8.3 and 8.13).

 

ARTICLE IX

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

 

Statements in this Agreement are certain statements which are not historical or current fact and constitute “forward-looking statements” within the meaning of such term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual financial or operating results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statement. Such forward-looking statements are based on our best estimates of future results, performance or achievements, based on current conditions and the most recent results of the Company.  In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “may,” “will,” “potential,” “opportunity,” “believes,” “belief,” “expects,” “intends,” “estimates,” “ anticipates” or “plans” to be uncertain and forward-looking.  The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company’s reports and registration statements filed with the Securities and Exchange Commission.  Consequently, all of the forward-looking statements made in this Agreement are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business or operations.

 

 

  

13

  

 

 

ARTICLE X

BLUE SKY LEGENDS

 

NASAA UNIFORM LEGEND

 

IN MAKING AN INVESTMENT DECISION INVESTORS SHOULD RELY ONLY  ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS OF THE SECURITIES SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

14

  

 

IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year set forth below.

 

	
 

 

(a)__________________

Signature of Investor

	
 

 

_______________________

Signature of Co-Investor

	
 

 

____________________

Printed Name of Investor

	
 

 

_______________________

Printed Name of Co-Investor

	
 

 

____________________

 

____________________

Address of Investor

	
 

 

____________________

 

____________________

Address of Co-Investor

	
 

 

____________________

Social Security Number of Investor

	
 

 

____________________

Social Security Number of Co-Investor

	
 

(b)  If Entity Investor:

 

By: ________________                                                          

 

	  
	
 

Name:

Title: _________________                                      

 

	  
	
 

__________________

 

__________________

Address of Investor

	  
	
 

___________________

Taxpayer Identification Number of Investor

	  

 

 

	
 

(c) ________________

Number of Units

	
 

    X $100,000 =

	
 

$ __________________                                 

Amount of Investment

 

 

  

15

  

	
*If Investor is a Registered Representative with a FINRA member firm, have the following acknowledgement signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges receipt of the notice required by Rule 3050 of the FINRA Conduct Rules.

 

____________________________

Name of FINRA Member Firm

 

 

By:_________________________                                                                

Authorized Officer

	
Subscription Accepted:

 

Blue Earth, Inc.

 

By:          ________________________                                            

Johnny R. Thomas, Chief

Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

16bblu_ex10-2.htm

Exhibit 10.2

 

 

 

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“1933 ACT”) OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE SALE, ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS WARRANT IS PROHIBITED EXCEPT PURSUANT TO REGISTRATION UNDER THE 1933 ACT; OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, AND ANY CERTIFICATE REPRESENTING WARRANT SHARES SHALL BEAR A LEGEND TO SUCH EFFECT.

2010-A- _________                  

WARRANT TO PURCHASE SHARES

OF THE COMMON STOCK OF

BLUE EARTH , INC.

(Void after Expiration Date – December 31, 2013)

Issue Date as of: December 31, 2010

     This certifies that ___________________________ or his successors or assigns (“Holder”) shall be entitled to purchase from Blue Earth, Inc., a Nevada corporation (“Company”), having its principal place of business at 2298 Horizon Ridge Parkway, Suite 205, Henderson, NV 89052, __________ fully paid and non-assessable shares (“Warrant Shares”) of the Company’s common stock, par value $.001 per share (“Common Stock”), at a price per share equal to the Exercise Price (as defined below).

     This Warrant is being issued to the Holder in connection with the distribution (the “Offering”) of one Class A Warrant for each two (2) shares of Common Stock held of record by each stockholder of the Company on December 31, 2010.  This Warrant is one of several which will be identical except for names and amounts.

     The initial exercise price (“Exercise Price”) of this Warrant will be equal to $3.00 per share, subject to redemption and/or a temporary reduction by the Company as described in Sections 16 and 2.1, respectively, below.

     This Warrant shall be immediately exercisable into shares of Common Stock at any time, or from time-to-time, commencing upon the effective date (the “Effective Date”) of a Registration Statement including the Warrant Shares and up to and including 5:00 p.m. (Pacific Coast time) on December 31, 2013  (“Expiration Date”), unless previously called or extended by the Company on thirty (30) days’ prior written notice; provided, however, if such date is not a Business Day, then on the Business Day immediately following such date. This Warrant is exercisable in whole or in part upon the surrender to the Company at its principal place of business (or at such other location as the Company may advise the Holder in writing) of this Warrant properly endorsed with a form of subscription in substantially the form attached hereto duly filled in and signed and, if applicable, upon payment in cash or by check of the aggregate Exercise Price for the number of shares for which this Warrant is being exercised as determined in accordance with the provisions hereof.

     Upon the exercise of this Class A Warrant for the $3.00 Exercise Price, the Holder shall receive one share of Common Stock and a Class B Common Stock Purchase Warrant (“Class B Warrant”) to purchase one share of Common Stock at $6.00 per share, subject to redemption and/or temporary reduction by the Company. The Class B Warrant shall be exercisable into shares of Common Stock at any time, or from time-to-time, up to and including 5:00 p.m. (Pacific Coast time) on the third anniversary date from the date of the last issuance of the Class B Warrants (“Class B Expiration Date”), unless previously called or extended by the Company on thirty (30) days’ prior written notice; provided, however, if such date is not a Business Day, then on the Business Day immediately following such date.

     Upon the exercise of the Class B Warrant for the $6.00 Exercise Price, the Holder shall receive one share of Common Stock and a Class C Common Stock Purchase Warrant (“Class C Warrant”) to purchase one share of Common Stock at $12.00 per share, subject to redemption and/or temporary reduction by the Company. The Class C Warrant shall be exercisable into shares of Common Stock at any time, or from time-to-time, up to and including 5:00 p.m. (Pacific Coast time) on the third anniversary date from the date of the last issuance of the Class C Warrants (“Class C Expiration Date”), unless previously called or extended by the Company on thirty (30) days’ prior written notice; provided, however, if such date is not a Business Day, then on the Business Day immediately following such date.

 

  

  

  

	
1.

	  	
Exercise; Issuance of Certificates; Payment for Shares.

 

	  	
1.1

	  	
General. This Warrant is exercisable in full, or in part, in increments of 100 shares, except for the holders of less than 100 Warrant Shares (which shall be exercised in full), or the final exercise which shall be for the remainder, at the option of the Holder of record at any time or from time, to time, up to the Expiration Date for all of the shares of Common Stock (but not for a fraction of a share) which may be purchased hereunder. In the case of the exercise of less than all of the Warrants represented hereby, the Company shall cancel this Warrant Certificate upon the surrender hereof and shall execute and deliver a new Warrant Certificate or Warrant Certificates of like tenor for the balance of such Warrants. The Company agrees that the shares of Common Stock purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which the exercise notice (attached hereto as Schedule A or B) is delivered to the Company via facsimile; provided, however, that in such case this Warrant shall be surrendered to the Company within three (3) business days. Certificates for the shares of Common Stock so purchased, together with any other securities or property to which the Holder is entitled upon such exercise, shall be delivered to the Holder by the Company at the Company ’s expense within a reasonable time after the rights represented by this Warrant have been so exercised, and in any event, within three business days of such exercise and delivery of the Exercise Price. The Company shall, no later than the close of business on the first business day following the date on which the Company receives the exercise notice by facsimile transmission issue and deliver to the Company’ s Transfer Agent irrevocable instructions to issue and deliver or cause to be delivered to such Holder the number of Warrant Shares exercised within two business days thereafter by either express mail or hand delivery. Notwithstanding the foregoing, delivery of the Warrant Shares is contingent upon receipt of the Exercise Price in cleared U.S. funds within two business days following the Company’s receipt of the exercise notice. Each Common Stock certificate so delivered shall be in such denominations of 100 or more shares of Common Stock (except for the remainder), in increments of 100 or more, as may be requested by the Holder hereof and shall be registered on the Company’s books in the name designated by such Holder.

	  	  	  
	  	  	  	  
	  	
1.2

	  	
Exercise for Cash.

	  	  	  	  
	  	  	  	
This Warrant may be exercised, in whole at any time or in part from time to time, prior to 5:00 P.M., Pacific Coast time, December 31, 2013, unless previously called or extended by the Company, by the Holder by the facsimile delivery of the exercise notice, as attached hereto, on the date of the exercise and by surrender of this Warrant within three (3) business days from the exercise day at the address set forth hereof, together with proper payment of the aggregate Exercise Price payable hereunder for the Warrant Shares (“Aggregate Warrant Price”), or the proportionate part thereof if this Warrant is exercised in part. Payment for the Warrant Shares shall be made by wire, certified or bank check or check payable to the order of the Company. If this Warrant is exercised in part, this Warrant must be exercised for a number of whole shares of the Common Stock, and the Holder is entitled to receive a new Warrant covering the Warrant Shares which have not been exercised and setting forth the proportionate part of the Aggregate Warrant Price applicable to such Warrant Shares. Upon such surrender of this Warrant, the Company will (a) issue a certificate or certificates in the name  of the Holder for the largest number of whole shares of the Common Stock to which the Holder shall be entitled and (b) deliver the other securities and properties receivable upon the exercise of this Warrant, or the proportionate part thereof if this Warrant is exercised in part, pursuant to the provisions of this Warrant.

	  	  	  	  
	  	
1.3

	  	
Exercise for Non-Cash Consideration.

	  	  	  	  
	  	  	  	
In case any portion of the consideration to be received by the Company shall be in a form other than cash, then such Exercise Price shall be measured to that extent by the fair market value of such non-cash consideration. The Exercise Price may be tendered in the form of notes, exchanges, services, goods and any and all consideration deemed acceptable by the Company. The fair market value shall be determined solely in good faith by the Board of Directors of the Company, without need for disclosure of fair market value calculation.

	  	  	  	  

 

 

  

2

  

	
1.4

	  	
Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any shareholder and free of all taxes, liens and charges with respect to the issue thereof. The Company further covenants and agrees that, during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this Warrant, a sufficient number of shares of authorized but unissued Common Stock, when and as required to provide for the exercise of the rights represented by this Warrant. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the Common Stock or other securities may be listed; provided, however, that the Company shall not be required to effect a registration under federal or state securities laws with respect to such exercise other than as required by Section 7.7 herein. The Company will not take any action which would result in any adjustment of the Exercise Price if the total number of shares of Common Stock issuable after such action upon exercise of all outstanding warrants, together with all shares of Common Stock then outstanding and all shares of Common Stock then issuable upon exercise of all options and upon the conversion of all convertible securities then outstanding, would exceed the total number of shares of Common Stock or equity securities then authorized by the Company’s Certificate of Incorporation, as amended (“ Company Charter”).

	  	  
	  	  
	1.5	 	  	
BUY-IN. In addition to any other rights available to a Holder, if the Company fails to deliver to the Holder a certificate representing Warrant Shares by the third Trading Day after the date on which delivery of such certificate is required by this Warrant, and if after such third Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder on or after the Exercise Date of the Warrant Shares that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Price on the date of the event giving rise to the Company’s obligation to deliver such certificate. Notwithstanding the foregoing, the Company shall have no liability under this subsection for the Buy-In Price if it has complied with the requirements of subsection 1.1 above and, notwithstanding it using its best efforts to have its transfer agent deliver the Warrant Shares to the Holders within three trading days of the Holder’s request, such Warrant Shares are not delivered on a timely basis.

2. Determination or Adjustment of Exercise Price and Number of Shares. The Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 2. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment.

	  	
2.1

	  	
Adjustment of Exercise Price: Temporary Reduction. Upon written Notice as provided for herein, at the sole discretion of the Company, the Exercise Price of this Warrant may be temporarily reduced. At the end of such discretionary reduction period, the price shall revert back to the defined Exercise Price.

	  	  	  	  
	  	
2.2

	  	
Subdivision or Combination of Common Stock. In case the Company shall at any time subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock of the Company shall be combined or reclassified into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.

  

3

  

	  	
2.3

	  	
Dividends in Common Stock, Other Stock, Property, Reclassification. If at any time or from time to time the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become entitled to receive, without payment therefore:

 

	  	
2.3.1

	  	
Stock, Common Stock or any shares of capital stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution,

	  	  	  	  
	  	
2.3.2

	  	
Any cash paid or payable otherwise than as a cash dividend, or

	  	  	  	  
	  	
2.3.3

	  	
Stock, Common Stock or additional capital stock or other securities or property (including cash) by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement, (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 2.1 above), then and in each such case, the Holder hereof shall, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock or other capital stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to in clause (2.3.2) above and this clause (2.3.3)) which such Holder would hold on the date of such exercise had he been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property.

 

	  	
2.4

	  	
Reorganization, Reclassification, Consolidation, Merger or Sale.

 

	  	
2.4.1

	  	
If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property (an “Organic Change”), then, as a condition of such Organic Change, lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right, upon exercise of this Warrant, to purchase and receive (in lieu of the shares of the Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. The Company will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or the corporation purchasing such assets shall assume by written instrument executed and mailed or delivered to the Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder, upon Holder’s exercise of this Warrant and payment of the purchase price in accordance with the terms hereof, such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase.

 

 

 

  

4

  

	  	
2.4.2

	  	
No adjustment of the Exercise Price, however, shall be made in an amount less than $.01 per Share, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which together with any adjustments so carried forward shall amount to $.01 per Share or more.

 

2.5 Certain Events. If any change in the outstanding Common Stock of the Company or any other event occurs as to which the other provisions of this Section 2 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder of the Warrant in accordance with such provisions, then the Board of Directors of the Company shall make an adjustment in the number and class of shares available under the Warrant, the Exercise Price or the application of such provisions, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Holder of the Warrant upon exercise for the same aggregate Exercise Price the total number, and kind of shares as he would have owned had the Warrant been exercised prior to the event and had he continued to hold such shares until after the event requiring adjustment.

	  	
2.6

	  	
Notices of Change.

	  	  	  	  
	  	
2.6.1

	  	
Upon any determination or adjustment in the number or class of shares subject to this Warrant and of the Exercise Price, the Company shall give written notice thereof to the Holder, setting forth in reasonable detail and certifying the calculation of such determination or adjustment.

	  	  	  	  
	  	
2.6.2

	  	
The Company shall give written notice to the Holder at least 20 days prior to the date on which the Company closes its books or takes a record for determining rights to receive any dividends or distributions.

	  	  	  	  
	  	
2.6.3

	  	
The Company shall also give written notice to the Holder at least 20 days prior to the date on which an Organic Change shall take place.

3. Issue Tax. The issuance of certificates for shares of Common Stock upon the exercise of the Warrant shall be made without charge to the Holder of the Warrant for any issue tax (other than any applicable income taxes) in respect thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then Holder of the Warrant being exercised.

4. Closing of Books.  The Company will at no time close its transfer books against the transfer of any warrant or of any shares of stock issued or issuable upon the exercise of any warrant in any manner which interferes with the timely exercise of this Warrant.

5. No Voting or Dividend Rights; Limitation of Liability. Nothing contained in this Warrant shall be construed as conferring upon the Holder hereof the right to vote as a shareholder of the Company. No dividends or interest shall be payable or accrued in respect of this Warrant, the interest represented hereby, or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised, subject to the Holder’s rights under Section 2 of this Warrant. The Holder of this Warrant shall receive all notices as if a shareholder of the Company. No provisions hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of such Holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by its creditors.

6. Rights and Obligations Survive Exercise of Warrant. The rights and obligations of the Company, of the Holder of this Warrant and of the holder of Warrant Shares issued upon exercise of this Warrant, shall survive the exercise of this Warrant.

7. Further Representations, Warranties and Covenants of the Company.

 

 

  

5

  

	  	
7.1

	  	
Articles and Bylaws. The Company has made available to the Holder true, complete and correct copies of the Company’s Charter and Bylaws, as amended, through the date hereof.

	  	  	  	  
	  	
7.2

	  	
Due Authority. The execution and delivery by the Company of this Warrant and the performance of all obligations of the Company hereunder, including the issuance to Holder of the right to acquire the shares of Common Stock, have been duly authorized by all necessary corporate action on the part of the Company, and the Warrant is not inconsistent with the Company Charter or Bylaws and constitutes a legal, valid and binding agreement of the Company, enforceable in accordance with its terms.

	  	  	  	  
	  	
7.3

	  	
Consents and Approvals. No consent or approval of, giving of notice to, registration with, or taking of any other action in respect of any state, federal or other governmental authority or agency is required with respect to the execution, delivery and performance by the Company of its obligations under this Warrant, except for  any filing required by applicable federal and state securities laws, which filing will be effective by the time required thereby.

	  	  	  	  	  	  
	  	
7.4

 

	
Issued Securities. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable. All outstanding shares of capital stock were issued in full compliance with all federal and state securities laws.

	  	  	  	  
	  	
7.5

	  	
Exempt Transaction. Subject to the accuracy of the Holder’s representations in Section 8 hereof, the issuance of this Warrant will constitute a transaction exempt from (i) the registration requirements of Section 5 of the 1933 Act , in reliance upon the issuance not deemed to be a sale under Section (2)(a)(3) of the 1933 Act, and (ii) the qualification requirements of the applicable state securities laws.

	  	  	  	  
	  	
7.6

	  	
Compliance with Rule 144. At the written request of the Holder, who proposes to sell Common Stock issuable upon the exercise of the Warrant in compliance with Rule 144 promulgated by the SEC, the Company shall furnish to the Holder, within five (5) days after receipt of such request, a written statement confirming the Company’s compliance with the filing requirements of the SEC as set forth in such Rule, as such Rule may be amended from time to time.

	  	  	  	  
	  	
7.7

	  	
Registration. The Company hereby grants to the Holder in respect of the Warrant Shares, and any securities of the Company into which the Warrant Shares are convertible, “piggy-back” registration rights. For a seven-year period commencing with the final closing of the Offering, if the Company shall file a registration statement other than on Form S-4, S-8, or their successor forms, it shall provide the Holder with at least ten (10) days prior notice of its filing such registration statement and the opportunity for the Holder to register its Shares, subject to any limitations issued by an underwriter in an underwritten public offering.

 

	
8.

	  	
Representations and Covenants of the Holder.

	  	
8.1

	  	
This Warrant has been entered into by the Company in reliance upon the following representations and covenants of the Holder:

	  	
8.1.1

	  	
Disposition of Holders Rights. In no event will the Holder make a disposition of the Warrant or the Common Stock issuable upon exercise of the Warrant unless and until (i) it shall have notified the Company of the proposed disposition, and (ii) if requested by the Company, it shall have furnished the Company with an opinion of counsel (which counsel may either be inside or outside counsel to the Holder) satisfactory to the Company and its counsel to the effect that (A) appropriate action necessary for compliance with the 1933 Act has been taken, or (B) an exemption from the registration requirements of the 1933 Act is available. Notwithstanding the foregoing, the restrictions imposed upon the transferability of any of its rights to acquire Common Stock issuable on the exercise of such rights do not apply to transfers from the beneficial owner of any of the aforementioned securities to its nominee or from such nominee to its beneficial owner, and shall terminate as to any particular share of stock when (1) such security shall have been effectively registered under the 1933 Act and sold by the Holder thereof in accordance with such registration or (2) such security shall have been sold without registration in compliance with Rule 144 under the 1933 Act. Whenever the restrictions imposed hereunder shall terminate, as hereinabove provided, the Holder or holder of a share of stock then outstanding as to which such restrictions have terminated shall be entitled to receive from the Company, without expense to such Holder, one or more new certificates for the Warrant or for such shares of stock not bearing any restrictive legend.

 

 

  

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8.1.2

	  	
Risk of No Registration. The Holder understands that if the Company does not file reports pursuant to Section 15(d) and/or Section 12(g), of the Securities Exchange Act of 1934 (“1934 Act”), or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell (i) the Warrant, or (ii) the Common Stock issuable upon exercise of the Warrant, it may be required to hold such securities for an indefinite period unless this Warrant is exercised for non-cash consideration as set forth in Section 1.3 above. The Holder also understands that any sale of the Warrant or the Common Stock issuable upon exercise of the Warrant which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.

 

9. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by (a) the party against which enforcement of the same is sought or (b) the Company and the holders of at least a majority of the number of shares into which the Warrants are exercisable (without regard to any limitation contained herein on such exercise), it being understood that upon the satisfaction of the conditions described in (a) and (b) above, each Warrant (including any Warrant held by the Holder who did not execute the agreement specified in (b) above) shall be deemed to incorporate any amendment, modification, change or waiver effected thereby as of the effective date thereof. Notwithstanding the foregoing, no modification to this Section 9 will be effective against any Holder without his consent.

10. Transfer of this Warrant. The Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant, in whole or in part, as long as such sale or other disposition is made pursuant to an effective registration statement or an exemption from the registration requirements of the 1933 Act. Upon such transfer or other disposition (other than a pledge), the Holder shall deliver this Warrant to the Company together with a written notice to the Company, substantially in the form of the Transfer Notice attached hereto as Exhibit B (the “Transfer Notice”), indicating the person or persons to whom this Warrant shall be transferred and, if less than all of this Warrant is transferred, the number of Warrant Shares to be covered by the part of this Warrant to be transferred to each such person. Within three (3) Business Days of receiving a Transfer Notice and the original of this Warrant, the Company shall deliver to the each transferee designated by the Holder another Warrant(s) of like tenor and terms for the appropriate number of Warrant Shares and, if less than all this Warrant is transferred, shall deliver to the Holder another Warrant for the remaining number of Warrant Shares.

11. Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given upon (i) personal delivery, against written receipt thereof, (ii) delivery via facsimile or e-mail as set forth below (iii) two business days after deposit with Federal Express or another nationally recognized overnight courier service, or (iv) five business days after being forwarded, postage paid, via certified or registered mail, return receipt requested, addressed to each of the other parties thereunto entitled at the following addresses, or at such other addresses as a party may designate by ten days advance written notice.

12. Binding Effect on Successors; Benefit. As provided in Section 2.4 above, this Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets. All of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise and termination of this Warrant. All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder hereof. This Warrant shall be for the sole and exclusive benefit of the Holder and nothing in this Warrant shall be construed to confer upon any person other than the Holder any legal or equitable right, remedy or claim hereunder.

13. Descriptive Headings and Governing Law. The description headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by the laws of the State of Nevada.

14. Lost Warrants. The Company represents and warrants to the Holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant, the Company, at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.

 

 

  

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15. Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the Holder entitled to such fraction a sum in cash equal to such fraction multiplied by the then effective Exercise Price.

16. Redemption. This Warrant may be redeemed at the option of the Company, at a redemption price (the “Redemption Price”) of $.001 per Warrant at any time upon twenty (20) days’ prior written notice. On and after the date fixed for redemption, the Holder shall have no rights with respect to this Warrant except to receive the $.001 per Warrant upon surrender of this Certificate. The Company covenants and agrees that it will honor all Exercise Notices tendered through the Business Day immediately preceding the Redemption Date. The redemption payment shall be made in cash on the date fixed for redemption in the Company’s notice of redemption, as described below (the “Redemption Date”). The redemption payment is due in full on the Redemption Date. Notwithstanding anything to the contrary contained in this Warrant, the Company shall have the option, without further compensation to the Holder other than the payment of the Redemption Price per Warrant, to cause any or all of the Warrants (each, a “non-Exercised Warrant”) which were not properly exercised on or before the Redemption Date to be assigned to one or more third parties (each, a “ Standby Purchaser”), effectively immediately upon the Redemption Date, for the consideration equal to $.001 per Non-Exercised Warrant payable to the Company, and (c) each Standby Purchaser shall have the right to exercise the Non-Exercised Warrants so assigned to such Standby Purchaser through the tenth business day following the Redemption Date.

     The notice of redemption shall specify: (i) the Redemption Price; (ii) the date not more than twenty (20) days from mailing which is fixed for redemption (the “Redemption Date”); (iii) the place where Warrant Certificates shall be delivered and the redemption price paid; and (iv) that the right to exercise the Warrants shall terminate at 5:00 p.m. (Pacific Coast time) on the Business Day immediately preceding the Redemption Date. An affidavit of the Secretary or an Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be conclusive evidence of the facts stated therein.

     From and after the Redemption Date, the Company shall, at the place specified in the notice of redemption, upon presentation and surrender to the Company by or on behalf of the Holder thereof of this Warrant, deliver or cause to be delivered to or upon the written order of such holder a sum of cash equal to the Redemption Price of each such Warrant. From and after the Redemption Date and upon the deposit or setting aside by the Company of a sum sufficient to redeem all the Warrants called for redemption, such Warrants shall expire and become void and all rights hereunder and shall cease, except the right, if any, to receive payment of the Redemption Price.

     In Witness Whereof, the Company has caused this Warrant to be duly executed by its officers, thereunto duly authorized this

     Dated: _____________, 2011

	  	
Blue Earth, Inc.

a Nevada corporation

 

	  
	  	
By:  

	  	  
	  	  	
Name:  

	
Johnny R. Thomas 

	  
	  	  	
Title:  

	
CEO

	  
	  	  	
Address:

2298 Horizon Ridge Parkway, Suite 205 Henderson, NV 89052

	  

 

 

  

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SCHEDULE A

SUBSCRIPTION FORM

Date:                                         ,                     

Blue Earth, Inc. — Attn: CEO

Ladies and Gentlemen:

    

The undersigned hereby elects to exercise the Warrant issued to it by Blue Earth, Inc. (“Company”) and dated ________________ 2011, (“Warrant”) and to purchase thereunder _______ shares of the Common Stock of the Company (“ Shares”) at a purchase price of  $_____ per Share or an aggregate purchase price of ____________ Dollars ($___) (“Exercise Price”).

Pursuant to the terms of the Warrant, the undersigned has delivered the Exercise Price herewith in full in cash or by certified check or wire transfer.

Very truly yours,

_____________________

Signature

_____________________

Print Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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SCHEDULE B

TRANSFER NOTICE

To Be Executed by the Holder

in Order to Assign Warrants

FOR VALUE RECEIVED,

                                                             hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

	  	  	  	  	  
	  	  	  	  	
  

	  	  	  	  	  
	  	  	  	  	
  

	  	  	  	  	  
	  	  	  	  	
  

	  	  	
[please print or type name and address]

	  	  

                                         of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints                                          Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.

	  	  	  	  	  	  	  	  	  	  	  
	
Dated:

	  	  	  	  	  	  	
x 

	
 

 

Signature Guaranteed

	  	  

THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE NEW YORK STOCK EXCHANGE, NYSE AMEX, PACIFIC STOCK EXCHANGE OR MIDWEST STOCK EXCHANGE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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