LOC AGREEMENT

This LOC AGREEMENT (this “Agreement”) is made and entered into effective as of March 9, 2012 by and between HELIX BIOMEDIX, INC., a Delaware corporation (the “Company”), and Frank T. Nickell (“Nickell”) and supersedes in its entirety that certain LOC Agreement by and between the Company and Nickell dated effective as of March 6, 2012.

RECITALS

WHEREAS, Nickell has arranged for a line of credit (the “LOC”) to be extended to the Company by Nickell’s bank as set forth in Exhibit A hereto; and

WHEREAS, in consideration therefor, the Company hereby agrees as provided herein;

AGREEMENT

NOW, THEREFORE, in consideration of the premises, the mutual covenants of the parties hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.  Line of Credit.  Nickell hereby agrees to use commercially reasonable efforts to arrange for and maintain the LOC extended to the Company by Nickell’s bank as set forth in Exhibit A hereto.

2.  Equity Financing and Repayment.  The Company shall use commercially reasonable efforts to consummate an equity financing prior to the termination date of the LOC in which it would sell and issue shares of its Common Stock at a price per share of at least $0.60 for aggregate proceeds of at least $3,000,000, upon consummation of which all amounts outstanding under the LOC shall be immediately repaid, provided that all amounts outstanding under the LOC shall be repaid in any event no later than July 1, 2014.

3.  Warrant.  The Company shall grant to Nickell a five-year fully vested warrant to purchase 2,000,000 shares of the Company’s Common Stock at an exercise price equal to the closing price of the Company’s Common Stock on the date of grant.

4.  Miscellaneous.

4.1  Governing Law.  This Agreement shall in all respects be governed by and construed and enforced in accordance with the laws of the State of Washington, as such laws apply to contracts entered into and wholly to be performed within such state.

4.2  Successors and Assigns.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

4.3  Entire Agreement; Amendment.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

4.4  Expenses.  The Company shall reimburse Nickell for Nickell’s reasonable expenses in connection with the LOC, including, without limitation, any interest accrued and payable by Nickell in connection with the LOC.

5.5  Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the party or parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

	HELIX BIOMEDIX, INC.			NICKELL:
By:	/s/ R. Stephen Beatty			/s/ Frank T. Nickell
	R. Stephen Beatty, President and			Frank T. Nickell
	Chief Executive Officer