EXHIBIT 4.1
NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (the "AGREEMENT") is made and entered into
on this _____ day of _________ 2007, by and between _____________________, an
individual residing in Canada ("LENDER"), and RECLAMATION CONSULTING AND
APPLICATIONS, INC., a corporation duly organized and validly existing under the
laws of the State of Colorado ("BORROWER").
In consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:
ARTICLE I
PROMISSORY NOTE
1.1 ESTABLISHMENT OF THE LOAN. Lender agrees, on the terms and conditions set
forth in this Agreement, to lend to the Borrower U.S. $____________ (the
"PRINCIPAL") as the "LOAN". Immediately upon the execution of this
Agreement, Lender shall wire the Principal into Borrower's escrow
account, using instructions to be provided by the Borrower.
1.2 EVIDENCE OF INDEBTEDNESS. Indebtedness of Borrower to Lender in respect
of the Loan will be evidenced by a promissory note (the "NOTE")
substantially in the form of Schedule A attached hereto, which will be
provided by the Borrower to the Lender within five business days
following the date the Loan is advanced under subsection 1.1. The Note
shall be dated as of the date that the Loan is received by Borrower (the
"ISSUE DATE").
1.3 MATURITY DATE. All principal, plus all accrued but unpaid interest on
Note, shall be due and payable on the date that is one year from the
Issue Date (the "MATURITY DATE").
1.4 INTEREST. Borrower will pay simple interest to Lender on the unpaid
Principal from the issue date of the Note at a rate of 12% per annum
until the Loan is repaid in full. In the event that the Loan is not
repaid on or before the Maturity Date, interest shall continue to accrue
on the unpaid Principal until the Loan repaid in full.
1.5 REPAYMENT OF THE LOAN. Borrower will repay the Principal and any accrued
but unpaid interest to the Borrower on or before the Maturity Date. All
payments shall be made to Lender at such place as Lender may, from time
to time, designate. All payments received hereunder shall be applied,
first to accrued interest; and second, to principal.
1.6 PREPAYMENT OF THE LOAN. Borrower may prepay the Principal and interest
outstanding under the Loan without penalty, bonus or charges.
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ARTICLE II
WARRANTS
2.1 ISSUANCE OF WARRANTS. Within five business days following the date the
Loan is advanced under subsection 1.1, Borrower shall issue Lender a
warrant to purchase one share of the Borrower's common stock for each
dollar of Principal Lender advanced Borrower under the Loan (the
"WARRANTS"). The Warrants shall be exercisable until 5:00 PM Pacific Time
on the third year anniversary of its issuance date. The Warrants for the
purchase of shares of Borrower's common stock shall be evidenced by one
or more warrant certificates substantially in the form of Schedule B
attached hereto, with an exercise price of $0.25 per share.
2.2 RESTRICTIVE LEGEND. The Note, the Warrants, and the shares of common
stock underlying the Warrants (collectively, the "SECURITIES") shall bear
such form of restrictive legends as may be necessary, as determined by
Borrower in Borrower's reasonable discretion, to comply with applicable
laws or regulations of any stock exchange or other applicable authority,
including but not limited to the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). THESE SECURITIES MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE ISSUER, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER
THE ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE ACT PROVIDED BY RULE 144
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE ACT OR ANY APPLICABLE STATE LAWS, AND THE
HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER AN OPINION
OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE
REASONABLY SATISFACTORY TO THE ISSUER. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER HEREOF WILL
NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION
WITH REGARD TO THIS SECURITY, EXCEPT AS PERMITTED BY THE ACT.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to induce Lender to
enter into this Agreement and to make the advances provided for herein,
Borrower represents and warrants to Lender as follows:
(a) Borrower is a duly organized, validly existing, and in good
standing under the laws of the State of Colorado with the power to
own its assets and to transact business in California, and in such
other states where its business is conducted.
(b) Borrower has the authority and power to execute and deliver any
document required hereunder and to perform any condition or
obligation imposed under the terms of such documents.
3.2 REPRESENTATIONS AND WARRANTIES OF LENDER. Lender hereby represents and
warrants to Borrower, as of the date hereof, the following:
(a) Lender has full power and capacity to enter into, execute and
perform this Agreement, which Agreement, once executed by Lender,
shall be the valid and binding obligation of such party,
enforceable against such party by any court of competent
jurisdiction in accordance with its terms;
(b) Lender is not bound by or subject to any contract, agreement, law,
court order or judgment, administrative ruling, regulation or any
other item which prohibits or restricts such party from entering
into and performing this Agreement in accordance with its terms,
or requiring the consent of any third party prior to the entry
into or performance of this Agreement in accordance with its terms
by such party;
(c) Lender acknowledges that it is acquiring the Securities for its
own account, and not with a view toward the subdivision, resale,
distribution, or fractionalization thereof; Lender has no
contract, undertaking, or arrangement with any person to sell,
transfer, or otherwise dispose of the Securities (or any portion
thereof hereby subscribed for), and has no present intention to
enter into any such contract, undertaking, agreement or
arrangement;
(d) the execution of this Agreement by Lender is not the result of any
form of General Solicitation or General Advertising (as used under
Rule 502(c) promulgated under the Securities Act of 1933, as
amended (the "ACT"));
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(e) Lender hereby acknowledges that: (A) the offering of the
Securities was made only through direct, personal communication
between Lender and Borrower; (B) Lender has had full access to
material concerning Borrower's planned business and operations,
which material was furnished or made available to Lender by
officers or representatives of Borrower, including Borrower's
filings with the U.S. Securities Exchange Commission (the "SEC")
available on the SEC web site at xxx.xxx.xxx; (C) Borrower has
given Lender the opportunity to ask any questions and obtain all
additional information desired in order to verify or supplement
the material so furnished; and (D) Lender understands and
acknowledges that purchasers of the Securities must be prepared to
bear the economic risk of such investment for an indefinite period
because of: (i) the heightened nature of the risks associated with
an investment in Borrower due to its status as a development stage
company; (ii) illiquidity of the Securities due to the fact that
(1) the Securities have not been registered under the Act or any
state securities act (nor passed upon by the SEC or any state
securities commission), and (2) the Securities may not be
registered or qualified by Lender under federal or state
securities laws solely in reliance upon an available exemption
from such registration or qualification, and hence such Securities
cannot be sold unless they are subsequently so registered or
qualified, or are otherwise subject to any applicable exemption
from such registration requirements; and (3) substantial
restrictions on transfer of the Securities, as may set forth by
legend on the face or reverse side of every certificate evidencing
the ownership of the Securities;
(f) Lender is an "Accredited Investor" as such term is defined in Rule
501 of Regulation D promulgated by the SEC under the Act and as
such term is defined under Canadian securities laws;
(g) Lender is not a "U.S. Person" as such term is defined in Rule 902
of Regulation S promulgated by the SEC ("REGULATION S");
(h) Lender understands that Borrower is the seller of the Securities
and that, for purposes of Regulation S, a "distributor" is any
underwriter, dealer or other person who participates, pursuant to
a contractual arrangement in the distribution of securities sold
in reliance on Regulation S and that an "affiliate" is any
partner, officer, director or any person directly or indirectly
controlling, controlled by or under common control with any
persons in question;
(i) Lender agrees that it will not, during the one-year distribution
compliance period for the Securities, act as a distributor, either
directly or through any affiliate, or sell, transfer, hypothecate
or otherwise convey the Securities other than to a non-U.S.
Person;
(j) Lender acknowledges and understands that in the event the
Securities are offered, sold or otherwise transferred by Lender to
a non-U.S. Person prior to the expiration of the applicable
distribution compliance period, the purchaser or transferee must
agree not to resell such securities except in accordance with the
provisions of Regulation S, pursuant to registration under the
Act, or pursuant to an available exemption from registration; and
must further agree not to engage in hedging transactions with
regard to such securities unless in compliance with the Act;
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(k) Lender shall not offer, sell or otherwise dispose of the
Securities in the United States or to a U.S. Person unless (A)
Borrower has consented to such offer, sale or disposition and such
offer, sale or disposition is made in accordance with an exemption
from the registration requirements under the Act and the
securities laws of all applicable states of the United States or
(B) such securities have been registered with the SEC; and
(l) Lender has been advised to consult with an attorney regarding
legal matters concerning the purchase and ownership of the
Securities, and with a tax advisor regarding the tax consequences
of purchasing such Securities.
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
4.1 EVENTS OF DEFAULT. Borrower shall be in default under this Agreement on
the occurrence of any of the following events or conditions and the
failure of Borrower to cure such events or conditions within 10 business
days following the receipt of a written notice from Lender describing
with particularity the event or condition giving rise to an event of
default:
(a) Failure to pay any principal or interest hereunder after the same
becomes due.
(b) Any representation or warranty made by Borrower in this Agreement
or in connection with any borrowing or request for an Advance
hereunder, or in any certificate, financial statement, or other
statement furnished by Borrower to Lender is untrue in any
material respect at the time when made.
(c) Filing by Borrower of a voluntary petition in bankruptcy seeking
reorganization, arrangement or readjustment of debts, or any other
relief under the Bankruptcy Code as amended or under any other
insolvency act or law, state or federal, now or hereafter
existing.
(d) Filing of an involuntary petition against Borrower in bankruptcy
seeking reorganization, arrangement or readjustment of debts, or
any other relief under the Bankruptcy Code as amended, or under
any other insolvency act or law, state or federal, now or
hereafter existing, and the continuance thereof for 60 days
undismissed, unbonded, or undischarged.
4.2 REMEDIES. Upon the occurrence of an event of default as defined above,
the Lender may declare the entire unpaid principal balance, together with
accrued interest thereon, to be immediately due and payable by providing
a written notice to Borrower specifying the nature of the default and its
intention to accelerate the repayment of the Loan. No failure or delay on
the part of the Lender in exercising any right, power, or privilege
hereunder will preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided herein are cumulative and not exclusive of any other rights or
remedies provided at law or in equity.
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ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 NOTICES. All notices, requests, demands and other communications to be
given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or transmission by fax if such
transmission is received during the normal business hours of the
addressee, or on the first business day after sending the same by
overnight courier service or by telegram, or on the third business day
after mailing the same by first class mail, or on the day of receipt if
sent by certified or registered mail, addressed as set forth below, or at
such other address as any party may hereafter indicate by notice
delivered as set forth in this Section 5.1:
If to the Borrower: Reclamation Consulting &
Applications, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx X
Xxx Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxx
President
With a copy (which shall
not constitute notice) to: August Law Group, P.C.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. August, Esquire
President
If to the Lender: __________________________
__________________________
Attn: ____________________
__________________________
With a copy (which shall
not constitute notice) to: __________________________
__________________________
Attn: ____________________
__________________________
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5.2 ENTIRE AGREEMENT. This Agreement constitutes the entire and final
agreement and understanding between the parties with respect to the
subject matter hereof and the transactions contemplated hereby, and
supersedes any and all prior oral or written agreements, statements,
representations, warranties or understandings between the parties, all of
which are merged herein and superseded hereby.
5.3 BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the
binding agreement of the parties hereto, enforceable against each of them
in accordance with its terms. This Agreement, the Note, and the Warrants
(the "LOAN DOCUMENTS") shall inure to the benefit of each of the parties
hereto, and their respective successors and permitted assigns; provided,
however, that the Loan Documents may not be assigned (whether by contract
or by operation of law) by Lender without the prior written consent of
Borrower, which consent may be given or withheld in the sole discretion
of Borrower, provided however, that any such permitted assignee of any of
the Loan Documents, executes an assignment agreement or such other
document as Borrower may reasonably request containing all the
representations, warranties and covenants contained in this Agreement and
certifying to Borrower that such permitted assignee is an "Accredited
Investor" as such term is defined in Rule 501 of Regulation D promulgated
by the SEC under the Act and as such term is defined under Canadian
securities laws and that such permitted assignee is not a "U.S. Person"
as such term is defined in Rule 902 of Regulation S.
5.4 WAIVER. No waiver of any provision of this Agreement shall be deemed to
be or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the
waiver.
5.5 HEADINGS. The headings provided herein are for convenience only and shall
have no force or effect upon the construction or interpretation of any
provision hereof.
5.6 COUNTERPARTS; FACSIMILES. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimiles
containing original signatures shall be deemed for all purposes to be
originally-signed copies of the documents which are the subject of such
facsimiles.
5.7 FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such other and
further documents and to perform such other and further acts as may be
reasonably necessary to carry out the purposes and provisions of this
Agreement.
5.8 GOVERNING LAW; VENUE. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California
applicable to the performance and enforcement of contracts made within
such state, without giving effect to the law of conflicts of laws applied
thereby. In the event that any dispute shall occur between the parties
arising out of or resulting from the construction, interpretation,
enforcement or any other aspect of this Agreement, the parties hereby
agree to accept the exclusive jurisdiction of the Courts of the State of
California sitting in and for the County of Orange. In the event either
party shall be forced to bring any legal action to protect or defend its
rights hereunder, then the prevailing party in such proceeding shall be
entitled to reimbursement from the non-prevailing party of all fees,
costs and other expenses (including, without limitation, the reasonable
expenses of its attorneys) in bringing or defending against such action.
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5.9 SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite,
invalid or otherwise unenforceable, in whole or in part, by any court of
competent jurisdiction, then the remaining provisions of this Agreement
and any partially unenforceable provisions to the extent enforceable in
the pertinent jurisdiction, shall continue in full force and effect and
shall be binding and enforceable on the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
RECLAMATION CONSULTING
AND APPLICATIONS, INC.
By: _________________________
Xxxxxxx X. Xxxxxx
Chief Executive Officer
_____________________________
_____________________________
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SCHEDULE A
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to Note Purchase Agreement
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE ISSUER, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER
THE ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE ACT OR ANY APPLICABLE STATE LAWS, AND THE HOLDER
HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER AN OPINION OF COUNSEL OR OTHER
EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE ISSUER.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER HEREOF WILL NOT, DIRECTLY
OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY,
EXCEPT AS PERMITTED BY THE ACT.
PROMISSORY NOTE
U.S. $[_______] JUNE __, 2007
This Promissory Note is being issued pursuant to a Note Purchase Agreement dated
as of June __, 2007 between [LENDER'S NAME] and Reclamation Consulting and
Applications, Inc. (the "AGREEMENT")
FOR VALUE RECEIVED, Reclamation Consulting and Applications, Inc. (the
"BORROWER"), of 000 Xxxxx Xxxxxxxx, Xxxxx X, Xxx Xxxxxxxx, XX 00000, PROMISES TO
PAY on June __, 2008, or on demand in accordance with the terms of the
Agreement, to the order of [LENDER'S NAME] (the "LENDER"), [ADDRESS], the sum of
U.S. $[________] (the "PRINCIPAL") with simple interest at the rate of 12% per
annum, calculated and accrued monthly in arrears, both before and after the time
payment is due and until actual payment, and payable in accordance with the
Agreement.
The Borrower may prepay the Principal and interest outstanding under the
Agreement without penalty, bonus or charges.
Reclamation Consulting and Applications, Inc.,
a Colorado corporation
----------------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Chief Executive Officer
SCHEDULE B
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to Note Purchase Agreement
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WARRANT CERTIFICATE
No. ________ _______________ Warrants
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE ISSUER, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER
THE ACT, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE ACT OR ANY APPLICABLE STATE LAWS, AND THE HOLDER
HAS, PRIOR TO SUCH SALE, FURNISHED TO THE ISSUER AN OPINION OF COUNSEL OR OTHER
EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE ISSUER.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER HEREOF WILL NOT, DIRECTLY
OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY,
EXCEPT AS PERMITTED BY THE ACT.
WARRANTS FOR THE
PURCHASE OF COMMON STOCK
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ____________________________, (the
"HOLDER"), is the owner of warrants (the "WARRANTS") for the purchase of up to
an aggregate of ___________________________ shares of validly-issued, fully-paid
and non-assessable common stock of RECLAMATION CONSULTING AND APPLICATIONS,
INC., a corporation organized and existing under the laws of the State of
Colorado (the "CORPORATION"). Such purchase may be made at any time, and from
time to time, prior to 5:00 p.m. Pacific Time on the Expiration Date (as
hereinafter defined) upon the presentation and surrender of this Warrant
Certificate with a written notice in the form of Attachment 1, attached hereto,
signed by the Holder stating the number of shares of Common Stock with respect
to which such exercise is being made, at the principal corporate address of the
Corporation, accompanied by payment of the Exercise Price (as hereinafter
defined) for each Warrant exercised (the "PURCHASE PRICE") in lawful money of
the United States of America in cash or by official bank or certified check made
payable to RECLAMATION CONSULTING AND APPLICATIONS, INC. The Purchase Price and
the number of shares of Common Stock subject to purchase upon the exercise of
the Warrants are subject to modification or adjustment as set forth herein. The
Warrants represented by this Warrant Certificate have been issued by the
Corporation in connection with the Note Purchase Agreement, dated ______ __,
2007, by and between the Corporation and the Holder.
SECTION 1. DEFINITIONS. As used herein, the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "ADJUSTED PURCHASE PRICE" shall have the meaning given to
it in Section 5 of this Certificate.
(b) "CHANGE OF SHARES" shall have the meaning given to it in
Section 5 of this Certificate.
(c) "CORPORATE OFFICE" shall mean the office of the Corporation
at which, at any particular time, its principal business
shall be administered, which office is currently located at
000 Xxxxx Xxxxxxxx, Xxxxx X, Xxx Xxxxxxxx, XX 00000.
(d) "EXERCISE DATE" shall mean, as to any Warrant, the date on
which the Corporation shall have received both (i) this
Warrant Certificate, together with a written notice of
exercise in accordance herewith, duly executed by the
Holder hereof, or his attorney duly authorized in writing,
and indicating that the Holder is thereby exercising such
Warrant(s), and (ii) payment by wire transfer, or by
official bank or certified check made payable to the
Corporation, of an amount in lawful money of the United
States of America equal to the applicable Purchase Price
for such Warrant(s).
(e) "EXERCISE PERIOD" shall mean the period commencing on
[DATE], and shall expire at 5:00 P.M. (Pacific Time), on
[DATE PRIOR TO THIRD YEAR ANNIVERSARY].
(f) "EXERCISE PRICE" shall mean, as to any Warrant, the price
at which a Warrant may be exercised for the purchase of
Warrant Shares, which shall be $0.25.
(g) "EXPIRATION DATE" shall mean 5:00 P.M. (Pacific Time) on
last day of the Exercise Period. If such date shall be a
holiday or a day on which banks are authorized to be closed
in the State of California, then the Expiration Date shall
mean 5:00 P.M. (Pacific Time) of the next consecutive day
which does not fall on a holiday or a day on which banks
are authorized to be closed in the State of California.
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(h) "HOLDER" shall mean, as to any Warrant and as of any
particular date, the person in whose name the Warrant
Certificate representing such Warrant is registered as of
that date on the Warrant Register maintained by the
Corporation.
(i) "COMMON STOCK" shall mean the common stock of the
Corporation, which has the right to participate in the
distribution of earnings and assets of the Corporation
without limit as to amount or percentage.
(J) "PURCHASE PRICE" shall mean the purchase price to be paid
upon exercise of each Warrant hereunder in accordance with
the terms hereof, which price shall be the Exercise Price,
subject to adjustment from time to time pursuant to the
provisions of Section 5 hereof.
(k) "SECURITIES ACT" shall mean the Securities Act of 1933, and
any amendments or modifications, or successor legislation,
thereto adopted, and all regulations, rules or other laws
enacted or adopted pursuant thereto.
(l) "WARRANTS" shall mean the Warrants represented by this
Warrant Certificate.
(m) "WARRANT CERTIFICATE" shall mean any certificate
representing Warrants, and "THIS CERTIFICATE" shall mean
they warrant Certificate issued to the Holder
identification on the first page hereof.
(n) "WARRANT REGISTRY" means the official record maintained by
the Corporation in which are recorded, with respect to each
Warrant Certificate issued by the Corporation: the date of
issuance, the name and address of the original Holder, the
name and address of each subsequent transferee of such
original Holder, and the number identifying, such Warrant
Certificate.
(o) "WARRANT SHARES" shall have the meaning given to it in
Section 2 of this Certificate.
SECTION 2. EXERCISE OF WARRANTS.
(a) Each Warrant evidenced hereby may be exercised by the
Holder upon the terms and subject to the conditions set
forth herein prior to the sooner of 5:00 p.m. Pacific Time
on the Expiration Date (as hereinafter defined). A Warrant
shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date and the person
entitled to receive shares of restricted common stock of
the Corporation deliverable upon such exercise shall be
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treated for all purposes as the Holder of a Warrant Share
upon the exercise of the applicable Warrant as of the close
of business on the Exercise Date. Promptly following, and
in any event within ten (10) business days after, the date
on which the Corporation first receives clearance of all
funds received in payment of the Purchase Price pursuant to
this Warrant Certificate, the Corporation shall cause to be
issued and delivered to the person or persons entitled to
receive the same, a certificate or certificates evidencing
the issuance to such Holder of the applicable number of
Warrant Shares (plus a Warrant Certificate for any
remaining issued but unexercised Warrants of the Holder).
Notwithstanding the foregoing sentence, in the event that
any registration or qualification (or filing for exemption
from any such requirements) is required prior to the
issuance of such Warrant Shares by the Corporation in
accordance with Section 3(b) below, then the obligation to
deliver any such certificates shall arise only upon
completion of such requirements and at such time as the
Corporation may lawfully do so.
(b) Upon the exercise of the Warrants represented hereby, if
the Corporation so requests, the Holder shall certify to
the Corporation that it is not exercising such Warrants
with a view to distribute the Warrant Shares in violation
of the Securities Act, and shall provide such other
investor representations as the Corporation may require to
confirm the ability of the Corporation to rely upon the
exemption from registration under the Securities Act which
applies to the distribution of Warrant Shares at the time
of such distribution.
SECTION 3. ISSUANCE OF COMMON STOCK PURSUANT TO EXERCISE.
(a) The Corporation shall not be obligated to deliver any
Warrant Shares pursuant to the exercise of the Warrants
represented hereby unless and until a registration
statement under the Securities Act and/or under any
applicable state securities laws and regulations, with
respect to such securities is effective, or an exemption
from such registration is available to the Corporation at
the time of such exercise. However, in the event that this
Warrant Certificate represents Warrants which have been
transferred by an initial holder thereof, the Warrants
represented hereby may not be exercised by, nor shares of
Common Stock issued to, the Holder hereof in any state in
which such exercise and issuance would be unlawful.
(b) The Corporation shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed
with respect to the issuance of the Warrants, or the
issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if the
shares of Common Stock are to be delivered in a name other
than the name of the Holder hereof, then no such delivery
shall be made unless the person requesting the same has
paid to the Corporation the amount of transfer taxes or
charges incident thereto, if any.
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SECTION 4. LOSS OR MUTILATION. Upon receipt by the Corporation of evidence
satisfactory to it of the ownership of, and loss, theft,
destruction or mutilation of, this Warrant Certificate and (in
case of loss, theft or destruction) of indemnity satisfactory to
the Corporation, and (in the case of mutilation) upon surrender
and cancellation thereof, the Corporation shall execute and
deliver to the Holder in lieu thereof a new Warrant Certificate of
like tenor representing an equal aggregate number of Warrants as
was indicated to be outstanding on the prior lost or mutilated
Warrant Certificate (provided, however, that to the extent that
any discrepancy may exist between the number of Warrants purported
to be outstanding in respect of any Holder as evidenced by a
Warrant Certificate that has been lost or mutilated and the number
attributable to such Holder in the Warrant Registry, then the
Warrant Registry shall control for all purposes, absent a showing
of manifest error. Each Holder requesting a substitute Warrant
Certificate due to loss, theft or destruction shall, prior to
receiving such substitute certificate, provide an affidavit to the
Corporation in the form prescribed thereby and signed by (and
notarized on behalf of) such Holder. Applicants for a substitute
Warrant Certificate shall comply with such other reasonable
regulations and pay such other reasonable charges as the
Corporation may prescribe.
SECTION 5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF WARRANT SHARES OR
WARRANTS.
(a) Subject to the provisions of this Warrant Certificate and
applicable law, in the event the Corporation shall, at any
time or from time to time after the date hereof, issue any
shares of Common Stock as a stock dividend to the holders
of Common Stock, or subdivide or combine the outstanding
shares of Common Stock into a greater or lesser number of
shares (any such sale, issuance, subdivision or combination
being herein called a "CHANGE OF SHARES"), then, and
thereafter upon each further Change of Shares, the Purchase
Price in effect immediately prior to such Change of Shares
shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price,
the total number, class, and kind of shares as the Holder
would have owned had the Warrant been exercised prior to
the Change of Shares and had the Holder continued to hold
such shares until after the Change of Shares requiring
adjustment (the "ADJUSTED PURCHASE Price"). The form of
this Warrant need not be changed because of any adjustment
in the number of Warrant Shares subject to this Warrant. No
fractional shares shall be issued or called for as a result
of any adjustment made hereunder.
(b) The Corporation may elect, at its sole discretion, upon any
adjustment of the Purchase Price hereunder, to adjust the
number of Warrants outstanding, in lieu of adjustment of
the number of Warrant Shares purchasable upon the exercise
of each Warrant as hereinabove provided, so that each
Warrant outstanding after such adjustment shall represent
the right to purchase one Warrant Share. Upon each
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adjustment of the number of Warrants pursuant to this
Section 5(b), the Corporation shall, as promptly as
practicable, cause to be distributed to each Holder of
Warrant Certificates, on the date of such adjustment,
Warrant Certificates evidencing the adjusted number of
Warrants to which such Holder shall be entitled as a result
of such adjustment or, at the sole option of the
Corporation, cause to be distributed to such Holder in
substitution and replacement for the Warrant Certificates
held by him prior to the date of adjustment, and upon
surrender thereof, (if required by the Corporation) new
Warrant Certificates evidencing the aggregate number of
Warrants to which such Holder shall be entitled after such
adjustment.
(c) Irrespective of any adjustments or changes in the Purchase
Price or the number of Warrant Shares purchasable upon
exercise of the Warrants, all Warrant Certificates issued
(whether prior to or subsequent to any event causing an
adjustment thereof) shall continue to express the Purchase
Price per share, and the number of shares purchasable
thereunder as originally expressed in the Warrant
Certificate initially issued to any Holder.
(d) After each adjustment of the Purchase Price pursuant to
this Section 5, the Corporation will promptly prepare a
certificate signed by the Chairman or Chief Executive
Officer, and attested by the Secretary or an Assistant
Secretary, of the Corporation setting forth: (i) the
Purchase Price as so adjusted, (ii) the number of shares of
Common Stock purchasable upon exercise of each Warrant
after such adjustment or, if the Corporation shall have
elected to adjust the number of Warrants, the number of
Warrants to which the Holder of each Warrant shall then be
entitled, and (iii) a brief statement of the facts
accounting for such adjustment. The Corporation will
promptly cause a brief summary thereof to be sent by
ordinary first class mail to each Holder of Warrants at his
or her last address as it shall appear on the registry
books of the Corporation. No failure to mail such notice
nor any defect therein nor in the mailing thereof shall
affect the validity thereof. The affidavit of the Secretary
or an Assistant Secretary of the Corporation that such
notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(e) As used in this Section 5, references to "Common Stock"
shall mean and include all of the Corporation's Common
Stock authorized on the date hereof and shall also include
any capital stock of any class of the Corporation
thereafter authorized which shall not be limited to a fixed
sum or percentage in respect of the rights of the holders
thereof to participate in dividends and in the distribution
of assets upon the voluntary liquidation, dissolution or
winding up of the Corporation; provided, however, that
"Warrant Shares" shall include only shares of such class
designated in the Corporation's Certificate of
Incorporation as Common Stock on the date hereof or in the
case of any reclassification or change in the outstanding
shares of Common Stock issuable upon exercise of the
Warrants as a result of a subdivision or combination or
consisting of a change in par value, or from par value to
no par value, or from no par value to par value, such
shares of Common Stock as so reclassified or changed.
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(f) Any determination as to whether an adjustment in the
Purchase Price in effect hereunder is required pursuant to
this Section 5, or as to the amount of any such adjustment,
if required, shall be binding upon all holders of Warrants
and the Corporation if made in good faith by the Board of
Directors of the Corporation. For purposes of this Section
5(f), the Corporation's Board of Directors shall be deemed
to have acted in good faith if it makes any such decision
in reliance upon advice of its legal counsel and/or another
independent professional hired to advise the Board on such
matters.
SECTION 6. RESTRICTIVE LEGEND.
(a) Except as otherwise provided in this Section 6, each
Warrant Certificate and each certificate evidencing the
issuance of Warrant Shares (whether issued in the name of
the original Holder of this Certificate or of any
subsequent transferee thereof), shall be stamped or
otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THESE SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE ISSUER, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH REGULATION S UNDER THE ACT, (C) IN COMPLIANCE WITH THE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN
A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE
ACT OR ANY APPLICABLE STATE LAWS, AND THE HOLDER HAS, PRIOR
TO SUCH SALE, FURNISHED TO THE ISSUER AN OPINION OF COUNSEL
OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY
SATISFACTORY TO THE ISSUER. DELIVERY OF THIS CERTIFICATE
MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE HOLDER
HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY, EXCEPT AS
PERMITTED BY THE ACT. "
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(b) Each certificate evidencing the issuance of Warrant Shares
and each Warrant Certificate, Warrant Shares may also bear
such other restrictive legends as may be necessary to apply
with applicable law in the Corporation's reasonable
discretion. The legend requirements of Sections 6(a) above
shall terminate as to any particular Warrant or Warrant
Share: (i) when and so long as such security shall have
been effectively registered under the Securities Act and is
disposed of pursuant thereto; or (ii) when the Company
shall have received an opinion of counsel reasonably
satisfactory to it that such shares may be sold to the
public without registration thereof under the Securities
Act. Whenever the legend requirements imposed by this
Section 6 shall terminate as to any Warrant Share, as
hereinabove provided, the Holder hereof shall be entitled
to receive from the Corporation, at the Corporation's
expense, a new certificate representing such Warrant Shares
and not bearing the restrictive legend set forth in Section
6(a).
SECTION 7. RIGHTS OF ACTION. All rights of action with respect to the
Warrants are vested in the Holders of the Warrants, and any Holder
of a Warrant, without consent of the holder of any other Warrant,
may, in such Holder's own behalf and for his own benefit, enforce
against the Company his right to exercise his Warrants for the
purchase of Warrant Shares in the manner provided in this Warrant
Certificate.
SECTION 8. AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant, by his or
her acceptance thereof, consents and agrees with the Corporation
and every other holder of a Warrant that:
(a) The Warrant Registry shall be maintained by the
Corporation's Secretary, and shall be the official register
of all Warrants issued to any person in the Offering. The
Warrant Registry shall be dispositive as to the issuance,
ownership, transfer and other aspects of each Warrant
issued by the Corporation which are recorded therein and,
absent manifest error, such records shall control for all
purposes.
(b) The Warrants are transferable only on the Warrant Registry
by the Holder thereof in person or by his attorney duly
authorized in writing and only if the Warrant Certificates
representing such Warrants are surrendered at the Corporate
Office of the Corporation, duly endorsed or accompanied by
a proper instrument of transfer satisfactory to the
Corporation in its sole discretion, together with payment
of the amount of any applicable transfer taxes; and
8
(c) The Corporation may deem and treat the person in whose name
the Warrant Certificate is registered on the Warrant
Registry as the holder and as the absolute, true and lawful
owner of the Warrants represented thereby for all purposes,
and the Corporation shall not be affected by any notice or
knowledge to the contrary, except as otherwise expressly
provided in this Certificate.
SECTION 9. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified
mail, postage prepaid as follows: if to the Holder of a Warrant
Certificate, at the address of such Holder as shown on the Warrant
Registry maintained by the Corporation; and if to the Corporation,
addressed as set forth below, or at such other address as may be
designated by the Corporation from time to time in accordance with
this Section 9.
If to the Corporation: Reclamation Consulting &
Applications, Inc.
000 Xxxxx Xxxxxxxx, Xxxxx X
Xxx Xxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxx
President
With a copy (which shall
not constitute notice) to: August Law Group, P.C.
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. August, Esquire
President
SECTION 10. GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
California applicable to the performance and enforcement of
contracts made within such state, without giving effect to the law
of conflicts of laws applied thereby. In the event that any
dispute shall occur between the parties arising out of or
resulting from the construction, interpretation, enforcement or
any other aspect of this Agreement, the parties hereby agree to
accept the exclusive jurisdiction of the Courts of the State of
California sitting in and for the County of Orange.
SECTION 11. ENTIRE UNDERSTANDING. This Certificate contains the entire
understanding among the Corporation and the Holder relating to the
subject matter covered herein, and merges all prior discussions,
negotiations and agreements, if any between them. Neither of the
parties to this agreement shall be bound by any representations,
warranties, covenants, or other understandings relating to such
subject matter, other than as expressly provided for or referred
to herein.
9
IN WITNESS WHEREOF, the Corporation has caused this Warrant Certificate
to be duly executed, manually or in facsimile, by two of its officers thereunto
duly authorized, as of the date set forth below.
Date: June __, 2007
RECLAMATION CONSULTING AND APPLICATIONS, INC.
A Colorado corporation
------------------------------------
By: Xxxxxxx X. Xxxxxx
Its: Chief Executive Officer
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ATTACHMENT 1
------------
TO WARRANTS FOR THE
PURCHASE OF COMMON STOCK
NOTICE OF EXERCISE
TO: RECLAMATION CONSULTING AND APPLICATIONS, INC. (the "Company")
1. The undersigned hereby elects to purchase ____________ shares of Company
common stock, pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price in full, together with all applicable
transfer taxes, if any.
2. The undersigned hereby certifies that it is not a U.S. Person (as defined by
Rule 902 of the Securities Act of 1933, as amended) and that the warrant is not
being exercised for the account or benefit of or on behalf of a U.S. Person.
3. Please issue a certificate or certificates representing said shares of
Company common stock in the name of the undersigned or in such other name as is
specified below:
----------------------------------
(Name)
----------------------------------
(Address)
--------------------------------- ----------------------------------------
(Date) (Name of Warrant Holder)
By:
------------------------------------
Title:
---------------------------------
(Name of purchaser, and title and
signature of authorized person)
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