Exhibit 4.4
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.
CONVERTIBLE DEBENTURE
THIS CONVERTIBLE DEBENTURE (the "Agreement"), dated as of _____________, 2007
(the "Effective Date") is made
BETWEEN:
NAME: [__________________________]
ADDRESS:[__________________________]
[__________________________]
[__________________________]
(the "Lender");
AND:
RECLAMATION CONSULTING AND APPLICATIONS, INC., a company organized
under the laws of the State of Colorado, of 940 Calle Amanecer, Suite
E, San Clemente, CA 92673 (the "Borrower").
WHEREAS, on or about October, 2007, the Lender and the Borrower entered into an
agreement pursuant to which the Lender lent to the Borrower [ ] U.S. DOLLARS
(the "Principal"); and
WHEREAS, the Lender and the Borrower desire to memorialize the terms of the oral
agreement in writing by executing this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the mutual covenants and agreements hereinafter set forth, the parties hereto
agree as follows:
1. DEFINITIONS
Where used in this Agreement, the following words and phrases shall have the
following meaning:
1.1 "Accredited Investor" has the meaning assigned in subsection
5.2.6;
1.2 "Act" as the meaning assigned in subsection 5.2.4;
1.3 "Agreement" means this Convertible Debenture and the schedules
hereto, as at any time amended or modified and in effect;
1.4 "Conversion Amount" has the meaning assigned in subsection
4.1;
1.5 "Conversion Date" has the meaning assigned in subsection 4.1;
1.6 "Conversion Notice" has the meaning assigned in subsection
4.1;
1.7 "Conversion Price" means $[0.15] per share, provided that if
Borrower, at any time while the Principal is outstanding, (i)
pays a stock dividend on its common stock, (ii) subdivides
outstanding shares of common stock into a larger number of
shares, or (iii) combines outstanding shares of common stock
into a smaller number of shares, then in each such case the
Conversion Price shall be adjusted to be equal to $[0.15]
multiplied by a fraction of which the numerator shall be the
number of shares of common stock outstanding immediately
before such event and of which the denominator shall be the
number of shares of common stock outstanding immediately after
such event ;
1.8 "Conversion Shares" means shares of Borrower's common stock to
be received by Lender pursuant to a conversion under Section 4
of the outstanding balance of Principal due under this
Agreement;
1.9 "Event of Default" means any event specified in subsection
7.1;
1.10 "Loan" means the loan by the Lender to the Borrower
established pursuant to subsection 3.1;
1.11 "Maturity Date" means two (2) years from the Effective Date;
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1.12 "Note" means a promissory note to be made by the Borrower to
the Lender as evidence of the Loan which shall substantially
be in the form set out in Schedule A and "Notes" means the
plural thereof;
1.13 "Principal" means the principal amount of the loan set forth
in the Preamble;
1.14 "Public Record" means the public filings of the Company with
the U.S. Securities and Exchange Commission;
1.15 "SEC" has the meaning assigned in subsection 5.2.5
1.16 "Securities" has the meaning assigned in subsection 4.3;
1.17 "U.S. Person" has the meaning assigned in subsection 5.2.7;
and
1.18 "Warrants" has the meaning assigned in subsection 4.7.
2. INTERPRETATION
2.1 GOVERNING LAW AND 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.
2.2 SEVERABILITY
If any one or more of the provisions contained in this Agreement is found to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any way
be affected or impaired thereby.
2.3 PARTIES IN INTEREST
This Agreement enures to the benefit of and is binding on the parties hereto and
their respective successors and permitted assigns.
2.4 HEADINGS AND MARGINAL REFERENCES
The division of this Agreement into sections, subsections, paragraphs and
subparagraphs and the insertion of headings are for convenience of reference
only and do not affect the construction or interpretation of this Agreement.
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2.5 CURRENCY
All statements of, or references to, dollar amounts in this Agreement means
lawful currency of the United States.
3. THE LOAN
3.1 ESTABLISHMENT OF THE LOAN
The Lender agrees, on the terms and conditions set forth in this Agreement, to
lend to the Borrower the Principal as the "Loan."
3.2 EVIDENCE OF INDEBTEDNESS
Indebtedness of the Borrower to the Lender in respect of the Loan will be
evidenced by one or more Notes, which will be provided by the Borrower to the
Lender upon the Lender's execution of this Agreement.
3.3 INTEREST
The Borrower will pay simple interest to the Lender on the unpaid Principal from
the Effective Date at a rate of 12% per annum until the Loan is repaid in full.
Interest will be calculated and accrued monthly in arrears and will be payable
to the Lender monthly, within 15 days following the end of each calendar month
until the earlier of (i) the Maturity Date, (ii) the date the Loan is repaid in
full, or (iii) the Principal is converted to Borrower's common stock pursuant to
section 4. On a conversion of the principal to common stock pursuant to section
6, all accrued unpaid interest will be paid by Borrower within 15 days following
the date of any such conversion.
3.4 REPAYMENT OF THE LOAN
Subject to conversion pursuant to section 4, the Borrower will repay the
Principal and any accrued but unpaid interest to the Borrower on or before the
Maturity Date.
3.5 PREPAYMENT OF LOAN
The Borrower may prepay the Principal and interest outstanding under the Loan
without penalty, bonus or charges.
4. CONVERSION OF THE LOAN
4.1 CONVERSION
At any time, and from time to time, prior to the Maturity Date, the Lender may
elect, by providing to Borrower a written notice in the form of Schedule C,
attached hereto (the "Conversion Notice"), to convert all or any portion of the
then-outstanding Principal (the amount thereof being the "Conversion Amount") as
of the date of such Conversion Notice (the "Conversion Date").
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4.2 ISSUANCE OF CONVERSION SHARES
Within 15 days of receipt of a properly completed Conversion Notice, the
Borrower will issue Conversion Shares to the Lender in an amount equal to a
fraction, the numerator of which is the Conversion Amount to be converted and
the denominator of which is the Conversion Price. All Conversion Shares so
issued shall be deemed to have been issued as fully paid and non-assessable at a
price equal to the Conversion Price.
4.3 LEGEND
This Agreement, and any Conversion Shares, Warrants and shares received on the
exercise of 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.
4.4 CONVERSION DISCHARGES THE BORROWER
Conversion of Principal in accordance herewith shall operate to discharge the
Borrower's obligations with respect to repayment of the Principal amount so
converted, provided that delivery of the appropriate number of Conversion Shares
issued upon such conversion is made by the Borrower. The Borrower shall not be
bound to
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enquire into the title of the Lender, save as ordered by a court of competent
jurisdiction or as required by statute. The Borrower shall not be bound to see
to the execution of any trust affecting the ownership of the Note(s) surrendered
in connection with any conversion of Principal nor be charged with notice of any
equity that may be subsisting in respect thereof, unless the Borrower has actual
notice thereof.
4.5 NO REQUIREMENT TO ISSUE FRACTIONAL SECURITIES
The Borrower shall not be required to issue fractions of securities upon any
conversion of Principal pursuant to this section 4. If any fractional interest
in securities would be issuable upon the conversion of Principal, the Borrower
shall not be required to make any payment in lieu of delivering any certificates
representing such fractional interest.
4.6 CANCELLATION OF NOTES
Upon conversion of the Principal amount of the Loan in whole or in part pursuant
to the provisions of this section 4, each Note representing the Principal
converted shall be forthwith delivered to and cancelled by the Borrower.
4.7 WARRANTS
Upon the Lender's execution of this Agreement, the Borrower shall issue to the
Lender warrants for the purchase of an aggregate of [ ] shares of Borrower's
common stock (the "Warrants"), representing one (1) warrant for every One Dollar
($1.00) of Principal provided to Borrower pursuant to this Agreement. The
Warrants shall be exercisable until the sooner of (i) 5:00 PM Pacific Time three
(3) years from the Effective Date or (ii) 5:00 PM Pacific Time on the Call Date
(as defined in the certificates evidencing the Warrants. The Warrants shall be
evidenced by one or more warrant certificates substantially in the form of
Schedule B attached hereto, with an exercise price of $[0.22] per share on the
last completed trading day immediately preceding the Effective Date.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Borrower represents and warrants to the Lender as of the
date hereof that:
5.1.1 the Borrower and its subsidiaries are valid and
subsisting corporations duly incorporated and in good
standing under the laws of the jurisdictions in which
they are incorporated, continued or amalgamated;
5.1.2 the Borrower has complied, or will comply, with all
applicable corporate and securities laws and
regulations in connection with the offer, sale and
issuance of the Securities, and in connection
therewith has not engaged in any "direct selling
efforts," as such term is defined in Regulation S, or
any "general solicitation or general advertising" as
described in Regulation D;
5.1.3 the Borrower and its subsidiaries are the beneficial
owners of the properties, business and assets or the
interests in the properties, business or assets
referred to in its Public Record and except as
disclosed therein, all agreements by which the
Borrower or its subsidiaries holds an interest in a
property, business or asset are in good standing
according to their
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terms, and the properties are in good standing under
the applicable laws of the jurisdictions in which
they are situated;
5.1.4 no offering memorandum has been or will be provided
to the Investor;
5.1.5 the financial statements comprised in the Public
Record accurately reflect the financial position of
the Borrower as at the date thereof;
5.1.6 the creation, issuance and sale of the Securities by
the Borrower does not and will not conflict with and
does not and will not result in a breach of any of
the terms, conditions or provisions of its Articles
of Incorporation, Bylaws or any agreement or
instrument to which the Borrower is a party;
5.1.7 the Securities will, at the time of issue, be duly
allotted, validly issued, fully paid and
non-assessable and will be free of all liens, charges
and encumbrances and the Borrower will reserve
sufficient shares in the treasury of the Borrower to
enable it to issue the Securities;
5.1.8 this Agreement when accepted has been duly authorized
by all necessary corporate action on the part of the
Borrower and, subject to acceptance by the Borrower,
constitutes a valid obligation of the Borrower
legally binding upon it and enforceable in accordance
with its terms;
5.1.9 except as set out in the Public Record, neither the
Borrower nor any of its subsidiaries is a party to
any actions, suits or proceedings which could
materially affect its business or financial
condition, and to the best of the Borrower's
knowledge no such actions, suits or proceedings have
been threatened as at the date hereof, except as
disclosed in the Public Record;
5.1.10 no order ceasing or suspending trading in the
securities of the Borrower nor prohibiting sale of
such securities has been issued to the Borrower or
its directors, officers or promoters and to the best
of the Borrower's knowledge no investigations or
proceedings for such purposes are pending or
threatened; and
5.1.11 except as set out in the Public Record or herein, no
person has any right, agreement or option, present or
future, contingent or absolute, or any right capable
of becoming a right, agreement or option for the
issue or allotment of any unissued common shares of
the Borrower or any other security convertible or
exchangeable for any such shares or to require the
Borrower to purchase, redeem or otherwise acquire any
of the issued or outstanding shares of the Borrower.
5.1.12 no Event of Default and no event which, with the
giving of notice or lapse of time would become an
Event of Default, has occurred or is continuing.
5.2 The Lender hereby represents and warrants to the Borrower, as
of the date hereof, the following:
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5.2.1 the Lender has full power and capacity to enter into,
execute and perform this Agreement, which Agreement,
once executed by the 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;
5.2.2 the 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;
5.2.3 the Lender acknowledges that it is acquiring the
Securities its own account, and not with a view
toward the subdivision, resale, distribution, or
fractionalization thereof; the 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;
5.2.4 the execution of this Agreement by the 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"));
5.2.5 the Lender hereby acknowledges that: (A) the offering
of the Securities was made only through direct,
personal communication between the Lender and the
Borrower; (B) the Lender has had full access to
material concerning the Borrower's planned business
and operations, which material was furnished or made
available to the Lender by officers or
representatives of the Borrower, including the
Borrower's filings with the U.S. Securities and
Exchange Commission ("SEC") available on the SEC web
site at www.sec.gov; (C) the Borrower has given the
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) the 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
the 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 the Lender under federal
or state securities laws solely in reliance upon an
available exemption from such registration or
qualification, and hence
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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;
5.2.6 the Lender is an "Accredited Investor" as such term
is defined in Rule 501 of Regulation D promulgated by
the SEC under the Act;
5.2.7 the Lender is not a "U.S. Person" as such term is
defined in Rule 902 of Regulation S promulgated by
the SEC. ("Regulation S");
5.2.8 the Lender understands that the 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;
5.2.9 the 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;
5.2.10 the Lender acknowledges and understands that in the
event the Securities are offered, sold or otherwise
transferred by the 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;
5.2.11 the Lender shall not offer, sell or otherwise dispose
of the Securities in the United States or to a U.S.
Person unless (A) the 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
5.2.12 the Lender has been advised to consult with an
attorney regarding legal matters concerning the
purchase and ownership of the Conversion Shares, and
with a tax advisor regarding the tax consequences of
purchasing such Conversion Shares.
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5.2.13 The Lender is an Accredited Investor under applicable
Canadian law by reason of fitting within a category
listed on Schedule D, attached hereto and
incorporated herein .
6. COVENANTS OF THE BORROWER
6.1 POSITIVE COVENANTS
The Borrower covenants and agrees with the Lender that, at all times during the
currency of this Agreement, it will:
6.1.1 pay the principal sum, interest and all other monies
required to be paid to the Lender pursuant to this
Agreement in the manner set forth herein;
6.1.2 duly observe and perform each and every of its
covenants and agreements set forth in this Agreement;
and
6.1.3 provide the Lender with immediate notice of any Event
of Default.
6.1.4 offer, sell, issue and deliver the Securities
pursuant to exemptions from the prospectus filing,
registration or qualification requirements of
applicable securities laws and otherwise fulfill all
legal requirements required to be fulfilled by the
Borrower (including without limitation, compliance
with all applicable securities laws of Canadian
jurisdictions) in which securities are sold in
connection with the offering of Securities;
7. EVENT OF DEFAULT
7.1 DEFINITION OF EVENT OF DEFAULT
The principal balance of the Loan, costs and any other money owing to the Lender
under this Agreement will immediately become payable upon written demand by the
Lender in any of the following events, unless otherwise waived in writing by the
Lender:
7.1.1 if the Borrower defaults in any payment when due under this
Agreement;
7.1.2 if the Borrower becomes insolvent or makes a general
assignment for the benefit of its creditors, or if any order
is made or an effective resolution is passed for the
winding-up of the Borrower or if the Borrower is declared
bankrupt or if a custodian or receiver is appointed for the
Borrower under the applicable bankruptcy or insolvency
legislation, or if a compromise or arrangement is proposed by
the Borrower to its creditors or any class of its creditors,
or if a receiver or other officer with like powers is
appointed for the Borrower; or
7.1.3 if the Borrower defaults in observing or performing any other
covenant or agreement of this Agreement on its part to be
observed or performed and
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such default has continued for a period of 14 days after notice in writing has
been given by the Lender to the Borrower specifying the default.
7.2 RIGHTS AND REMEDIES OF THE LENDER
Upon the occurrence of an Event of Default and at any time thereafter:
7.2.1 the Lender may exercise any or all rights and
remedies available to the Lender whether available
under this Agreement or available at law or in
equity, provided always that the Lender acts in a
commercially reasonable manner in exercising such
rights; and
7.2.2 the Lender will have the right, but not the
obligation, to inform any creditor of the Borrower of
any Event of Default by the Borrower.
8. GENERAL
8.1 WAIVER OR MODIFICATION
No failure on the part of the Lender in exercising any power or right hereunder
will operate as a waiver of the power or right nor will any single or partial
exercise of such right or power preclude exercise of any other right or power
hereunder. No amendment, modification or waiver of any condition of this
Agreement or consent to any departure by the Borrower therefrom will be
effective unless it is in writing signed by the Lender. No notice to or demand
on the Borrower will entitle the Borrower to any other further notice or demand
in similar or other circumstances unless specifically provided for in this
Agreement.
8.2 TIME
Time is of the essence of this Agreement.
8.3 FURTHER ASSURANCES
The parties to this Agreement will do, execute and deliver or will cause to be
done, executed and delivered all such further acts, documents and things as may
be reasonably required for the purpose of giving effect to this Agreement.
8.4 ASSIGNMENT
The Borrower may not assign this Agreement or its interest herein or any part
hereof except with the prior written consent of the Lender. The Lender may
assign the Loan or this Agreement, or its interest in the Loan or this Agreement
or any part thereof upon ten days' written notice to the Borrower and provided
that the assignee agrees to be bound by the terms of this Agreement to the
extent of such assignment.
9. NOTICES
All notices, requests, demands and other communications to be given hereunder
shall be in writing
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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 10:
If to Borrower: Reclamation Consulting &
Applications, Inc.
940 Calle Amanecer, Suite E
San Clemente, CA 92673
Attn: Mr. Gordon W. Davies
President
With a copy (which shall
not constitute notice) to: August Law Group, P.C.
19200 Von Karman, Suite 900
Irvine, California 92614
Attn: Kenneth S. August, Esquire
President
If to Lender: [_____________________________]
[_____________________________]
[_____________________________]
[_____________________________]
10. AMENDMENTS
This Agreement may be amended, waived, discharged or terminated only with the
agreement of the party against whom enforcement of the amendment, waiver,
discharge or termination is sought and only in writing signed by both parties to
this agreement and is subject to the same governing law and venue as stated
herein in Section 2.1.
11. COUNTERPART AND FAX EXECUTION
This Agreement may be executed in two or more counterparts and by fax
transmission, each of which will be deemed to be an original and all of which
will constitute one agreement, effective as of the date given above.
SIGNATURES ON NEXT PAGE
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IN WITNESS WHEREOF, the parties hereto have executed this Convertible Debenture
as of the date first written above.
LENDER
[TYPE NAME]
___________________________________
BORROWER
RECLAMATION CONSULTING AND APPLICATIONS, INC.
A Colorado corporation
____________________________________
By: Gordon W. Davies
Its: President
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SCHEDULE A
to Convertible Debenture.
- --------------------------------------------------------------------------------
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
$[__________] [MONTH DAY] , 2007
This Promissory Note is being issued pursuant to a Convertible Debenture dated
for reference [MONTH, DAY], 2007 between [LENDER] and Reclamation Consulting and
Applications, Inc. (the "Convertible Debenture")
FOR VALUE RECEIVED, Reclamation Consulting and Applications, Inc. (the
"Borrower"), of 940 Calle Amanecer, Suite E, San Clemente, CA 92673, PROMISES TO
PAY on two years from effective date of convertible debenture, or on demand in
accordance with the terms of the Convertible Debenture, to the order of [LENDER]
(the "Lender"), [LENDER'S ADDRESS], the sum of $[ ] (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 Convertible Debenture.
The obligations of the Borrower to pay the Principal to the Lender will
terminate if and to the extent that the Principal is converted in accordance
with section 4 of the Convertible.
The Borrower waives presentment for payment, notice of protest and notice of
non-payment.
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The Borrower may prepay the Principal and interest outstanding under the
Convertible Debenture without penalty, bonus or charges.
Reclamation Consulting and Applications, Inc
a Colorado corporation
______________________________________
By: Gordon W. Davies
Its: President
15
SCHEDULE B
to Convertible Debenture
- --------------------------------------------------------------------------------
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, [LENDER], (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 the sooner of
5:00 p.m. Pacific Time on the Expiration Date (as hereinafter defined) or 5:00
p.m. on any Call 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
16
Certificate have been issued by the Corporation in connection with the
Convertible Debenture, dated [DATE], 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) "CALL NOTICE" shall have the meaning given to it in Section
9 of this Certificate.
(b) "CALL PRICE" shall have the meaning given to it in Section 9
of this Certificate.
(c) "CHANGE OF SHARES" shall have the meaning given to it in
Section 5 of this Certificate.
(d) "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
940 Calle Amanecer, Suite E, San Clemente, CA 92673.
(e) "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).
(f) "EXERCISE PERIOD" shall mean the period commencing on
[EFFECTIVE DATE OF CONVETIBLE DEBENTURE], and shall expire
at 5:00 P.M. (Pacific Time), on [DATE THREE YEARS FROM
EFFECTIVE DATE OF CONVERTIBLE DEBENTURE].
(g) "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 equal to $0.22 per share.
(h) "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.
(i) "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.
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(j) "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.
(k) "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.
(l) "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.
(m) "WARRANTS" shall mean the Warrants represented by this
Warrant Certificate.
(n) "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.
(o) "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.
(p) "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) or 5:00 p.m. on any
Call 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 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
18
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. RESERVATION OF SHARES; TAXES; ETC.
(a) The Corporation covenants that it will at all times reserve
and keep available out of its authorized Common Stock,
solely for the purpose of issue upon the valid exercise of
Warrants, such number of Warrant Shares as shall then be
issuable upon the exercise of all Warrants then outstanding.
The Corporation covenants that all shares of Common Stock
which shall be issuable upon exercise of the Warrants shall,
at the time of delivery, be duly and validly issued,
fully-paid, non-assessable and free from all taxes, liens
and charges with respect to the issuance thereof (other than
those which the Corporation shall promptly pay or discharge,
or any liens created thereon by the Holder thereof and/or
any predecessor of such Holder).
(b) 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. The Corporation covenants that if any Warrant
Shares reserved for the purpose of exercise of Warrants
hereunder require registration with, or approval of, any
governmental authority under any federal or state securities
law before such securities may be validly issued or
delivered upon such exercise, then the Corporation will in
good faith and as expeditiously as reasonably possible,
endeavor to secure such registration or approval. 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.
(c) 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
19
person requesting the same has paid to the Corporation the
amount of transfer taxes or charges incident thereto, if
any.
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 CALL PRICE.
(a) Subject to the provisions of this Warrant Certificate
and applicable law, in the event the Corporation, at
any time or from time to time after the date hereof
while the Warrants are outstanding, (i) pays a stock
dividend on its common stock, (ii) subdivides
outstanding shares of common stock into a larger number
of shares, or (iii) combines outstanding shares of
common stock into a smaller number of shares, then in
each such case the Purchase Price shall be adjusted to
be equal to $0.15 multiplied by a fraction of which the
numerator shall be the number of shares of common stock
outstanding immediately before such event and of which
the denominator shall be the number of shares of common
stock outstanding immediately after such event.
(b) Subject to the provisions of this Warrant Certificate
and applicable law, in the event the Corporation, at
any time or from time to time after the date hereof
while the Warrants are outstanding, (i) pays a stock
dividend on its common stock, (ii) subdivides
outstanding shares of common stock into a larger number
of shares, or (iii) combines outstanding shares of
common stock into a smaller number of shares, then in
each such case the Call Price shall be adjusted to be
equal to $0.80 multiplied by a fraction of which the
numerator shall be the number of shares of common stock
outstanding immediately before such event and of which
the denominator shall be the number of shares of common
stock outstanding immediately after such event.
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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. "
(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
21
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
(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. CALL RIGHT. Subject to the provisions of this Section 9, at
any time following the date on which the closing price of
the Corporation's common stock on the OTC Bulletin Board (or
on such other over-the-counter market or stock exchange on
which the Corporation's stock may then be traded) has
equaled or exceeded $0.80 per share (the" CALL PRICE") as
such price may be adjusted from time to time pursuant to
Section 5, the Company may call for cancellation of the
portion or all of this Warrant which the Holder has not
exercised prior to 5:00 p.m. Pacific Time on the Call Date
(as defined below). To exercise this right, the Corporation
must deliver to the Holder an irrevocable written notice (a
"CALL NOTICE"), indicating therein that this Warrant shall
be cancelled. This Warrant shall be cancelled at 5:00 p.m.
Pacific Time on the 45th day after the date the Call Notice
is sent to Holder.
SECTION 10. MODIFICATION OF WARRANTS. Other than with respect to any
adjustment made by the Corporation in accordance with the
provisions of Section 5 hereof, this
22
Certificate may only be modified, supplemented or altered by
the Corporation, and only with the consent in writing of the
Holder.
SECTION 11. 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 11.
If to the Corporation: Reclamation Consulting &
Applications, Inc.
940 Calle Amanecer, Suite E
San Clemente, CA 92673
Attn: Mr. Gordon W. Davies
President
With a copy (which shall
not constitute notice) to:August Law Group, P.C.
19200 Von Karman, Suite 900
Irvine, California 92614
Attn: Kenneth S. August, Esquire
President
SECTION 12. 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 13. 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.
SIGNATURES ON NEXT PAGE
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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: [____________]
RECLAMATION CONSULTING AND APPLICATIONS, INC.
A Colorado corporation
- ------------------------------------
By: Gordon W. Davies
Its: President
24
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)
25
SCHEDULE C
to Convertible Debenture
NOTICE OF CONVERSION
TO: RECLAMATION CONSULTING AND APPLICATIONS, INC. (the "Company")
1. The undersigned hereby elects to convert to Company common stock the
amount of outstanding Principal under the attached Convertible Debenture and the
attached Promissory Note(s), all pursuant to the terms of the Convertible
Debenture, in the amounts designated below:
Principal: $_____________
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 this conversion
is not being effected 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 Lender)
By:
---------------------------------------
Title:
------------------------------------
(Name of Lender, and title and
signature of authorized person)
26
SCHEDULE D
Canadian Accredited Investor Schedule
(DEFINED IN NATIONAL INSTRUMENT 45-106)
|_| (a) Canadian financial institution, or a Schedule III bank,
|_| (b) the Business Development Bank of Canada incorporated under the BUSINESS
DEVELOPMENT BANK OF CANADA ACT (Canada),
|_| (c) a subsidiary of any person referred to in paragraphs (a) or (b), if the
person owns all of the voting securities of the subsidiary, except the
voting securities required by law to be owned by directors of that
subsidiary,
|_| (d) a person registered under the securities legislation of a jurisdiction
of Canada as an adviser or dealer, other than a person registered solely as
a limited market dealer under one or both of the SECURITIES ACT (Ontario)
or the SECURITIES ACT (Newfoundland and Labrador),
|_| (e) an individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a person
referred to in paragraph (d),
|_| (f) the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada or a
jurisdiction of Canada,
|_| (g) a municipality, public board or commission in Canada and a metropolitan
community, school board, the Comite de gestion de la taxe scolaire de l'ile
de Montreal or an intermunicipal management board in Quebec;
|_| (h) any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of that
government,
|_| (i) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension commission
or similar regulatory authority of a jurisdiction of Canada,
|_| (j) an individual who, either alone or with a spouse, beneficially owns,
directly or indirectly, financial assets having an aggregate realizable
value that before taxes, but net of any related liabilities, exceeds
$1,000,000,
|_| (k) an individual whose net income before taxes exceeded $200,000 in each
of the 2 most recent calendar years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of the 2 most
recent calendar years and who, in either case, reasonably expects to exceed
that net income level in the current calendar year,
27
|_| (l) an individual who, either alone or with a spouse, has net assets of at
least $5,000,000,
|_| (m) a person, other than an individual or investment fund, that has net
assets of at least $5,000,000 as shown on its most recently prepared
financial statements,
|_| (n) an investment fund that distributes or has distributed its securities
only to
(i) a person that is or was an accredited investor at the time of
the distribution,
(ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [MINIMUM AMOUNT
INVESTMENT], and 2.19 [ADDITIONAL INVESTMENT IN INVESTMENT
FUNDS], or
(iii) a person described in paragraph (i) or (ii) that acquires
or acquired securities under section 2.18 [INVESTMENT FUND
REINVESTMENT],
|_| (o) an investment fund that distributes or has distributed securities under
a prospectus in a jurisdiction of Canada for which the regulator or, in
Quebec, the securities regulatory authority, has issued a receipt,
|_| (p) a trust company or trust corporation registered or authorized to carry
on business under the TRUST AND LOAN COMPANIES ACT (Canada) or under
comparable legislation in a jurisdiction of Canada or a foreign
jurisdiction, acting on behalf of a fully managed account managed by the
trust company or trust corporation, as the case may be,
|_| (q) a person acting on behalf of a fully managed account managed by that
person, if that person
(i) is registered or authorized to carry on business as an
adviser or the equivalent under the securities legislation of a
jurisdiction of Canada or a foreign jurisdiction, and
(ii) in Ontario, is purchasing a security that is not a security
of an investment fund;
|_| (r) a registered charity under the INCOME TAX ACT (Canada) that, in regard
to the trade, has obtained advice from an eligibility adviser or an adviser
registered under the securities legislation of the jurisdiction of the
registered charity to give advice on the securities being traded,
|_| (s) an entity organized in a foreign jurisdiction that is analogous to any
of the entities referred to in paragraphs (a) to (d) or paragraph (i) in
form and function.
|_| (t) a person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by law to be
owned by directors, are persons that are accredited investors,
|_| (u) an investment fund that is advised by a person registered as an adviser
or a person that is exempt from registration as an adviser, or
28
|_| (v) a person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Quebec, the regulator as
(i) an accredited investor, or
(ii) an exempt purchaser in Alberta or British Columbia after
this instrument comes into force
- ---------------------------
29