EXHIBIT 4.5
AMENDMENT NO. 1 TO
SECURED CONVERTIBLE DEBENTURE
DATED MAY 30, 2007
This Amendment No. 1 to Secured Convertible Debenture (this "AMENDMENT") is made
and entered into as of the 12th day of December 2007 (Amendment Effective Date")
by and among Reclamation Consulting and Applications, Inc. ("BORROWER"), and
___________________________ (the "LENDER"). The Borrower and the Lender are
sometimes referred to herein individually as a "PARTY" and collectively as the
"PARTIES." Capitalized terms used but not defined herein have the meanings
assigned to them in the Convertible Debenture Agreement dated as of May 30, 2007
and entered into by the Parties (the "AGREEMENT").
WHEREAS, on May 30, 2007, the Parties entered into the Agreement;
WHEREAS, Pala Investments Holding Limited ("PALA") desires to invest up
to Five Million Dollars ($5,000,000) in the Borrower (the "PALA FINANCING")
subject to Pala receiving a first security interest in the Company's assets and
the subordination of the interests held by all secured creditors;
WHEREAS, the execution of a Subordination Agreement in a form approved
by Pala and the Borrower (the "SUBORDINATION AGREEMENT") is a condition
precedent to the closing of the Financing;
THEREFORE, in consideration of the Borrower providing the Lender with
the Additional Warrants (as defined below), the Parties agree as follows:
I. AMENDMENTS TO THE AGREEMENT
A. In consideration of the Lender's execution of the Subordination
Agreement, the Borrower agrees to issue to the Borrower, within five (5)
business days following the closing of the Pala Financing, a warrant to purchase
one hundred sixty-six thousand, six hundred sixty-six (166,666) shares of
Borrower's common stock (the "ADDITIONAL WARRANTS"). The Additional Warrants).
The Additional Warrants shall be evidenced by one or more warrant certificates
substantially in the form of Schedule B-3, attached hereto, and shall have an
exercise price of $0.18 per share and shall be exercisable until the sooner of
(i) 5:00 PM Pacific Time on the third year anniversary of the Amendment
Effective Date or (ii) 5:00 PM Pacific Time on the Call Date (as defined in the
certificate evidencing the Additional Warrants). The issuance of the Additional
Warrants is contingent on the Lender's execution of the Subordination Agreement
and the closing of the Pala Financing, and such warrants will be issued to the
Borrower within five (5) business days following such closing.
II. GENERAL PROVISIONS
A. Except as expressly amended by this Amendment, the Parties agree
that all other provisions of the Agreement remain unchanged and that the
Agreement remain in full force and effect.
B. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the date first written hereinabove.
THE COMPANY:
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RECLAMATION CONSULTING AND APPLICATIONS, INC.
By:___________________________________
Michael C. Davies
Chief Executive Officer
THE LENDER:
______________________________
By:___________________________________
___________________________________
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SCHEDULE B-1
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to Secured Convertible Debenture
WARRANT CERTIFICATE
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No. _____________ 166,667 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 166,667 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,
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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 Amendment 1 to the Secured Convertible Debenture dated May 30,
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) "CALL NOTICE" shall have the meaning given to it in Section 9
of this Certificate.
(c) "CALL PRICE" shall have the meaning given to it in Section 9
of this Certificate.
(d) "CHANGE OF SHARES" shall have the meaning given to it in
Section 5 of this Certificate.
(e) "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.
(f) "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).
(g) "EXERCISE PERIOD" shall mean the period commencing on December
12, 2007 and shall expire at 5:00 P.M. (Pacific Time), on
December 11, 2010.
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(h) "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 $0.18.
(i) "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.
(j) "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.
(k) "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.
(L) "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.
(m) "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.
(n) "WARRANTS" shall mean the Warrants represented by this Warrant
Certificate.
(o) "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.
(p) "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.
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(q) "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 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.
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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
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 and the Call
Price in effect immediately prior to such Change of Shares
shall be reduced or increased to a price (the "ADJUSTED
PURCHASE PRICE") determined by multiplying the Purchase Price
in effect immediately prior to such Change of Shares by a
fraction, the numerator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior
to the issuance of such additional shares plus the number of
shares of Common Stock which the aggregate consideration
received by the Corporation would purchase at such Purchase
Price, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately after
the issuance of such additional shares. Such adjustment to the
Purchase Price shall be made successively whenever an issuance
is made after a Change of Shares has occurred.
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Upon each adjustment of the Purchase Price pursuant to this
Section 5(a), the total number of shares of Common Stock
purchasable upon the exercise of each Warrant shall become
(subject to the provisions contained in Section 5(b) hereof)
such number of shares (calculated to the nearest tenth)
purchasable at the Purchase Price in effect immediately prior
to such adjustment multiplied by a fraction, the numerator of
which shall be the Purchase Price in effect immediately prior
to such adjustment and the denominator of which shall be the
applicable Adjusted Purchase Price (rounded to the nearest
whole number of shares). 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. Each Warrant held of record prior
to such adjustment of the number of Warrants shall become that
number of Warrants (calculated to the nearest tenth)
determined by multiplying the number one by a fraction, the
numerator of which shall be the Purchase Price in effect
immediately prior to such adjustment and the denominator of
which shall be the Adjusted Purchase Price. Upon each
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) In case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock, or in case
of any consolidation or merger of the Corporation with or into
another corporation (other than a consolidation or merger in
which the Corporation is the continuing corporation and which
does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock), or in case of any sale or conveyance to another
corporation of all, or substantially all, of the property of
the Corporation (other than a sale/leaseback, mortgage or
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other financing transaction), the Corporation shall cause
effective provision to be made so that each holder of a
Warrant then outstanding shall have the right thereafter, by
exercising such Warrant, to purchase the kind and number of
shares of stock or other securities or property (including
cash) receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or
conveyance by a holder of the number of Warrant Shares that
might have been purchased upon exercise of such Warrant
immediately prior to such reclassification, capital
reorganization or other change, consolidation, merger, sale or
conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 5
upon a Change of Shares. The Corporation shall not effect any
such consolidation, merger or sale without the written consent
of Holders of a majority of the Warrants then outstanding,
unless prior to or simultaneously with the consummation
thereof the successor (if other than the Corporation)
resulting from such consolidation or merger or the corporation
purchasing assets or other appropriate corporation or entity
shall assume, by written instrument executed and delivered to
the Corporation, the obligation to deliver to the holder of
each Warrant such substitute warrants, shares of stock,
securities or assets as, in accordance with the foregoing
provisions, such Holders may be entitled to purchase, and the
other obligations of the Corporation set out in this
Certificate. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations and
other changes of outstanding shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(d) 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.
(e) 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
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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.
(f) 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 (i) in the case of any reclassification,
change, consolidation, merger, sale or conveyance of the
character referred to in Section 5(c) hereof, the stock,
securities or property provided for in such section, or (ii)
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.
(g) 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(g), 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.
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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
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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
(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.
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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 Certificate may only be modified, supplemented
or altered by the Corporation, and only with the consent in writing of
the Holders of Warrants representing greater than fifty percent (50%)
of the total Warrants then outstanding as may have been issued by the
Corporation pursuant to the conversion of outstanding balances under
Secured Convertible Debentures executed in May 2007; provided, that no
change in the number or nature of the securities purchasable upon the
exercise of any Warrant, or the acceleration of the Exercise Date,
shall be made without the consent in writing of the Holder of the
Warrant Certificate representing such Warrant, other than such changes
as are specifically prescribed by this Certificate as originally
executed or are made in compliance with applicable law.
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.
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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: December 12, 2007
RECLAMATION CONSULTING AND APPLICATIONS, INC.
A Colorado corporation
____________________________________
By: Michael C. Davies
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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