COMMON STOCK AND WARRANT PURCHASE AGREEMENT for the purchase of up to 3,191,490 Shares of Common Stock and Warrants to Purchase 1,595,745 Shares of Common Stock of METALLINE MINING COMPANY February 16, 2007
COMMON
STOCK AND WARRANT
PURCHASE
AGREEMENT
for
the purchase of up to
3,191,490
Shares of Common Stock
and
Warrants to Purchase 1,595,745 Shares of Common Stock
of
METALLINE
MINING COMPANY
February
16, 2007
TABLE
OF CONTENTS
ARTICLE
1
DEFINITIONS1
|
1.1
|
Certain
Definitions
|
2
|
|
1.2
|
Accounting
Principles
|
5
|
|
1.3
|
Other
Definitional Provisions; Construction
|
5
|
| ARTICLE 2 ISSUE AND SALE OF COMMON STOCK AND WARRANTS |
6
|
|
2.1
|
Authorization
and Issuance of the Common Stock and Warrants
|
6
|
|
2.2
|
Sale
and Purchase
|
6
|
|
2.3
|
The
Closing
|
6
|
| ARTICLE 3 CONDITIONS |
7
|
|
3.1
|
Conditions
to Purchase of Securities
|
7
|
| ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
7
|
|
4.1
|
Representations
and Warranties of the Company
|
7
|
|
4.2
|
Absolute
Reliance on the Representations and Warranties
|
12
|
| ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER |
12
|
|
5.1
|
Purchase
Entirely for Its Own Account
|
12
|
|
5.2
|
Disclosure
of Information
|
13
|
|
5.3
|
Investment
Experience
|
13
|
|
5.4
|
Restricted
Securities
|
14
|
|
5.5
|
Legends
|
14
|
|
5.6
|
Survival
of Purchaser Representations
|
14
|
| ARTICLE 6 COVENANTS |
14
|
|
6.1
|
Affirmative
Covenants by Company
|
14
|
| ARTICLE 7 MISCELLANEOUS |
14
|
|
7.1
|
Successors
and Assigns
|
15
|
|
7.2
|
Modifications
and Amendments
|
15
|
|
7.3
|
No
Implied Waivers; Cumulative Remedies; Writing Required
|
15
|
|
7.4
|
Fees
and Expenses
|
16
|
|
7.5
|
Notices
|
16
|
|
7.6
|
Survival
|
16
|
|
7.7
|
Governing
Law
|
16
|
|
7.8
|
Severability
|
17
|
|
7.9
|
Headingss
|
17
|
|
7.10
|
Counterparts
|
17
|
|
7.11
|
Ingegration
|
17
|
|
7.12
|
IngegrationIndependent
Nature of Purchaser Obligations and Rights
|
17
|
ii
COMMON
STOCK AND WARRANT
PURCHASE
AGREEMENT
For
the Purchase of up to 3,191,490 Shares of Common Stock and Warrants to Purchase
1,595,745
Shares of Common Stock
THIS
COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of
February __, 2007, is by and between Metalline Mining Company, a Nevada
corporation (the “Company”), and the persons or entities set forth on the
signature page hereto (each individually a “Purchaser” and collectively the
“Purchasers”). Capitalized terms used and not defined elsewhere in this
Agreement are defined in Article 1
hereof.
The
parties hereto, in consideration of the premises and their mutual covenants
and
agreements herein set forth and intending to be legally bound hereby, covenant
and agree as follows:
ARTICLE
1
DEFINITIONS
1.1 Certain
Definitions.
In
addition to other words and terms defined elsewhere in this Agreement, the
following words and terms have the meanings set forth below (and such meanings
shall be equally applicable to both the singular and plural form of the terms
defined, as the context may require):
“Affiliate”
shall
mean with respect to any Person, any other Person that is directly or indirectly
controlling, controlled by or under common control with such Person or entity
or
any of its Subsidiaries, and the term “control” (including the terms “controlled
by” and “under common control with”) shall mean having, directly or indirectly,
the power to direct or cause the direction of the management and policies of
a
Person, whether through ownership of voting securities or by contract or
otherwise. Without limiting the foregoing, the ownership of ten percent (10%)
or
more of the voting securities of a Person shall be deemed to constitute control
and notwithstanding anything to the contrary herein, neither the Purchaser
nor
any of their respective Affiliates shall be deemed to be Affiliates of the
Company by virtue of the transactions contemplated in this
Agreement.
“Agreement”
shall
mean this Common Stock and Warrant Purchase Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to
time.
“Business”
shall
mean the principal business of the Company as set forth in Section 4.1(b)
hereof
and as such shall continue to be conducted following the purchase and sale
of
the Securities.
“Business
Day”
shall
mean any day other than a Saturday, Sunday or other day on which banking
institutions in Denver, Colorado are authorized or required by law to
close.
2
“By-laws”
shall
mean the by-laws or analogous instrument governing the operations of the
Company, including all amendments and supplements thereto.
“Charter
Documents”
shall
mean the articles of incorporation filed with the appropriate Governmental
Authorities of the Company, including all amendments and supplements
thereto.
“Closing”
shall
mean the closing of the purchase and sale of the Common Stock and the Warrants
pursuant to this Agreement.
“Closing
Date”
shall
mean the date and time for delivery and payment of the Common Stock and Warrants
as finally determined pursuant to Section 2.3 hereof.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Common
Stock”
shall
mean the common stock, $.01 par value, of the Company.
“Company”
shall
have the meaning assigned to such term in the introductory paragraph
hereto.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as the same may from
time to time be amended, and the rules and regulations of any governmental
agency or authority, as from time to time in effect, promulgated
thereunder.
“Final
Closing Date”
shall
mean the last date and time for delivery and payment of the Common Stock and
Warrants as finally determined pursuant to Section 2.3 hereof.
“Fiscal
Year”
or
“fiscal
year”
shall
mean each 12-month period ending on October 31 of each year.
“Governmental
Authorities”
shall
mean any federal, state or municipal court or other governmental department,
commission, board, bureau, agency or instrumentality, governmental or
quasi-governmental, domestic or foreign.
“Investment
Amount”
shall
mean the amount paid or agreed to be paid for the Common Stock and Warrants,
as
indicated below each Purchaser’s signature.
“IRS”
shall
mean the Internal Revenue Service and any governmental body or agency succeeding
to the functions thereof.
“Laws”
shall
mean all U.S. and foreign federal, state or local statutes, laws, rules,
regulations, ordinances, codes, policies, rules of common law, and the like,
now
or hereafter in effect, including any judicial or administrative interpretations
thereof, and any judicial or administrative orders, consents, decrees or
judgments.
“Lien”
shall
mean any security interest, pledge, bailment, mortgage, hypothecation, deed
of
trust, conditional sales and title retention agreement (including any lease
in
the nature thereof), charge, encumbrance or other similar arrangement or
interest in real or personal property, whether such interest is based on common
law, statute or contract.
3
“Material
Adverse Effect”
shall
mean a material adverse effect on the business, properties, assets, liabilities
or condition (financial or otherwise) of the Company, individually and/or taken
as a whole.
“Options”
shall
mean options issued pursuant to either the Company’s 2000 Equity Incentive Plan
or the 2006 Stock Option Plan, and any other options outstanding as of the
Closing Date.
“Person”
shall
mean any individual, partnership, limited partnership, corporation, limited
liability Company, association, joint stock company, trust, joint venture,
unincorporated organization or governmental entity or department, agency or
political subdivision thereof.
“Plan”
shall
mean any employee benefit plan (within the meaning of Section 3(3) of
ERISA), established or maintained by the Company or any member of the Controlled
Group.
“Properties
and Facilities”
shall
have the meaning assigned to such term in Section 4.1(q)
hereof.
“Property”
shall
mean, as to any Person, all types of real, personal, tangible, intangible or
mixed property owned by such Person whether or not included in the most recent
balance sheet of such Person and its subsidiaries under GAAP.
“Proprietary
Rights”
shall
mean all patents, trademarks, trade names, service marks, copyrights,
inventions, production methods, licenses, formulas, know-how, trade secrets
and
good will related to any of the foregoing, regardless of whether such are
registered with any Governmental Authorities, including applications
therefor.
“Purchase
Documents”
shall
mean this Agreement, the Warrants and all other agreements, instruments and
documents delivered in connection herewith or therewith as any or all of the
foregoing may be supplemented or amended from time to time.
“Purchaser”
shall
have the meaning assigned to such term in the introductory paragraph hereto.
“SEC”
means
the U.S. Securities and Exchange Commission.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Subsidiary”
of
any
corporation shall mean any other corporation or limited liability company of
which the outstanding capital stock possessing a majority of voting power in
the
election of directors (otherwise than as the result of a default) is owned
or
controlled by such corporation directly or indirectly through
Subsidiaries.
4
"Trading
Day”
means
(i) a day on which the Common Stock is traded on a Trading Market (other than
the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
Market (other than the OTC Bulletin Board), a day on which the Common Stock
is
traded in the over-the-counter market, as reported by the OTC Bulletin Board,
or
(iii) if the Common Stock is not quoted on any Trading Market, a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in the event
that the Common Stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
“Trading
Market”
means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Stock Market, or OTC Bulletin Board on which the Common Stock is listed
or quoted for trading on the date in question.
“Transaction
Documents”
shall
have the meaning assigned to such term in Section 4.1(f) hereof.
“Transactions”
shall
mean the purchase of the Common Stock and the Warrants as contemplated by this
Agreement, the Warrants, certificates for the Common Stock and all other
agreements contemplated hereby and thereby.
“Underlying
Common Stock”
shall
mean the Common Stock issued or issuable upon exercise of the Warrants and
by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization.
“Warrants”
shall
have the meaning assigned to such term in Section 2.1 hereof.
1.2 Accounting
Principles The
character or amount of any asset, liability, capital account or reserve and
of
any item of income or expense to be determined, and any consolidation or other
accounting computation to be made, and the construction of any definition
containing a financial term, pursuant to this Agreement shall be determined
or
made in accordance with generally accepted accounting principles in the United
States of America consistently applied (“GAAP”).
1.3 Other
Definitional Provisions; Construction.
Whenever
the context so requires, neuter gender includes the masculine and feminine,
the
singular number includes the plural and vice versa. The words “hereof” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not in any particular provision of this
agreement, and references to section, article, annex, schedule, exhibit and
like
references are references to this Agreement unless otherwise specified.
References in this Agreement to any Persons shall include such Persons’
successors and permitted assigns.
5
ARTICLE
2
ISSUE
AND
SALE OF COMMON
STOCK AND WARRANTS
2.1 Authorization
and Issuance of the Common
Stock and Warrants.
The
Company has duly authorized an offering of its securities (the “Offering”) of up
to 3,191,490 shares of Common Stock and Warrants to purchase up to 1,595,745
shares of Common Stock (the “Warrants”), to be substantially in the form of the
Warrant attached hereto as Exhibit A. The Warrants are exercisable immediately
and until the four year anniversary of the Closing Date, with an exercise price
equal to the closing sales price of the Common Stock on the Closing Date. This
Agreement is entered into for the purpose of the Purchasers subscribing in
the
Offering through the Closing Date in an aggregate amount up to $7,500,000.
The
Investment Amount for each Purchaser is indicated on such Purchaser’s signature
page to this Agreement. The Company reserves the right to reject any
subscription for any reason, in its discretion. Officers and directors of the
Company may participate in the Offering, on the same terms as other
subscribers
2.2 Sale
and Purchase.
Subject
to the terms and conditions and in reliance upon the representations, warranties
and agreements set forth herein, the Company shall sell to the Purchasers units
consisting of two shares of its Common Stock and one Warrant at a unit price
of
$4.70 unit.
2.3 The
Closing.
Delivery
of and payment for the Shares of Common Stock and Warrants (the “Closing”) shall
be made at the offices of ▇▇▇▇▇, Figa & Will, P.C., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Village, Colorado, 80111 commencing at 10:00
a.m.,
local time, on February 23, 2007, or at such place or on such other date as
may
be mutually agreeable to the Company and the Purchasers. The date and time
of
the Closing as finally determined pursuant to this Section 2.3 are referred
to herein as the “Closing Date.” Delivery of the Common Stock and Warrants shall
be made to the Purchasers against payment of the Investment Amount therefor,
by
check or by wire transfer to the following account, and after this Agreement
has
been accepted by the Company:
▇▇▇▇▇
Figa & Will, PC Colorado Lawyers Trust Account
Colorado
Business Bank
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA
Routing Number: ▇▇▇▇▇▇▇▇▇
Account
Name: ▇▇▇▇▇, Figa & Will, P.C. COLTAF Trust Account
Account
Number: ▇▇▇▇▇▇▇
The
Common Stock and the Warrants shall be issued in name of the Purchaser. In
the
event funds are wired but the subscription is rejected by the Company (which
it
may do in its sole discretion), then the funds for the rejected subscription
will be returned to the subscriber, without interest or deduction.
6
ARTICLE
3
CONDITIONS
3.1 Conditions
to Purchase of Securities.
The
obligation of the Purchaser to purchase and pay for the Common Stock and
Warrants is subject to the satisfaction, prior to or at the Closing, of the
following conditions:
(a) Representations
and Warranties True.
The
representations and warranties contained in Article 4 hereof shall be true
and correct in all material respects at and as of the Closing Date as though
then made, except to the extent of changes caused by the transactions expressly
contemplated herein.
(b) Material
Adverse Change.
There
will have been no material adverse change in the business of the Company since
the filing of its most recent SEC Report on Form 10-KSB.
(c) Closing
Documents.
The
Company shall have delivered or will cause to be delivered to each Purchaser
all
of the following documents in form and substance satisfactory to the
Purchaser:
(i) one
or
more certificates representing the aggregate number of shares of the Common
Stock purchased by each Purchaser, such certificates to bear a restrictive
legend in compliance with the Securities Act;
(ii) one
or
more Warrants to purchase the aggregate number of shares purchased by each
Purchaser, duly completed and executed by the Company;
(iii)such
other documents relating to the Transactions contemplated by this Agreement
the
Purchaser may reasonably request.
(d) Proceedings.
All
proceedings taken or required to be taken in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto will be satisfactory in form and substance to the
Purchaser.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE
COMPANY
4.1 Representations
and Warranties of the Company.
As
a
material inducement to the Purchasers to enter into this Agreement and purchase
the Common Stock and the Warrants the Company hereby represents and warrants
to
the Purchaser as follows:
(a) Organization
and Power.
The
Company is duly organized, validly existing and in good standing under the
laws
of its state of organization. The Company has all requisite corporate or other
organizational power and authority and all material licenses, permits, approvals
and authorizations necessary to own and operate its properties, to carry on
its
businesses as now conducted and presently proposed to be conducted and to carry
out the Transactions, and is qualified to do business in every jurisdiction
where the failure to so qualify might reasonably be expected to have a Material
Adverse Effect. The Company has its principal executive office in Coeur d’Alene,
Idaho. The copies of the Charter Documents and By-Laws of the Company that
have
been filed with the SEC reflect all amendments made thereto at any time prior
to
the date of this Agreement and are correct and complete.
7
(b) Principal
Business.
The
Company is an exploration stage enterprise engaged in the business of mining.
The Company currently owns (through its subsidiary) twelve concessions, which
are located in the municipality of Sierra Mojada, Coahuila, Mexico (the
“Business”).
(c) SEC
Reports; Financial Statements.
Except
as described in Schedule
4.1(c),
the
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof
reports filed on Form 10-KSB, Form 10-QSB, and Form 8-K, for the twelve months
preceding the date hereof (or such shorter period as the Company was required
by
law to file such reports) (the foregoing materials being collectively referred
to herein as the "SEC Reports" and, together with the Schedules to this
Agreement (if any), the "Disclosure Materials"). As of the respective dates
of
each of the SEC Reports, the SEC Reports complied in all material respects
with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports,
when
filed, contained any untrue statement of a material fact or omitted to state
a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect
at
the time of filing. Such financial statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved, except
as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject,
in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. The Company’s Common Stock is registered pursuant to Section 12(b)
of the Exchange Act, and the Company has taken no action designed to, or which
to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any
notification that the SEC is contemplating terminating such registration.
(d) Capitalization
and Related Matters.
As of
the Closing Date and immediately thereafter, the authorized capital stock of
the
Company and the shares of stock that are issued, outstanding and reserved for
issuance upon exercise of warrants and Options and exercise of the Warrants
issued hereunder (after giving effect to anti-dilution adjustments) are as
set
forth on Schedule
4.1(d)
attached
hereto. As of the Closing Date, the Company will not have outstanding any
capital stock or securities convertible or exchangeable for any shares of its
capital stock except as set forth in the Capitalization Schedule, and will
not
have outstanding any rights or options to subscribe for or to purchase its
capital stock or any stock or securities convertible into or exchangeable for
its capital stock, except as set forth in the Capitalization Schedule. As of
the
Closing Date, the Company will not be subject to any obligation (contingent
or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock, except as set forth herein and the Charter Documents,
respectively, as in effect on the date hereof. As of the Closing, all of the
outstanding shares of the Company’s capital stock will be validly issued, fully
paid and nonassessable. There are no statutory or contractual stockholders’
preemptive rights or notices with respect to the issuance of the Common Stock
and Warrants hereunder. Subject to and based on the accuracy of all
representations made by all Purchasers in this Offering, the offer, sale and
issuance of the Common Stock and Warrants hereunder do not require registration
under the
Securities Act or any applicable state securities laws.
8
(e) Subsidiaries.
Except
as set forth on Schedule
4.1(e),
the
Company does not own, or hold any rights to acquire, any shares of stock or
any
other security or interest in any other Person.
(f) Authorization;
No Breach.
The
execution, delivery and performance of this Agreement, the other Purchase
Documents and all other agreements, instruments, certificates and documents
contemplated hereby and thereby to which the Company is a party (collectively,
the “Transaction
Documents”),
and
the consummation of the Transactions have been duly authorized by the Company.
The execution and delivery by the Company of the Transaction Documents and
the
consummation of the Transactions do not and will not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute
a
default under, (iii) result in the creation of any Lien upon any of the
Company’s capital stock or assets pursuant to, (iv) give any third party
the right to accelerate any obligation under, (v) result in a violation of,
or
(vi) require any authorization, consent, approval, exemption or other
action by or notice to any Governmental Authority or Person pursuant to, the
Charter Documents of the Company, or any law, statute, rule or regulation to
which the Company is subject, or any agreement, instrument, order, judgment
or
decree to which the Company is a party or to which it or its assets are
subject.
(g) Governmental
Approvals.
Except
as specifically provided by the Transaction Documents, no registration with
or
consent or approval of, or other action by, any Governmental Authority is or
will be required in connection with the consummation of the Transactions by
the
Company.
(h) Enforceability.
This
Agreement constitutes, and each of the other Transaction Documents when duly
executed and delivered by the Company will constitute, legal, valid and binding
obligations of the Company enforceable in accordance with their respective
terms.
(i) No
Material Adverse Change.
Since
the date of the latest audited financial statements included within the SEC
Reports, except as specifically disclosed in the SEC Reports or as described
on
Schedule
4.1.(i),
(i)
there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses and other liabilities incurred in the ordinary course
of business consistent with past practice and (B) liabilities not required
to be
reflected in the Company's financial statements pursuant to GAAP or required
to
be disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting or the identity of its auditors, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements
to
purchase or redeem any shares of its capital stock, and (v) the Company has
not
issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company stock option plans. The Company does not have
pending before the SEC any request for confidential treatment of
information.
9
(j) Litigation.
Except
as described in the SEC Reports, there are no actions, suits or proceedings
at
law or in equity or by or before any arbitrator or any Governmental Authority
now pending or, to the best knowledge of the Company’s management after due
inquiry, threatened against or filed by or affecting the Company or any of
its
directors or officers or the businesses, assets or rights of the
Company.
(k) Compliance
with Laws.
The
Company is not in violation of any applicable Law in any material respect.
The
Company is not in default with respect to any judgment, order, writ, injunction,
decree, rule or regulation of any Governmental Authority. The Company is not
in,
and the consummation of the Transactions will not cause any, default concerning
any judgment, order, writ, injunction or decree of any Governmental Authority,
and there is no investigation, enforcement action or regulatory action pending
or threatened against or affecting the Company by any Governmental Authority.
There is no remedial or other corrective action that the Company is required
to
take to remain in compliance with any judgment, order, writ, injunction or
decree of any Governmental Authority or to maintain any material permits,
approvals or licenses granted by any Governmental Authority in full force and
effect.
(l) Transactions
With Affiliates and Employees.
Except
as set forth in the SEC Reports, none of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest
or
is an officer, director, trustee or partner.
(m) Certain
Fees.
Except
for any payments that may be due to Persons set forth on Schedule
4.1(m),
no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement.
(n) Application
of Takeover Protections.
The
Company has taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including
any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company's Charter Documents, or the laws of its state of incorporation
that is or could become applicable to the Purchaser as a result of the Purchaser
and the Company fulfilling their obligations or exercising their rights under
the Transaction Documents, including without limitation the Company's issuance
of the Common Stock, the Warrants and the Underlying Common Stock and the
Purchaser's ownership of the Common Stock, the Warrants, and the Underlying
Common Stock.
10
(o) Taxes.
Except
as set forth on Schedule
4.1(o),
the
Company has filed or caused to be filed all Federal, state and local tax returns
that are required to be filed by it, and has paid or caused to be paid all
taxes
shown to be due and payable on such returns or on any assessments received
by
it, including payroll taxes.
(p) Labor
and Employment.
The
Company is and each of its Plans are in compliance in all material respects
with
those provisions of ERISA, the Code, the Age Discrimination in Employment Act,
and the regulations and published interpretations thereunder which are
applicable to the Company or any such Plan. The Company is in compliance in
all
material respects with all labor and employment laws, rules, regulations and
requirements of all applicable domestic and foreign jurisdictions. There are
no
pending or threatened labor disputes, work stoppages or strikes.
(q) Properties;
Security Interests.
Except
as set forth in the SEC Reports, the Company has good and marketable title
to,
or valid leasehold interests in, all of the material assets and properties
used
or useful by the Company in the Business (collectively, the “Properties
and Facilities”).
All of
the Properties and Facilities are in good
repair, working order and condition and all such assets and properties are,
except as set forth in the SEC Reports, free of all Liens. The Properties and
Facilities constitute all of the material assets, properties and rights of
any
type used in or necessary for the conduct of the Business.
(r) Intellectual
Property.
The
Company has good title and ownership of, or has sufficient rights to, all
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes and patents, including without
limitation the Proprietary Rights (collectively, the “Intellectual
Property”)
used
in or necessary for its business as now conducted or as proposed to be
conducted. The Intellectual Property Schedule attached hereto contains a
complete and accurate list of all outstanding options, licenses, or agreements
of any kind relating to the Intellectual Property owned by the Company
(“Out-Licenses”),
and
any options, licenses or agreements of any kind with respect to the Intellectual
Property of any other person or entity that the Company is bound by or a party
to, excluding standard, off-the-shelf commercial software licensing agreements
(“In-Licenses”).
None
of the Intellectual Property used in or necessary for the Company’s business as
now conducted conflicts with or infringes, nor has the Company received any
written or oral communications alleging that the Company has violated or, by
conducting its business, would violate, any Intellectual Property of any other
person or entity. The transactions contemplated under this Agreement will not
alter, impair or otherwise affect any rights of the Company in the Intellectual
Property. The Company has taken commercially reasonable measures to protect
the
proprietary nature of the Intellectual Property and to maintain in confidence
all trade secrets and confidential information owned or used by the
Company.
There
are
no legal or governmental proceedings, including interference, re-examination,
reissue, opposition, nullity, or cancellation proceedings pending that relate
to
any of the Intellectual Property, other than review of pending patent
applications, and the Company is not aware of any information indicating that
such proceedings are threatened or contemplated by any governmental entity
or
any other Person.
11
The
Company is not aware that any of its employees or independent contractors is
obligated under any contract (including licenses, covenants or commitments
of
any nature) or other agreement, or subject to any judgment, decree or order
of
any court or administrative agency, that would interfere with the use of such
employee’s or independent contractor’s best efforts to promote the interest of
the Company or that would conflict with the Company’s business as now conducted
or as proposed to be conducted. Neither the execution or delivery of this
Agreement, nor the carrying on of the Company’s business by the employees and
independent contractors of the Company, nor the conduct of the Company’s
business as now conducted, or as currently proposed to be conducted, will,
to
the Company’s knowledge, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee or independent contractor
is now obligated. It is not and will not be necessary to use any inventions
of
any of the Company’s employees (or persons the Company currently intends to
hire) made prior to their employment by the Company. All of the Company’s
significant employees have executed Confidential Information and Invention
Assignment Agreements with the Company. To the knowledge of the Company, no
key
employee of the Company is in violation of any term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, or any other contract or agreement or any restrictive covenant
relating to the right of any such key employee to be employed by the Company
because of the nature of the business conducted or to be conducted by the
Company or relating to the use of trade secrets or proprietary information
of
others, and the continued employment of the key employees does not subject
the
Company or any Purchaser to any liability to third parties.
To
the
knowledge of the Company, no key employee of the Company whose termination,
either individually or in the aggregate, would have a Material Adverse Effect,
has expressed any present intention of terminating his employment with the
Company
4.2 Absolute
Reliance on the Representations and Warranties.
All
representations and warranties contained in this Agreement and any financial
statements, instruments, certificates, schedules or other documents delivered
in
connection herewith, shall survive the execution and delivery of this Agreement
regardless of any investigation made by the Purchaser or on the Purchaser’s
behalf.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
5.1 Purchase
Entirely for Its Own Account.
This
Agreement is made with the Purchaser in reliance upon the Purchaser’s
representation to the Company that the Common Stock and the Warrants will be
acquired for investment for the Purchaser’s own account, not as a nominee or
agent, and not with any agreement for the resale or distribution of any part
thereof Subject to the immediate preceding sentence, nothing contained herein
shall be deemed a representation or warranty by the Purchaser to hold any of
the
securities for any period of time.
12
5.2 Disclosure
of Information.
The
Purchaser has had the opportunity to ask questions of, and receive answers
from
officers and directors of the Company, to review the SEC Reports, and to obtain
additional information regarding the Company and this Offering. The Purchaser
has been given access to information regarding the Company and has utilized
such
access to the Purchaser’s satisfaction for the purpose of obtaining such
information regarding the Company as the Purchaser has reasonably requested.
Such information includes the terms and conditions of the offering of the Common
Stock and Warrants to the Purchaser, and the plan of operations of the Company’s
business and financial condition of the Company. Neither such inquiries nor
any
other investigation conducted by or on behalf of the Purchaser or its
representatives or counsel shall modify, amend or affect the Purchaser’s right
to rely on the truth, accuracy and completeness of the Disclosure Materials
and
the Company’s representations and warranties contained in the Purchase
Documents.
5.3 Accredited
and Sophisticated Investor; Investment Experience.
Purchaser
represents that it is a sophisticated investor and an “accredited investor” as
defined in Rule 501 under the Securities Act, for the reason(s) indicated
below:
| ______ |
An
employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, if the investment decision
is made
by a plan fiduciary, as defined in Section 3(21) of such Employee
Retirement Income Security Act, which is either a bank, savings and
loan
association, insurance company or registered investment advisor,
or if the
employee benefit plan has total assets in excess of $5,000,000 or,
if a
self directed plan, with investment decisions made solely by persons
that
are otherwise accredited investors.
|
_____ |
A
trust with total assets in excess of $5,000,000 not formed for the
specific purpose of acquiring the Shares, whose purchase is directed
by a
person who has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits and risks
of an
investment in the Shares.
A
bank as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A)
of the
Act, whether acting in its individual or fiduciary capacity.
|
| ______ |
A
private business development company as defined in Section 202(a)(22)
of
the Invest-ment Advisors Act of 1940.
|
_____ |
A
broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934.
|
| ______ |
An
organization described in Section 501(c)(3) of the Internal Revenue
Code,
or a corporation, Massachusetts or similar business trust, or a
partnership (in each case not formed for the specific purpose of
acquiring
the Shares) with total assets in excess of $5,000,000.
|
_____ |
An
insurance company as defined in Section 2(13) of the Act.
An
investment company registered under the Investment Company Act of
1940 or
a business development company as defined in Section 2(a)(48) of
the
Investment Company Act of 1940.
|
| ______ |
A
natural person whose net worth, individually or jointly with spouse,
exceeds $1,000,000 at this time (including the value of that person's
principal residence valued at either (x) cost, including cost of
improvements, net of current encumbrances on the property, or (y)
the
appraised value of the property as determined by a written appraisal
used
by an institution lender making a loan to that person secured by
the
property, including subsequent improvements, net of current encumbrances
on the property).
|
_____ |
A
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
A
plan established and maintained by a state, its political subdivisions,
or
any agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees, if such plan has total assets in
excess
of $5,000,000.
|
13
The
Purchaser represents that it is an investor in restricted securities and
acknowledges that it is able to fend for itself, can bear the economic risk
of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Common Stock and Warrants and can bear the economic risk of loss of
the
entire investment in the securities being purchased. The Purchaser represents
that it is not purchasing the Common Stock and Warrants as a result of any
advertisement, article, notice or other communication or any other general
solicitation.
5.4 Restricted
Securities.
The
Purchaser acknowledges Common Stock, the Warrants and the Underlying Common
Stock have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available.
5.5 Legends.
The
Company may place an appropriate legend on the Common Stock and the Warrants
owned by the Purchaser or the Underlying Common Stock concerning the
restrictions set forth in this Article 5. Upon the assignment or transfer by
the
Purchaser or any of its successors or assignees of all or any part of the Common
Stock or Warrants, the term “Purchaser” as used herein shall thereafter mean, to
the extent thereof, the then holder or holders of such Common Stock or Warrants,
or portion thereof.
5.6 Survival
of Purchaser Representations.
All
representations and warranties contained in this Agreement by Purchaser and
any
financial statements, instruments, certificates, schedules or other documents
delivered in connection herewith, shall survive the execution and delivery
of
this Agreement, regardless of any investigation made by the Company or on the
Company’s behalf.
ARTICLE
6
COVENANTS
6.1 Affirmative
Covenants
by
Company. The
Company covenants that, so long as the Purchaser owns any Common Stock or
Underlying Common Stock or Warrants the Company shall:
14
(a) Existence.
Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence.
(b) Furnishing
of Information.
Timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company pursuant to the
Exchange Act, and if the Company is not required to file reports pursuant to
such laws, it will prepare and furnish to the Purchaser and make publicly
available in accordance with Rule 144(c) such information as is required for
the
Purchaser to sell the Common Stock and Underlying Common Stock under Rule 144.
The Company further covenants that it will take such further action as any
holder of Common Stock, Warrants and or the Underlying Common Stock may
reasonably request, all to the extent required from time to time to enable
such
Person to sell the Shares and Underlying Common Stock without registration
under
the Securities Act within the limitation of the exemptions provided by Rule
144.
(c) Common
Stock Reserve.
Maintain in reserve, at all times that the Warrants are unexercised, authorized,
but unissued and unreserved, shares of Common Stock for issuance upon exercise
of the Warrants.
(d) Further
Assurances.
With
reasonable promptness, execute and deliver to the Purchaser, from time to time,
upon the reasonable request of the Purchaser, such supplemental agreements,
statements, assignments and transfers, or instructions on documents as the
Purchaser may request in order that the full intent of this Agreement and the
other Purchase Documents may be carried into effect.
ARTICLE
7
MISCELLANEOUS
7.1 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Company may not
assign or transfer its rights hereunder or any interest herein or delegate
its
duties hereunder.
7.2 Modifications
and Amendments.
The
provisions of this Agreement may be modified, waived or amended, but only by
a
written instrument signed by the Company and the Purchaser.
7.3 No
Implied Waivers; Cumulative Remedies; Writing Required.
No
delay
or failure in exercising any right, power or remedy hereunder shall affect
or
operate as a waiver thereof; nor shall any single or partial exercise thereof
or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive
of
any rights or remedies that the Purchaser or any holder of Warrants or
Underlying Common Stock would otherwise have. Any waiver, permit, consent or
approval of any kind or character of any breach or default under this Agreement
or any such waiver of any provision or condition of this Agreement must be
in
writing, and shall be effective only to the extent in such writing specifically
set forth.
15
7.4 Fees
and Expenses.
Each
party shall pay the fees and expenses of its advisers, counsel, accountants
and
other experts, if any, and all other expenses incurred by such party incident
to
the negotiation, preparation, execution, delivery and performance of the
Purchase Documents.
7.5 Notices.
All
notices and other communications given to or made upon any party hereto in
connection with this Agreement shall, except as otherwise expressly herein
provided, be in writing (including telecopy, but in such case, a confirming
copy
will be sent by another permitted means) and mailed via certified mail,
telecopied or delivered by guaranteed overnight parcel express service or
courier to the respective parties, as follows:
to
the
Company:
Metalline
Mining Company
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Coeur
d’▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇
Figa & Will, P.C.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
and
To
the
Purchasers and their respective counsel at the addresses set forth below their
signatures;
or
in
accordance with any subsequent written direction from the recipient party to
the
sending party. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective upon delivery if delivered
by
courier or overnight parcel express service; in the case of certified mail,
three (3) Business Days after the date sent; or in the case of telecopy or
email, when received.
7.6 Survival.
All
representations, warranties, covenants and agreements of the Company contained
herein or made in writing in connection herewith shall survive the execution
and
delivery of this Agreement, the Closing and the purchase and delivery of the
Common Stock and Warrants.
7.7 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Colorado, without regard to conflict of laws
principles.
16
7.8 Severability.
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement is held to be prohibited by or invalid under applicable law in any
jurisdiction, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating any other provision of this
Agreement.
7.9 Headings.
Article, section and subsection headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
7.10 Counterparts.
This
Agreement may be executed in any number of counterparts and by any party hereto
on separate counterparts, each of which, when so executed and delivered, shall
be an original, but all such counterparts shall together constitute one and
the
same instrument.
7.11 Integration.
This
Agreement and the other Purchase Documents set forth the entire understanding
of
the parties hereto with respect to all matters contemplated hereby and supersede
all previous agreements and understandings among them concerning such matters.
No statements or agreements, oral or written, made prior to or at the signing
hereof, shall vary, waive or modify the written terms hereof.
7.12 Independent
Nature of Purchaser Obligations and Rights. Each Purchaser acknowledges that
it has sole responsibility for its own due diligence investigation and its
own
investment decision and that in connection with its investigation and its
investment decision (i) such Purchaser has not relied on any representation
by
or on behalf of the Company not set forth in the SEC Reports or in this
Agreement, and (ii) such Purchaser has not relied on the fact that any other
Person has decided to invest in the Offering.
17
SIGNATURE
PAGE TO
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
COMPANY:
METALLINE
MINING COMPANY
a
Nevada
corporation
By:
_______________________________________
Name:
_____________________________________
Title:
______________________________________
PURCHASER:
__________________________________________
By:
_______________________________________
Name: _____________________________________
|
Title:
|
____________________________________
|
Investment
Amount: $
Shares
of Common Stock:
Warrants
to Purchase Shares of Common Stock:
Address
for Notices to:
Name:_____________________________________
Email
address:______________________________
Street
Address: _____________________________
_________________________________________
_________________________________________
Telephone:_________________________________
With
a
copy to: _____________________________
_________________________________________
_________________________________________
EXHIBITS
EXHIBIT
A Form
of
Warrant
SCHEDULES
Schedule
4.1(c)
|
·
|
None
|
Schedule
4.1(d)
|
·
|
The
Company’s authorized capital stock is 160,000,000 shares of Common Stock,
$0.01 par value, of which the following are issued, outstanding and
reserved for issuance:
|
|
o
|
34,471,912
shares of Common Stock are outstanding as of February 13, 2007.
|
|
o
|
2,408,000
shares of Common Stock are reserved upon exercise of stock options
to be
granted under the Company’s 2000 Equity Incentive Plan or the 2006 Stock
Option Plan.
|
|
o
|
12,153,347 shares
of Common Stock are reserved upon exercise of warrants and stock
options
|
|
o
|
48,000
shares of Common Stock that have accrued as compensation for services
but
are not issued.
|
|
o
|
Any
other securities identified as issued, outstanding or reserved for
issuance in the SEC Reports.
|
Schedule
4.1(e)
|
·
|
See
Exhibit 21.1 to the Company’s Form 10-KSB for the fiscal year ended
October 31, 2006, filed on January 31,
2007
|
Schedule
4.1(i)
|
·
|
Possible
redemption of 210,000 shares of Common Stock held by Mexican
employees
|
|
·
|
Possible
adoption of shareholders’ rights plan resulting in dividend on all Common
Stock shares.
|
Schedule
4.1(m)
|
·
|
Other
finders that may be identified by the
Company.
|
Schedule
4.1(o)
|
·
|
None
|
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S.
SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY
INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES ACT.
Issue
Date: ▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇
TO PURCHASE SHARES OF COMMON STOCK
OF
METALLINE
MINING COMPANY
THIS
CERTIFIES that, for value received, ___________ is entitled to purchase from
METALLINE MINING COMPANY, a Nevada corporation (the “Corporation”), subject to
the terms and conditions hereof, _________ shares (the “Warrant Shares”) of
common stock, $0.01 per share par value (the “Common Stock”). This warrant,
together with all warrants hereafter issued in exchange or substitution for
this
warrant, is referred to as the “Warrant” and the holder of this Warrant is
referred to as the “Holder.” The number of Warrant Shares is subject to
adjustment as hereinafter provided. Notwithstanding anything to the contrary
contained herein, this Warrant shall expire at 5:00pm MST on March 6, 2011
(the
“Termination Date”).
Exercise
of Warrants.
(a) The
Holder may, at any time on or after March 6, 2007 and prior to the Termination
Date, exercise this Warrant in whole or in part at an exercise price per share
equal to $2.42 per share, subject to adjustment as provided herein (the “Warrant
Price”), by the surrender of this Warrant (properly endorsed) at the principal
office of the Corporation, or at such other agency or office of the Corporation
in the United States of America as the Corporation may designate by notice
in
writing to the Holder at the address of such Holder appearing on the books
of
the Corporation, and by payment to the Corporation of the Warrant Price in
lawful money of the United States by check or wire transfer for each share
of
Common Stock being purchased. Upon any partial exercise of this Warrant, there
shall be executed and issued to the Holder a new Warrant in respect of the
shares of Common Stock as to which this Warrant shall not have been exercised.
In the event of the exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Shares so purchased, as applicable,
registered in the name of the Holder, shall be delivered to the Holder hereof
as
soon as practicable after the rights represented by this Warrant shall have
been
so exercised.
2.
Reservation
of Warrant Shares.
The
Corporation agrees that, prior to the expiration of this Warrant, it will at
all
times have authorized and in reserve, and will keep available, solely for
issuance or delivery upon the exercise of this Warrant, the number of Warrant
Shares as from time to time shall be issuable by the Corporation upon the
exercise of this Warrant.
3.
No
Stockholder Rights.
This
Warrant shall not entitle the holder hereof to any voting rights or other rights
as a stockholder of the Corporation.
4.
Transferability
of Warrant.
Prior
to the Termination Date and subject to compliance with applicable laws, this
Warrant and all rights hereunder are transferable, in whole or in part, at
the
office or agency of the Corporation by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed for transfer.
5.
Certain
Adjustments.
With
respect to any rights that Holder has to exercise this Warrant and convert
into
shares of Common Stock, Holder shall be entitled to the following
adjustments:
(a) Reclassification,
Recapitalization, etc.
If the
Corporation at any time shall, by subdivision, combination or reclassification
of securities, recapitalization, automatic conversion, or other similar event
affecting the number or character of outstanding shares of Common Stock, or
otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result
of
such change with respect to the securities that were subject to the purchase
rights under this Warrant immediately prior to such subdivision, combination,
reclassification or other change.
(b) Split
or Combination of Common Stock and Stock Dividend.
In case
the Corporation shall at any time subdivide, redivide, recapitalize, split
(forward or reverse) or change its outstanding shares of Common Stock into
a
greater number of shares or declare a dividend upon its Common Stock payable
solely in shares of Common Stock, the Warrant Price shall be proportionately
reduced and the number of Warrant Shares proportionately increased. Conversely,
in case the outstanding shares of Common Stock of the Corporation shall be
combined into a smaller number of shares, the Warrant Price shall be
proportionately increased and the number of Warrant Shares proportionately
reduced. Notwithstanding the foregoing, in no event will the Warrant Price
be
reduced below the par value of the Common Stock.
6.
Legend
and Stop Transfer Orders.
Unless
the Warrant Shares have been registered under the Securities Act, upon exercise
of any part of the Warrant, the Corporation shall instruct its transfer agent
to
enter stop transfer orders with respect to such Warrant Shares, and all
certificates or instruments representing the Warrant Shares shall bear on the
face thereof substantially the following legend:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S.
SECURITIES ACT, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY
INTEREST OR PARTICIPATION HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE SECURITIES
ACT.
7.
Redemption.
The
Corporation shall have the right, upon 30 days’ written notice to the Holder
(“Redemption Notice”), to redeem all or any portion of this Warrant at a price
equal to $.01 per Warrant Share, provided that (i) the Warrant Shares have
been
registered for resale pursuant to the Securities Act, and are freely tradable
without restriction or legend for at least the 30-day period preceding such
notice and (ii) the Closing Bid Price (as hereinafter defined) for the Common
Stock has been at least $5.00 on each day during the 10-trading day period
immediately preceding the date of the Redemption Notice (subject to adjustment
to reflect forward or reverse stock splits, stock dividends, recapitalizations
and the like) and the average daily per share volume of the Common Stock traded
on the American Stock Exchange or the principal exchange where the Common Stock
is traded is in excess of 100,000 shares for
the
10-trading day period immediately preceding the date of the Redemption Notice
from the Corporation to the Holder. As used herein, “Closing Bid Price”, shall
mean the closing bid price of the Common Stock as reported by Bloomberg
Financial L.P. on the date in question (based on a trading day from 9:30 a.m.
ET
to 4:02 p.m. Eastern Time) (and, if no closing bid price is reported, the
closing price as so reported, and if neither the closing bid price nor the
closing price is so reported, the last reported price of the Common Stock as
determined by an independent evaluator mutually agreed to by the Holder and
the
Corporation).
8.
Miscellaneous.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of Colorado. All the covenants and provisions of this Warrant by or for
the benefit of the Corporation shall bind and inure to the benefit of its
successors and assigns hereunder. Nothing in this Warrant shall be construed
to
give to any person or corporation other than the Corporation and the holder
of
this Warrant any legal or equitable right, remedy or claim under this Warrant.
This Warrant shall be for the sole and exclusive benefit of the Corporation
and
the holder of this Warrant. The section headings herein are for convenience
only
and are not part of this Warrant and shall not affect the interpretation hereof.
Upon receipt of evidence satisfactory to the Corporation of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Corporation, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant, if mutilated, the Corporation shall
execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its
duly authorized officers this 6th day of March,
2007.
METALLINE
MINING COMPANY
By:
______________________________
▇▇▇▇▇▇
▇▇▇▇▇▇▇, President
WARRANT
EXERCISE FORM
To
Be Executed by the Holder in Order to Exercise Warrant
| To: | Metalline Mining Company |
| ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇”▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
| Attention: President |
Dated:____________
The
undersigned, pursuant to the provisions set forth in the attached Warrant No.
______, hereby irrevocably elects to purchase _________ shares of the Common
Stock of Metalline Mining Company covered by such Warrant.
The
undersigned herewith makes payment of the full purchase price for such shares
at
the price per share provided for in such Warrant. Such payment takes the form
of
$______ in lawful money of the United States.
(a) The
undersigned hereby requests that certificates for the Warrant Shares purchased
hereby be issued in the name of:
_________________________________________
_________________________________________
(please
print or type name and address)
_________________________________________
(please
insert social security or other identifying number)
and
be
delivered as follows:
_________________________________________
_________________________________________
(please
print or type name and address)
_________________________________________
(please
insert social security or other identifying number)
and
if
such number of shares of Common Stock shall not be all the shares evidenced
by
this Warrant Certificate, that a new Warrant for the balance of such shares
be
registered in the name of, and delivered to, Holder.
___________________________________
Signature
of Holder
SIGNATURE
GUARANTEE:
___________________________________
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute
this
form. Do not use this form to exercise the warrant.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
________________________________________________________________
whose address is
______________________________________________________________________________
______________________________________________________________________________
Dated:
_____________________, _______
Holder's
Signature: _________________________________________
Holder's
Address: __________________________________________
__________________________________________
Signature
Guaranteed: ___________________________________________
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust Corporation. Officers
of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.