Exhibit 4.1
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
(COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES OR
BLUE SKY LAWS ("BLUE SKY LAWS"). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES OR ANY INTEREST THEREIN MAY
BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND ANY APPLICABLE BLUE SKY LAWS OR (B) IF THE CORPORATION HAS
BEEN FURNISHED BOTH WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION AND
COUNSEL SHALL BE SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT NO
REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS, AND WITH
ASSURANCES THAT THE TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION WILL BE MADE ONLY IN COMPLIANCE WITH THE CONDITIONS OF ANY SUCH
REGISTRATION OR EXEMPTION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
EL CAPITAN PRECIOUS METALS, INC.
Scottsdale, Arizona
Warrant No.: ________ Date: _______, 2005
THIS CERTIFIES THAT, for value received, ______________________________ or
its successors or assigns (collectively, the "Holder") is entitled to purchase
from El Capitan Precious Metals, Inc. (the "Corporation"),
___________________________________ (__________) fully paid and nonassessable
shares (the "Shares") of the Corporation's common stock (the "Common Stock"), at
an exercise price of Fifty Cents ($.50) per Share (the "Exercise Price"),
subject to adjustment as herein provided. This Warrant may be exercised by
Holder at any time from and after the date hereof until the date three years
from the date hereof, at which time all of Holder's rights hereunder shall
expire.
This Warrant is subject to the following provisions, terms and conditions:
1. Exercise of Warrant. The rights represented by this Warrant may be
exercised by the Holder, in whole or in part (but not as to any fractional
shares of Common Stock), by the surrender of this Warrant (properly endorsed, if
required, at the Corporation's principal office, or such other office or agency
of the Corporation as the Corporation may designate by notice in writing to the
Holder at the address of such Holder appearing on the Corporation's books at any
time within the period above indicated), and upon payment to it by certified
check, bank draft or cash of the purchase price for such Shares (or exercise
pursuant to Section 0 below). The Corporation agrees that the Shares so
purchased shall be deemed to be issued to the Holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment for such Shares shall have been made as aforesaid.
Certificates for the Shares so purchased shall be delivered to the Holder within
a reasonable time, not exceeding 30 days, after the rights represented by this
Warrant shall have been so exercised and, unless this Warrant has expired, a new
Warrant representing the number of Shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the Holder
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within such time. The Corporation may require that any such new Warrant or any
certificate for Shares purchased upon the exercise hereof bear a legend
substantially similar to that which is contained on the face of this Warrant.
2. Cashless Exercise. The rights represented by this Warrant may be
exercised by the Holder, in whole or in part (but not to as any fractional share
of Common Stock) by the surrender of this Warrant (properly endorsed, if
required, at the Corporation's principal office, or such other office or agency
of the Corporation as the Corporation may designate by notice in writing to the
Holder at the address of such Holder appearing on the Corporation's books at any
time within the period above named), together with a notice of cashless
exercise. Upon surrender of this Warrant and receipt of a notice of cashless
exercise, the Holder shall be entitled to receive (without payment by the Holder
of any exercise price) that number of Shares equal to the number of Shares
subject to such notice of cashless exercise multiplied by a fraction, the
numerator of which shall be the difference between (i) the Fair Market Value of
one share of Common Stock and (ii) the Exercise Price, and the denominator of
which shall be the Fair Market Value of one share of Common Stock. For purposes
of this Warrant, "Fair Market Value" of the Common Stock shall be determined as
follows (as applicable): (a) if the Common Stock is traded on an exchange or is
quoted on The Nasdaq National Market or Nasdaq SmallCap Market, then the average
closing or last sale prices, respectively, reported for the date of conversion;
(b) if the Common Stock is traded in the over-the-counter market, then the
average of the closing bid and asked prices reported on the date of conversion;
(c) if the Common Stock is not publicly traded and there has been a bona fide
sale for cash on an arm's-length basis within 45 days prior to the conversion
date of such Common Stock by the Company privately to one or more investors
unaffiliated with the Company (a "Qualifying Sale"), then such most recent sales
price; or (d) if the Common Stock is not publicly traded and there has been no
Qualifying Sale, then fair market value of such stock will be determined by the
Company's board of directors, acting in good faith utilizing customary business
valuation criteria and methodologies (without discount for lack of marketability
or minority interest).
3. Transferability. This Warrant is issued upon the following terms, to
which Holder consents and agrees:
(a) Until this Warrant is transferred on the books of the
Corporation, the Corporation will treat the Holder of this Warrant,
registered as such on the books of the Corporation, as the absolute owner
hereof for all purposes without effect given to any notice to the
contrary.
(b) This Warrant may not be exercised, and this Warrant and the
Shares underlying this Warrant shall not be transferable, except in
compliance with all applicable state and federal securities laws,
regulations and orders, and with all other applicable laws, regulations
and orders.
(c) The Warrant may not be transferred, and the Shares issuable
upon exercise of this Warrant, may not be transferred without the Holder
obtaining an opinion of counsel, which opinion and counsel are
satisfactory to the Corporation, stating that the proposed transaction
will not result in a prohibited transaction under the Securities Act and
applicable Blue Sky Laws. By accepting this Warrant, the Holder agrees to
act in accordance with any conditions imposed on such transfer by any such
opinion of counsel.
(d) Neither the issuance of this Warrant nor the issuance of the
Shares issuable upon exercise of this Warrant have been registered under
the Securities Act.
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4. Certain Covenants of the Corporation. The Corporation covenants and
agrees that all Shares which may be issued upon the exercise of the rights
represented by this Warrant, upon issuance and full payment for the Shares so
purchased, will be duly authorized and issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue hereof, except
those that may be created by or imposed upon the Holder or its property. The
Corporation further covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Corporation will at all
times have authorized and available, free of preemptive or other rights, for the
purpose of issue upon exercise of the purchase rights evidenced by this Warrant,
a sufficient number of shares of its Common Stock to provide for the full
exercise of the rights represented by this Warrant.
5. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and number of Shares are subject to the following adjustments:
(a) Stock Dividend, Stock Split or Stock Combination. If (i) any
dividends on any class of the Corporation's capital stock payable in
Common Stock or securities convertible into or exercisable for Common
Stock (collectively, "Common Stock Equivalents") shall be paid by the
Corporation, (ii) the Corporation shall divide its then-outstanding shares
of Common Stock into a greater number of shares, or (iii) the Corporation
shall combine its outstanding shares of Common Stock, by reclassification
or otherwise, then, in any such event, the Exercise Price in effect
immediately prior to such event shall (until adjusted again pursuant
hereto) be adjusted immediately after such event to a price (calculated to
the nearest full cent) equal to the quotient of (x) the number of shares
of Common Stock outstanding immediately prior to such event, multiplied by
the Exercise Price in effect immediately prior to such event, divided by
(y) the total number of shares of Common Stock outstanding immediately
after such event. No adjustment of the Exercise Price shall be made if the
amount of such adjustment shall be less than $.05 per Share; but any such
adjustment not required then to be made shall be carried forward and shall
be made at the time and together with the any subsequent adjustment(s)
which, together with any adjustment(s) so carried forward, shall amount to
not less than $.05 per Share.
(b) Number of Shares Issuable on Exercise of Warrants. Upon each
adjustment of the Exercise Price pursuant to this Section, the Holder
shall thereafter (until another such adjustment) be entitled to purchase,
at the adjusted Exercise Price, the number of Shares, calculated to the
nearest full Share, equal to the quotient of (i) the product of (A) the
number of Shares issuable under this Warrant (as then adjusted pursuant
hereto prior to the current adjustment), multiplied by (B) the Exercise
Price in effect prior to such adjustment, divided by (ii) the adjusted
Exercise Price.
(c) Notice of Adjustment. Upon any adjustment of the Exercise
Price and any increase or decrease in the number of Shares of Common Stock
issuable upon the exercise of the Warrant, then, and in each such case,
the Corporation shall within 30 days thereafter give written notice
thereof, by first-class mail, postage prepaid, addressed to each Holder as
shown on the books of the Corporation. Any such notice shall state the
adjusted Exercise Price and adjusted number of Shares issuable upon the
exercise of the Warrant, and shall set forth in reasonable detail the
methods of calculation of such adjustments and the facts upon which such
calculations were based.
(d) Effect of Reorganization, Reclassification or Merger. If at
any time while this Warrant is outstanding there should be (i) any
reorganization of the Corporation's capital stock (other than splits or
combinations of Common Stock contemplated by and provided for in Section
5(a)). (ii) any consolidation or merger of the Corporation with another
corporation, limited liability Corporation, partnership or other business
entity, or any sale, conveyance, lease or other transfer by the
Corporation of all or substantially all of its property to any other
corporation, limited liability Corporation, partnership or other business
entity, which is effected in such a manner that the holders of Common
Stock shall be entitled to receive cash, stock, securities or assets with
respect to or in exchange for Common Stock, or (iii) any dividend or any
other distribution upon any class of the Corporation's capital stock
payable in capital stock of a different class, other securities of the
Corporation, or other Corporation property (other than cash), then, as a
part of such transaction, lawful provision shall be made so that Holder
shall have the right thereafter to receive, upon the exercise hereof, the
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number of shares of stock or other securities or property of the
Corporation or of the successor entity resulting from a consolidation or
merger, or of the entity to which the property of the Corporation has been
sold, conveyed, leased or otherwise transferred, as the case may be, which
the Holder would have been entitled to receive upon such capital
reorganization, reclassification of capital stock, consolidation, merger,
sale, conveyance, lease or other transfer, if this Warrant had been
exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale,
conveyance, lease or other transfer. In any such case, appropriate
adjustments (as determined by the Corporation's board of directors) shall
be made in the application of the provisions of this Warrant to the end
that the provisions set forth herein shall thereafter be applicable, as
near as reasonably may be, in relation to any shares or other property
thereafter deliverable upon the exercise of the Warrant as if the Warrant
had been exercised immediately prior to such capital reorganization,
reclassification of capital stock, such consolidation, merger, sale,
conveyance, lease or other transfer and the Holder had carried out the
terms of the exchange as provided for by such capital reorganization,
consolidation or merger.
6. No Rights as Shareholder. This Warrant shall not entitle the Holder
hereof to any voting rights or other rights as a shareholder of the Corporation.
7. Registration. The Company hereby agrees to prepare and file with the
Securities and Exchange Commission (the "SEC") a registration statement covering
the resale of the shares of the Company's common stock issuable upon exercise of
this Warrant within sixty (60) days of the final closing under the Company's
private placement of 2,000,000 Units, each unit consisting of one share of
common stock and one warrants to purchase the Company's common stock (the
"Offering"). The Company agrees to use its commercially reasonable efforts to
cause such registration statement to be declared effective by the SEC after such
filing, and to keep the registration statement effective for one year following
the date it is initially declared effective by the SEC.
8. Loss or Mutilation. Upon receipt by the Corporation from Holder of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably satisfactory
to the Corporation, and in case of mutilation upon surrender and cancellation
hereof, the Corporation will execute and deliver in lieu hereof a new Warrant of
like tenor to Holder; provided, however, in the case of mutilation no indemnity
shall be required if this Warrant in identifiable form is surrendered to the
Corporation for cancellation.
9. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to its
conflicts-of-law provisions.
10. Amendments and Waivers. The provisions of this Warrant may not be
amended, modified or supplemented, and waiver or consents to departures from the
provisions hereof may not be given, unless the Corporation agrees in writing and
has obtained the written consent of the Holder.
11. Successors and Assigns. All the terms and conditions of this Warrant
shall be binding upon and inure to the benefit of the permitted successors and
assigns of the Corporation and Holder.
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12. Headings and References. The headings of this Warrant are for
convenience only and shall not affect the interpretation of this Warrant. Unless
the context indicates otherwise, all references herein to Sections are
references to Sections of this Warrant.
13. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing. Notices sent to the Holder
shall be mailed, hand delivered or faxed and confirmed to the Holder at his, her
or its address set forth in the Corporation's records. Notices sent to the
Corporation shall be mailed, hand delivered or faxed and confirmed to El Capitan
Precious Metals, Inc., c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or to such other address as the Corporation or the
Holder shall notify the other as provided in this Section.
14. Counterparts. This warrant may be executed by the Corporation and
attested to in counterparts.
Signature Page Follows
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be signed
by its duly authorized officer on the date first set forth above.
EL CAPITAN PRECIOUS METALS, INC.:
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
ATTEST:
By:
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▇▇▇▇▇ ▇▇▇▇▇, Treasurer
Signature Page - Warrant No. ______