Attached files
| file | filename |
|---|---|
| EX-10.4 - KL Energy Corp | v204778_ex10-4.htm |
| EX-10.2 - KL Energy Corp | v204778_ex10-2.htm |
| EX-10.3 - KL Energy Corp | v204778_ex10-3.htm |
| 8-K - KL Energy Corp | v204778_8-k.htm |
EXHIBIT
10.1
NOTE
AND WARRANT PURCHASE AGREEMENT
This Note
and Warrant Purchase Agreement, dated as of November 30, 2010, (this “Agreement”) is entered into by
and among KL Energy Corp., a Nevada corporation (the “Company”), and the persons and
entities listed on the schedule of investors attached hereto as Schedule I (each, an “Investor” and, collectively,
the “Investors”).
RECITALS
A.
On the terms and subject to the conditions set forth herein, each Investor is
willing to purchase from the Company, and the Company is willing to sell to such
Investor, a secured convertible promissory note in the principal amount set
forth in Schedule I
hereto, together with a related warrant to acquire shares of the Company’s
capital stock.
B.
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the form of Note (as defined below) attached hereto as Exhibit A.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing, and the representations,
warranties, and conditions set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. The Notes and
Warrants.
(a) Issuance of Notes and
Warrants.
(i) At
the Closing (as defined below), the Company agrees to issue and sell to each of
the Investors, and, subject to all of the terms and conditions hereof, each of
the Investors severally agrees to purchase a secured convertible promissory note
in the form of Exhibit A
hereto (each, a “Note”
and, collectively, the “Notes”) in the principal
amount set forth opposite the respective Investor’s name on Schedule I
hereto. The obligations of the Investors to purchase Notes are
several and not joint.
(ii) In
consideration for the purchase by the Investors of the Notes, the Company will
issue to each Investor a warrant in the form attached hereto as Exhibit B (each, a “Warrant” and, collectively,
the “Warrants”) to
purchase up to a number of shares of Common Stock equal to the number of shares
set forth opposite each Investor’s name on the Schedule I hereto, which
number is subject to certain adjustments as set forth in the
Warrant.
(b) Delivery. The sale
and purchase of the Notes and Warrants shall take place at a closing (the “Closing”) to be held at the
offices of the company’s attorneys at 12.00 noon Pacific time on Friday the
26th
of November 2010 (the “Closing
Date”). At the Closing, the Company will deliver to each of
the Investors the respective Note and Warrant to be purchased by such Investor,
against receipt by the Company of the corresponding purchase price set forth on
Schedule I hereto (the
“Purchase
Price”). Each of the Notes and Warrants will be registered in
such Investor’s name in the Company’s records. The Closing shall
occur only if the aggregate purchase price subscribed by the Investors is no
less than $4,500,000 of new funds.
(c) Use of
Proceeds. The proceeds of the sale and issuance of the Notes
shall be used for general corporate purposes.
(d) Payments. The
Company will make all cash payments due under the Notes in immediately available
funds by 2:00 p.m. Eastern Standard time on the date such payment is due in the
manner and at the address for such purpose specified below each Investor’s name
on Schedule I hereto, or
at such other address as a Investor or other registered holder of a Note may
from time to time direct in writing.
2. Representations
and Warranties of the Company. The Company represents and
warrants to each Investor that:
(a) Due Incorporation, Qualification,
etc. The Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation; and
(ii) has the power and authority to own, lease and operate its properties and
carry on its business as now conducted.
(b) Authority. The
execution, delivery and performance by the Company of each Transaction Document
to be executed by the Company and the consummation of the transactions
contemplated thereby (i) are within the power of the Company and (ii) have been
duly authorized by all necessary actions on the part of the
Company.
(c) Enforceability. Each
Transaction Document executed, or to be executed, by the Company has been, or
will be, duly executed and delivered by the Company and constitutes, or will
constitute, a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally and general principles
of equity.
(d) Approvals. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any governmental authority or other Person (including, without
limitation, the shareholders of any Person) is required in connection with the
execution and delivery of the Transaction Documents executed by the Company and
the performance and consummation of the transactions contemplated
thereby.
3. Representations
and Warranties of Investors. Each Investor, for that Investor
alone, represents and warrants to the Company upon the acquisition of the Note
and the Warrants as follows:
(a) Binding
Obligation. Such Investor has full legal capacity, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. Each of this Agreement and the Note issued to such
Investor is a valid and binding obligation of the Investor, enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors’ rights generally and general principles of equity.
(b) Securities Law
Compliance. Such Investor has been advised that the Notes, the
Warrants and the underlying securities have not been registered under the
Securities Act, or any state securities laws and, therefore, cannot be resold
unless they are registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration requirements is
available. Such Investor is aware that the Company is under no
obligation to effect any such registration with respect to the Notes, the
Warrants or the underlying securities. Such Investor has not been
formed solely for the purpose of making this investment and is purchasing the
Notes or Warrants to be acquired by such Investor hereunder for its own account
for investment, not as a nominee or agent, and not with a view to, or for resale
in connection with, the distribution thereof. Such Investor has such
knowledge and experience in financial and business matters that such Investor is
capable of evaluating the merits and risks of such investment, is able to incur
a complete loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time. Such Investor is an
accredited investor as such term is defined in Rule 501 of Regulation D under
the Securities Act.
(c) Access to
Information. Such Investor acknowledges that the Company has
given such Investor access to the corporate records and accounts of the Company
and to all information in its possession relating to the Company, has made its
officers and representatives available for interview by such Investor, and has
furnished such Investor with all documents and other information required for
such Investor to make an informed decision with respect to the purchase of the
Notes and the Warrants.
4. Conditions to
Closing of the Investors. Each Investor’s obligations at the
Closing are subject to the fulfillment, on or prior to the Closing Date, of all
of the following conditions, any of which may be waived in whole or in part by
all of the Investors:
(a) Representations and
Warranties. The representations and warranties made by the
Company in Section 2
hereof shall have been true and correct when made, and shall be true and correct
on the Closing Date.
(b) Governmental Approvals and
Filings. Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state securities
commissions, the Company shall have obtained all governmental approvals required
in connection with the lawful sale and issuance of the Notes.
(c) Legal
Requirements. At the Closing, the sale and issuance by the
Company, and the purchase by the Investors, of the Notes and Warrants shall be
legally permitted by all laws and regulations to which the Investors or the
Company are subject.
(d) Proceedings and
Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Investors.
(e) Transaction
Documents. The Company shall have duly executed and delivered
to the Investors the following documents:
(i) This
Agreement;
(ii) Each
Note and Warrant issued hereunder; and
(iii) The
Security Agreement in the form of Exhibit C hereto (the “Security
Agreement”).
5. Conditions to
Obligations of the Company. The Company’s obligation to issue
and sell the Notes and Warrants at the Closing is subject to the fulfillment, on
or prior to the Closing Date, of the following conditions, any of which may be
waived in whole or in part by the Company:
(a) Representations and
Warranties. The representations and warranties made by the
Investors in Section 3
hereof shall be true and correct when made, and shall be true and correct on the
Closing Date.
(b) Governmental Approvals and
Filings. Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state securities
commissions, the Company shall have obtained all governmental approvals required
in connection with the lawful sale and issuance of the Notes and
Warrants.
(c) Legal
Requirements. At the Closing, the sale and issuance by the
Company, and the purchase by the Investors, of the Notes and Warrants shall be
legally permitted by all laws and regulations to which the Investors or the
Company are subject.
(d) Purchase
Price. Each Investor shall have delivered to the Company the
Purchase Price in respect of the Note and Warrant being purchased by such
Investor referenced in Section
1(b) hereof.
6. Right of First
Offer. The Company hereby grants to each Investor the right of
first offer to purchase its pro rata share of New Securities (as defined below)
which the Company may, from time to time, propose to sell and issue after the
date of this Agreement. An Investor’s pro rata share, for purposes of
this right of first offer, is equal to the ratio of (a) the number of shares of
Common Stock owned by such Investor immediately prior to the issuance of New
Securities (assuming full conversion of the Note and exercise of the Warrant
held by said Investor) to (b) the total number of shares of Common Stock
outstanding immediately prior to the issuance of New Securities (assuming full
conversion of the Notes and exercise of all outstanding Warrants, directly or
indirectly, held by all of the Investors.
(a) “New Securities” shall mean any
capital stock (including Common Stock and/or Preferred Stock) of the Company
issued in a private financing, whether now authorized or not, and rights,
convertible securities, options or warrants to purchase such capital stock, and
securities of any type whatsoever that are, or may become, exercisable or
convertible into capital stock; provided that the term “New Securities” does not
include:
(i) the
shares issuable under the Notes and Warrants;
(ii) securities
issued or issuable to officers, employees, directors, consultants, placement
agents, and other service providers of the Company (or any subsidiary) pursuant
to stock grants, option plans, purchase plans, agreements or other employee
stock incentive programs or arrangements approved by the Board of Directors of
the Company;
(iii) securities
issued pursuant to the conversion or exercise of any other outstanding
convertible or exercisable securities as of this date of this
Agreement;
(iv) securities
offered pursuant to a bona fide, firmly underwritten public offering pursuant to
a registration statement filed under the Securities Act;
(v) securities
issued or issuable pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such issuances
are approved by the Board of Directors of the Company;
(vi) securities
issued or issuable to banks, equipment lessors or other financial institutions
pursuant to a commercial leasing or debt financing transaction approved by the
Board of Directors of the Company;
(vii) securities
issued or issuable in connection with sponsored research, collaboration,
technology license, development, marketing or other similar agreements or
strategic partnerships approved by the Board of Directors of the
Company;
(viii) securities
issued to suppliers or third-party service providers in connection with the
provision of goods or services pursuant to transactions approved by the Board of
Directors of the Company; and
(ix) any
right, option or warrant to acquire any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections (i)
through (ix) above.
(b) In
the event the Company proposes to undertake an issuance of New Securities, it
shall give each Investor written notice of its intention, describing the type of
New Securities, and their price and the general terms upon which the Company
proposes to issue the same. Each Investor shall have ten (10) days
after any such notice is mailed or delivered to agree to purchase such
Investor’s pro rata share of such New Securities upon the terms specified in the
notice by giving written notice to the Company, and stating therein the quantity
of New Securities to be purchased. If no indication is received by
the Company within this 10-day period, then such Investor be deemed to have
waived the right of first offer hereunder or otherwise deemed to have elected
not to purchase such Investor’s pro rata portion of the New
Securities.
(c) The
right of first offer granted under this Agreement shall expire upon the date
that is eight (8) months following the Closing Date.
7. Miscellaneous.
(a) Waivers and
Amendments. Any provision of this Agreement may be amended,
waived or modified only upon the written consent of the Company and Investors
holding a Majority in Interest.
(b) Governing
Law. This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada, without regard to the conflicts of law
provisions of the State of Nevada or of any other state.
(c) Survival. The
representations, warranties, covenants and agreements made herein shall survive
the execution and delivery of this Agreement.
(d) Successors and
Assigns. Subject to the restrictions on transfer described in
Sections 7(e) and 7(f) below, the rights and
obligations of the Company and the Investors shall be binding upon and benefit
the successors, assigns, heirs, administrators and transferees of the
parties.
(e) Registration, Transfer and
Replacement of the Notes. The Notes issuable under this
Agreement shall be registered notes. The Company will keep, at its
principal executive office, books for the registration and registration of
transfer of the Notes. Prior to presentation of any Note for
registration of transfer, the Company shall treat the Person in whose name such
Note is registered as the owner and holder of such Note for all purposes
whatsoever, whether or not such Note shall be overdue, and the Company shall not
be affected by notice to the contrary. Subject to any restrictions on
or conditions to transfer set forth in any Note, the holder of any Note, at its
option, may in person or by duly authorized attorney surrender the same for
exchange at the Company’s chief executive office, and promptly thereafter and at
the Company’s expense, except as provided below, receive in exchange therefor
one or more new Note(s), each in the principal requested by such holder, dated
the date to which interest shall have been paid on the Note so surrendered or,
if no interest shall have yet been so paid, dated the date of the Note so
surrendered and registered in the name of such Person or Persons as shall have
been designated in writing by such holder or its attorney for the same principal
amount as the then unpaid principal amount of the Note so
surrendered. Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note and (a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it; or (b) in the case of mutilation, upon
surrender thereof, the Company, at its expense, will execute and deliver in lieu
thereof a new Note executed in the same manner as the Note being replaced, in
the same principal amount as the unpaid principal amount of such Note and dated
the date to which interest shall have been paid on such Note or, if no interest
shall have yet been so paid, dated the date of such Note.
(f) Assignment by the
Company. The rights, interests or obligations hereunder may
not be assigned, by operation of law or otherwise, in whole or in part, by the
Company without the prior written consent of Investors holding a Majority in
Interest.
(g) Entire
Agreement. This Agreement together with the other Transaction
Documents constitute and contain the entire agreement among the Company and
Investors and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the parties, whether
written or oral, respecting the subject matter hereof.
(h) Notices. All
notices, requests, demands, consents, instructions or other communications
required or permitted hereunder shall in writing and faxed, mailed or delivered
to each party as follows: (i) if to a Investor, at such Investor’s address or
facsimile number set forth in the Investors Details attached as Schedule I, or at such other
address as such Investor shall have furnished the Company in writing, or (ii) if
to the Company, at 306 East St. Joseph Street, Suite 200, Rapid City, South
Dakota 57701, or at such other address or facsimile number as the Company shall
have furnished to the Investors in writing. All such notices and
communications will be deemed effectively given the earlier of (i) when
received, (ii) when delivered personally, (iii) one business day after being
delivered by facsimile (with receipt of appropriate confirmation), (iv) one
business day after being deposited with an overnight courier service of
recognized standing or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid.
(i) Separability of Agreements;
Severability of this Agreement. The Company’s agreement with
each of the Investors is a separate agreement and the sale of the Notes to each
of the Investors is a separate sale. Unless otherwise expressly
provided herein, the rights of each Investor hereunder are several rights, not
rights jointly held with any of the other Investors. Any invalidity,
illegality or limitation on the enforceability of the Agreement or any part
thereof, by any Investor whether arising by reason of the law of the respective
Investor’s domicile or otherwise, shall in no way affect or impair the validity,
legality or enforceability of this Agreement with respect to other
Investors. If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(j) Expenses. The
Investors and the Company shall each bear their own legal and other expenses
with respect to the transactions contemplated by this Agreement.
(k) Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
agreement. Facsimile copies of signed signature pages will be deemed
binding originals.
[Signature
Page Follows]
The
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the date and year first written
above.
COMPANY:
KL
ENERGY CORP.
a Nevada
corporation
|
By:
|
/s/
Peter Gross
|
Peter
Gross
President
and Chief Executive Officer
INVESTOR:
Name: Warcoing
Sucre SA
Signature: /s/ P. de
Boeck
If
Company or Partnership:
|
Name:
|
Mr.
P. de Boeck
|
|
Title:
|
Adminstrateur
Delegue
|
[Signature
page for Note and Warrant Purchase Agreement]
The parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date and year first written above.
COMPANY:
KL ENERGY
CORP.
a
Nevada corporation
|
By:
|
/s/
Peter Gross
|
President and Chief Executive
Officer
INVESTOR:
Name: GDS
Consult SA
Signature:
/s/ Gregoire
de Spoelberch
If
Company or Partnership:
|
Name:
|
|
|
Title:
|
|
[Signature page for Note and Warrant Purchase
Agreement]
The
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the date and year first written
above.
COMPANY:
KL
ENERGY CORP.
a Nevada
corporation
|
By:
|
/s/
Peter Gross
|
Peter
Gross
President
and Chief Executive Officer
INVESTOR:
|
Name:
|
Deutsche
Bank Nominees (Jersey) Limited -
348517
|
|
Signature:
|
/s/ Lucy Attfield |
If
Company or Partnership:
|
Name:
|
|
Title:
|
-2-
The
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the date and year first written
above.
COMPANY:
KL
ENERGY CORP.
a Nevada
corporation
|
By:
|
/s/
Peter Gross
|
Peter
Gross
President
and Chief Executive Officer
INVESTOR:
|
Name:
|
Elaine
Beardsley
|
|
Signature:
|
/s/
Elaine
Beardsley
|
If
Company or Partnership:
|
Name:
|
|
|
Title:
|
|
-3-
The
parties have caused this Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the date and year first written
above.
COMPANY:
KL
ENERGY CORP.
a Nevada
corporation
|
By:
|
/s/
Peter Gross
|
Peter
Gross
President
and Chief Executive Officer
INVESTOR:
|
Name:
|
add
blue Consultoria
Ltda.
|
|
Signature:
|
/s/ Peter
Gross
|
If
Company or Partnership:
|
Name:
|
Peter
Gross
|
|
Title:
|
Director
|
-4-
SCHEDULE
I
INVESTOR
DETAILS
|
Investor
Name
|
Note
Amount
|
No.
of Warrants
|
||
|
Warcoing
Sucre SA
|
$ 2,700,000
|
As
defined in Section 2(c) of the Common Stock Purchase Warrant attached
herein as Exhibit B.
140%
on Prepayment
170%
on Conversion
|
||
| GDS Consult SA | 700,000 | |||
| Beardsley | 400,000 | |||
|
Deutsche
Bank Nominees (Jersey) Limited
|
380,000
|
|||
|
add
blue Consultoria Ltda.
|
200,000
|
|||
|
Other
investors
|
300,000
|
|||
|
$ 4,680,000
|
| Funds should be wired to: | |
| Bank: | ******** |
| Bank Address: | ******** |
| Bank Tel: | ******** |
| ABA/Routing: | ******** |
| Swift: | ******** |
| Beneficiary: | Greenberg Traurig, LLP |
| Account Number: | ******** |
| Client: | KL Energy Corporation |
| Reference: | ******** |
| Attorney: | Raymond Lee |
|
(1)
|
All
payments on account of the Notes shall be
made
by bank wire transfer of immediately
available
funds
to:
|
[Bank name]
[City, State]
Swift Code:
__________________
Account No.: _______________
Account Holder: _____________
Reference:
2) Address for all
notices:
[Investor 1 name]
________________________
________________________
Attn: ___________________
Tel.:( )
___-____
Fax:( )
___-____
I-1
Exhibit
A
FORM
OF SECURED CONVERTIBLE PROMISSORY NOTE
(See
Exhibit 10.2)
Exhibit
B
FORM
OF COMMON STOCK PURCHASE WARRANT
(See
Exhibit 10.3)
Exhibit
C
FORM
OF SECURITY AGREEMENT
(See
Exhibit 10.3)