Exhibit 4.4
STOCK PURCHASE AND PUT RIGHT
RELEASE AGREEMENT
THIS STOCK PURCHASE AND PUT RIGHT
RELEASE AGREEMENT (this
“ Agreement ”) is made as of this ♦
day of January, 2009, by and between Timberline Resources
Corporation (“ Timberline ”), a Delaware
corporation, and Auramet Trading, LLC (“
Auramet ”), a Delaware limited liability
company (“ Auramet ”).
RECITALS
WHEREAS, Auramet provided Timberline $8.0
million (the “ Loan ”) pursuant to the
terms of a term sheet (the “ Term Sheet
”), dated June 24 2008, by an between Timberline and Auramet
and the terms of a promissory note (the “ Promissory
Note ”), dated June 27, 2008, by and between
Timberline and Auramet; and
WHEREAS, pursuant to the Term Sheet,
Timberline paid Auramet a fee equal to 4% of the principal amount
of the Loan and issued to Auramet 160,000 shares of Timberline
common stock (the “ Fee Shares ”);
and
WHEREAS, pursuant to the section of the
Term Sheet entitled “Closing Fee to Lender”, Auramet
was granted a put right (the “ Put Right
”) of $2.00 on the Fee Shares, entitling Auramet to payment
of $320,000 (the “ Put Value ”) from
Timberline upon notice of exercise of the Put Right to Timberline;
and
WHEREAS, Auramet submitted a notice of
exercise of its Put Right to Timberline on January 9, 2009;
and
WHEREAS, Timberline and Auramet now
desire that the Put Right be satisfied by issuance of shares of
common stock of Timberline, par value $0.001 (“ Common
Shares ”).
AGREEMENT
NOW, THEREFORE, in consideration of the
foregoing and the promises and covenants contained herein, the
sufficiency of which is hereby acknowledged, all parties hereto
agree as follows:
A.
PURCHASE OF SHARES
1.
The Shares . Subject to the satisfaction of the terms and
conditions set forth in this Agreement, Timberline agrees to issue
535,652 Common Shares (“ Put Shares ”) to
Auramet in exchange for Auramet’s release of payment in cash
of the Put Value (the “ Purchase Price ”)
and Auramet agrees to accept such Put Shares from Timberline and
when combined with the value of the Fee Shares as satisfaction, in
full, of the Put Value in lieu of payment in cash. Both
parties agree that: (i) each Common Share is to be valued at $0.46
per Common Share (“ Share Value ”), which
is the 30-trading day average of the Common Shares from December
11, 2008 through January 22, 2009, (ii) based on the Share Value,
the Fee Shares to be retained by Auramet are
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valued at $73,600, (iii) the remaining
Put Value to be satisfied by issuance of Common Shares is $246,400,
and (iv) that the Put Shares to be issued pursuant to this
Agreement are to be valued at $246,400.
2.
Payment of Purchase Price
. The payment of Purchase Price
shall be deemed to be delivered to Timberline upon execution by
Auramet of this Agreement.
3.
Issuance of Shares
. Timberline shall deliver the
stock certificate(s) representing the Shares, registered and
delivered as set forth on Exhibit A attached hereto,
free and clear from any restrictions on transfer, except those
restrictions on transfer described in Section (B)(4) hereof, upon
the later of: (i) three (3) business days following the execution
of this Agreement by both parties or (ii) three (3) business days
following the approval of the issuance of the Put Shares by the
NYSE Alternext U.S. LLC (“ NYSE Alternext
”).
B.
REPRESENTATIONS AND WARRANTIES OF
AURAMET
Auramet represents, warrants and
covenants (and acknowledges that Timberline is relying on such
representations, warranties and covenants) that, as of the date of
this Purchase Agreement and at the Closing Date:
1.
Auramet understands that the put shares
have not been registered under the U.S. Securities Act of 1933, as
amended (the “U.S. Securities Act”) or any applicable
state securities laws and may not be offered or sold absent such
registration or an available exemption from such registration
requirements and the put shares have not been approved or
disapproved by the United States Securities and Exchange Commission
or any state securities agency. Auramet understands and
agrees that the put shares are being offered and sold to Auramet in
reliance upon the exemption provided under Rule 506 of Regulation D
and/or section 4(2) under the U.S. Securities Act;
2.
Auramet is not an underwriter and Auramet
acquired the Put Shares solely for investment purposes for its own
account and not with a view to, or for, resale in connection with
any distribution of securities within the meaning of the U.S.
Securities Act; and the Put Shares are not being purchased with a
view to or for the resale, distribution, subdivision or
fractionalization thereof; and the undersigned has no contract,
undertaking, understanding, agreement, or arrangement, formal or
informal, with any person to sell, transfer, or pledge to any
person the securities for which it hereby subscribes, or any part
thereof; and it understands that the legal consequences of the
foregoing representations and warranties to mean that it must bear
the economic risk of the investment for an indefinite period of
time because the Put Shares have not been registered under the U.S.
Securities Act, and, therefore, may be resold only if registered
under the U.S. Securities Act or if an exemption from such
registration is available;
3.
Auramet is an “accredited
investor” that satisfies one or more of the criteria set
forth in Rule 501(a) of Regulation D of the U.S. Securities
Act;
4.
Auramet understands that, except as
provided in Section E hereof, Timberline is under no obligation to
register the Put Shares or seek an exemption under the U.S.
Securities Act or any applicable state laws for the Put Shares, or
to cause or permit the Put Shares to be
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transferred in the absence of any such
registration or exemption, and understands that Auramet must hold
the Put Shares indefinitely unless the Put Shares are subsequently
registered under U.S. Securities Act and applicable state
securities laws or an exemption from registration is
available;
6.
Auramet has not purchased the Put Shares
as a result of any form of general solicitation or general
advertising (as such terms are used in Rule 502 (c) under
Regulation D of the U.S. Securities Act);
7.
Auramet acknowledges that the Put Shares
are “restricted securities,” as such term is defined
under Rule 144 of the U.S. Securities Act, and may not be offered,
sold, transferred, pledged, or hypothecated to any person in the
absence of registration under the U.S. Securities Act or an opinion
of counsel satisfactory to Timberline that registration is not
required. Without limiting the generality or application of
any other covenants, representations, warranties and
acknowledgements of Auramet respecting resale of the Put Shares,
Auramet will not offer, sell or otherwise transfer any of such Put
Shares directly or indirectly, unless in accordance with the
following legend, which Auramet acknowledges the certificates
representing the Put Shares delivered pursuant to this Purchase
Agreement shall bear:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “U.S. SECURITIES ACT”). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) TO TIMBERLINE, (B) UNLESS THE SECURITIES HAVE BEEN
REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER
THE 1933 ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 OR
RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES
NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY
APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE
OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO
TIMBERLINE AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OR OTHER
EVIDENCE OF
