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Exhibit 4.1
AMENDMENT AND LIMITED WAIVER
THIS AMENDMENT AND LIMITED WAIVER (this "Amendment"), dated as of
October 10,
2008 (the "Amendment Date"), is made
BY AND BETWEEN:
PALA INVESTMENTS HOLDINGS LIMITED, of 12 Castle Street, St
Helier,
Jersey, JE2 3RT (the "Lender");
AND:
ALDEROX, INC. (formerly known as Reclamation Consulting and
Applications, Inc.), a company organized under the laws of the
State of
Colorado, of 940 Calle Amanecer, Suite E, San Clemente, CA 92673
(the
"Borrower").
WHEREAS, the Lender and the Borrower are parties to a Secured
Convertible
Debenture, dated as of December 12, 2007 (the "Original
Debenture"), pursuant to
which the Lender loaned the Borrower Three Million Dollars
($3,000,000) and,
under the terms and subject to the conditions set forth therein,
provided for
the potential further loan of Two Million Dollars ($2,000,000);
WHEREAS, pursuant to an Omnibus Amendment, dated as of March 28,
2008 (the
"First Omnibus Amendment"), the Lender loaned the Borrower an
additional Two and
One-half Million Dollars ($2,500,000);
WHEREAS, pursuant to a Second Omnibus Amendment, dated as of August
1, 2008 (the
"Second Omnibus Amendment"), the Lender loaned the Borrower an
additional Seven
Hundred Thousand Dollars ($700,000) and, under the terms and
subject to the
conditions set forth therein, provided for the potential further
loan of Three
Hundred Thousand Dollars ($300,000) (the Original Debenture, as
amended by such
First Omnibus Amendment and Second Omnibus Amendment, the
"Debenture");
WHEREAS, the Borrower has notified the Lender of certain breaches
of the
Debenture arising out of the Borrower's failure to file federal and
state tax
returns as required by law and the Borrower's alleged insolvency
(which the
Borrower disputes) and has requested that the Lender waive any
defaults arising
therefrom; and
WHEREAS, the Lender is willing to waive any such defaults, subject
to the terms
and conditions set forth in this Amendment.
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of
the premises
and the mutual covenants and agreements hereinafter set forth, the
parties
hereto agree as follows:
AMENDMENT
AND LIMITED WAIVER
October 10, 2008
Page 1 of 10
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1.
DEFINITIONS
Unless a definition is provided for a capitalized term in this
Amendment, each
such term shall have the meaning provided to it in the
Debenture.
2.
INTERPRETATION
The provisions of Section 2 of the Debenture shall apply to this
Amendment as if
set forth herein, in each case with references to "this Agreement"
being
replaced with "this Amendment."
3. THE
AMENDMENTS
3.1 AMENDMENTS
TO THE DEBENTURE
The follow amendment is hereby made to the Debenture:
3.1.1 The
term "Conversion Price" is amended in its
entirety to provide as follows:
""Conversion Price" means, with respect to the
Principal amount of the First Tranche, Second
Tranche, Third Tranche, Fourth Tranche and Fifth
Tranche, $0.057 per share, provided that if Borrower,
at any time while the Principal is outstanding, (i)
pays a stock dividend on its common stock, (ii)
subdivides outstanding shares of common stock into a
larger number of shares, or (iii) combines
outstanding shares of common stock into a smaller
number of shares, then in each such case the
applicable Conversion Price shall be adjusted by
multiplying (a) such Conversion Price in effect
immediately prior to such event, by (b) a fraction of
which the numerator shall be the number of shares of
common stock outstanding immediately before such
event and of which the denominator shall be the
number of shares of common stock outstanding
immediately after such event;"
3.2 LIMITED
AMENDMENT
Any future reference to the Debenture and any document or
instrument delivered
in connection therewith shall, from and after the date of this
Amendment, be
deemed to be a reference to the Debenture as modified by this
Amendment. Except
as expressly modified by this Amendment, the Debenture shall
continue to be and
remain in full force and effect in accordance with its terms and
the Borrower
hereby reaffirms its obligations under each of the Debenture
Agreements.
AMENDMENT AND LIMITED WAIVER
October 10, 2008
Page 2 of 10
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4.
REPRESENTATIONS AND WARRANTIES
4.1
REPRESENTATIONS OF THE BORROWER
The Borrower hereby represents and warrants to the Lender that,
except as
provided on Annex A hereto, each of the representations and
warranties set forth
in Section 5.1 of the Debenture and in Section 3 of the Patent and
Trademark
Security Agreement are true and correct as of the Amendment Date,
in each case
with references to "this Agreement" referring to the Debenture as
amended by
this Amendment.
5.
LIMITED WAIVER
The Lender hereby waives any remedies it may have under the
Debenture arising
out of the Borrower's failure to file its federal and state tax
returns as
required by law prior to the Amendment Date and any insolvency of
the Borrower
prior to the Amendment Date. For the avoidance of doubt, any future
state of
insolvency shall be a grounds for a separate Event of Default,
which is not
waived hereby; provided, however, that the Lender agrees not to
assert any
remedies it may have under the Debenture or the other Debenture
Agreements
relating to an Event of Default resulting from the Borrower's being
or becoming
insolvent prior to the date 30 days from the date of this Amendment
(it being
understood that the Lender reserves all of its rights with respect
to the other
events referred to as Events of Default in Section 7.1.5 of the
Debenture during
such period).
6.
OTHER AGREEMENTS; GENERAL
6.1
COUNTERPART AND FAX EXECUTION
This Amendment may be executed in two or more counterparts and by
fax
transmission, each of which will be deemed to be an original and
all of which
will constitute one agreement, effective as of the date given
above.
6.2 GOVERNING
LAW
The Debenture shall be governed by the law of the State of
California, without
regard to applicable principles of conflicts of laws thereof.
6.3 COSTS AND
EXPENSES
The Borrower agrees to pay all reasonable costs and expenses of the
Lender
(including legal fees) on demand relating to the amendment or
supplement of the
Lender's security filings and/or any such additional filings in
respect of the
Collateral necessary to reflect the Borrower's current legal name
and to
otherwise perfect and insure the continuous perfection and priority
of the
Lender's security interest therein granted under the Debenture in a
manner
AMENDMENT AND LIMITED WAIVER
October 10, 2008
Page 3 of 10
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reasonably satisfactory to the Lender. For the avoidance of doubt,
a breach of
the covenants contained in this section shall constitute an Event
of Default
under the Debenture.
6.4 LIMITATION
ON SHARES DELIVERABLE
For any conversion of the Loans or exercise of the Warrants prior
to the earlier
of (i) March 31, 2009 and (ii) the Share Increase Date (as defined
below), the
number of shares of the Borrower's common stock receivable upon
such conversion
or exercise shall not exceed 112,227,673 shares in the aggregate.
The Borrower
agrees to use its best efforts to have its authorized share capital
increased
(the "Share Increase") such that it is able to fully comply with
the covenants
set forth in Section 6.1.18 and Section 6.1.19 of the Debenture
(without regard
to the cap set forth in th






