Document:

subsurface_s8-ex0400.htm

     

    EXHIBIT
      4.0

    

    SUB
      SURFACE WASTE MANAGEMENT OF DELAWARE, INC.

    

    2007-V
      EMPLOYEE STOCK INCENTIVE PLAN

    

    As
      Adopted October 3, 2007

    

    

    
      	
              1.

            	
              PURPOSE.

            

    

    

    The
      purpose of this Plan is to provide incentives to attract, retain and motivate
      eligible persons whose present and potential contributions are important to
      the
      success of the Company, its Parent and Subsidiaries, by offering them an
      opportunity to participate in the Company’s future performance through awards of
      Options, Restricted Stock and Stock Bonuses.  Capitalized terms not
      defined in the text are defined in Section 2.

    

    
      	
              2.

            	
              DEFINITIONS.

            

    

    

    As
      used
      in this Plan, the following terms will have the following meanings:

    

    “AWARD”
      means any award under this Plan, including any Option, Restricted Stock or
      Stock
      Bonus.

    

    “AWARD
      AGREEMENT” means, with respect to each Award, the signed written agreement
      between the Company and the Participant setting forth the terms and conditions
      of the Award.

    

    “BOARD”
      means the Board of Directors of the Company.

    

    “CAUSE”
      means any cause, as defined by applicable law, for the termination of a
      Participant’s employment with the Company or a Parent or Subsidiary of the
      Company.

    

    “CODE”
      means the Internal Revenue Code of 1986, as amended.

    

    “COMPANY”
      means Sub Surface Waste Management of Delaware, Inc., a Delaware corporation,
      or
      any successor corporation.

    

    “DISABILITY”
      means a disability, whether temporary or permanent, partial or total, as
      determined by the Board.

    

    “EXCHANGE
      ACT” means the Securities Exchange Act of 1934, as amended.

    

    “EXERCISE
      PRICE” means the price at which a holder of an Option may purchase the
      Shares issuable upon exercise of the Option.

    

    “FAIR
      MARKET VALUE” means, as of any date, the value of a share of the Company’s
      Common Stock determined as follows:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               

            	
              (a)

            	
              if
                such Common Stock is publicly traded and is then listed on a national
                securities exchange, its closing price on the date of determination
                on the
                principal national securities exchange on which the Common Stock
                is listed
                or admitted to trading as reported in The Wall Street
                Journal;

            

    

    

    
      	
               

            	
              (b)

            	
              if
                such Common Stock is quoted on the NASDAQ National Market, its closing
                price on the NASDAQ National Market on the date of determination
                as
                reported in The Wall Street
                Journal;

            

    

    

    
      	
               

            	
              (c)

            	
              if
                such Common Stock is publicly traded but is not listed or admitted
                to
                trading on a national securities exchange, the average of the closing
                bid
                and asked prices on the date of determination as reported by Bloomberg,
                L.P.;

            

    

    

    
      	
               

            	
              (d)

            	
              in
                the case of an Award made on the Effective Date, the price per share
                at
                which shares of the Company’s Common Stock are initially offered for sale
                to the public by the Company’s underwriters in the initial public offering
                of the Company’s Common Stock pursuant to a registration statement filed
                with the SEC under the Securities Act;
                or

            

    

    

    
      	
               

            	
              (e)

            	
              if
                none of the foregoing is applicable, by the Board in good
                faith.

            

    

    

    “INSIDER”
      means an officer or director of the Company or any other person whose
      transactions in the Company’s Common Stock are subject to Section 16 of the
      Exchange Act.

    

    “OPTION”
      means an award of an option to purchase Shares pursuant to Section
      6.

    

    “PARENT”
      means any corporation (other than the Company) in an unbroken chain of
      corporations ending with the Company if each of such corporations other than
      the
      Company owns stock possessing 50% or more of the total combined voting power
      of
      all classes of stock in one of the other corporations in such
      chain.

    

    “PARTICIPANT”
      means a person who receives an Award under this Plan.

    

    “PERFORMANCE
      FACTORS” means the factors selected by the Board, in its sole and absolute
      discretion, from among the following measures to determine whether the
      performance goals applicable to Awards have been satisfied:

    

    
      	
               

            	
              (a)

            	
              Net
                revenue and/or net revenue growth;

            

    

    

    
      	
               

            	
              (b)

            	
              Earnings
                before income taxes and amortization and/or earnings before income
                taxes
                and amortization growth;

            

    

    

    
      	
               

            	
              (c)

            	
              Operating
                income and/or operating income
                growth;

            

    

    

    
      	
               

            	
              (d)

            	
              Net
                income and/or net income growth;

            

    

    

    
      	
               

            	
              (e)

            	
              Earnings
                per share and/or earnings per share
                growth;

            

    

    

    
      	
               

            	
              (f)

            	
              Total
                stockholder return and/or total stockholder return
                growth;

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (g)

            	
              Return
                on equity;

            

    

    

    
      	
               

            	
              (h)

            	
              Operating
                cash flow return on income;

            

    

    

    
      	
               

            	
              (i)

            	
              Adjusted
                operating cash flow return on
                income;

            

    

    

    
      	
               

            	
              (j)

            	
              Economic
                value added; and

            

    

    

    
      	
               

            	
              (k)

            	
              Individual
                confidential business objectives.

            

    

    

    “PERFORMANCE
      PERIOD” means the period of service determined by the Board, not to exceed
      five years, during which years of service or performance is to be measured
      for
      Restricted Stock Awards or Stock Bonuses.

    

    “PLAN”
      means this Sub Surface Waste Management of Delaware, Inc. 2007-V Employee Stock
      Incentive Plan, as amended from time to time.

    

    “RESTRICTED
      STOCK AWARD” means an award of Shares pursuant to Section 7.

    

    “SEC”
      means the Securities and Exchange Commission.

    

    “SECURITIES
      ACT” means the Securities Act of 1933, as amended.

    

    “SHARES”
      means shares of the Company’s Common Stock reserved for issuance under this
      Plan, as adjusted pursuant to Sections 3 and 19, and any successor
      security.

    

    “STOCK
      BONUS” means an award of Shares, or cash in lieu of Shares, pursuant to
      Section 8.

    

    “SUBSIDIARY”
      means any corporation (other than the Company) in an unbroken chain of
      corporations beginning with the Company if each of the corporations other than
      the last corporation in the unbroken chain owns stock possessing 50% or more
      of
      the total combined voting power of all classes of stock in one of the other
      corporations in such chain.

    

    “TERMINATION”
      or “TERMINATED” means, for purposes of this Plan with respect to a
      Participant, that the Participant has for any reason ceased to provide services
      as an employee, officer, director, consultant, independent contractor, or
      advisor to the Company or a Parent or Subsidiary of the Company. An employee
      will not be deemed to have ceased to provide services in the case of (i) sick
      leave, (ii) military leave, or (iii) any other leave of absence approved by
      the
      Company, provided that such leave is for a period of not more than 90 days,
      unless reemployment upon the expiration of such leave is guaranteed by contract
      or statute or unless provided otherwise pursuant to a formal policy adopted
      from
      time to time by the Company and issued and promulgated to employees in
      writing.  In the case of any employee on an approved leave of absence,
      the Board may make such provisions respecting suspension of vesting of the
      Award
      while on leave from the employ of the Company or a Subsidiary as it may deem
      appropriate, except that in no event may an Option be exercised after the
      expiration of the term set forth in the Option agreement. The Board will have
      sole discretion to determine whether a Participant has ceased to provide
      services and the effective date on which the Participant ceased to provide
      services (the “TERMINATION DATE”).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “UNVESTED
      SHARES” means “Unvested Shares” as defined in the Award
      Agreement.

    

    “VESTED
      SHARES” means “Vested Shares” as defined in the Award
      Agreement.

    

    
      	
              3.

            	
              SHARES
                SUBJECT TO
                THE PLAN.

            

    

    

    3.1           Number
      of Shares Available.  Subject to Sections 3.2 and 19, the total
      aggregate number of Shares reserved and available for grant and issuance
      pursuant to this Plan will be 60,000,000 plus Shares that are subject to: (a)
      issuance upon exercise of an Option but cease to be subject to such Option
      for
      any reason other than exercise of such Option; (b) an Award granted hereunder
      but forfeited or repurchased by the Company at the original issue price; and
      (c)
      an Award that otherwise terminates without Shares being issued.  At
      all times the Company shall reserve and keep available a sufficient number
      of
      Shares as shall be required to satisfy the requirements of all outstanding
      Options granted under this Plan and all other outstanding but unvested Awards
      granted under this Plan.

    

    3.2           Adjustment
      of Shares.  In the event that the number of outstanding shares is
      changed by a stock dividend, recapitalization, stock split, reverse stock split,
      subdivision, combination, reclassification or similar change in the capital
      structure of the Company without consideration, then (a) the number of Shares
      reserved for issuance under this Plan, (b) the Exercise Prices of and number
      of
      Shares subject to outstanding Options, and (c) the number of Shares subject
      to
      other outstanding Awards will be proportionately adjusted, subject to any
      required action by the Board or the stockholders of the Company and compliance
      with applicable securities laws; provided, however, that fractions of a Share
      will not be issued but will either be replaced by a cash payment equal to the
      Fair Market Value of such fraction of a Share or will be rounded up to the
      nearest whole Share, as determined by the Board.

    

    
      	
              4.

            	
              ELIGIBILITY.

            

    

    

     ISOs
      (as defined in Section 6 below) may be granted only to employees (including
      officers and directors who are also employees) of the Company or of a Parent
      or
      Subsidiary of the Company.  All other Awards may be granted to
      employees, officers, directors, consultants, independent contractors and
      advisors of the Company or any Parent or Subsidiary of the Company; provided
      such consultants, contractors and advisors render bona fide services not in
      connection with the offer and sale of securities in a capital-raising
      transaction.

    

    
      	
              5.

            	
              ADMINISTRATION.

            

    

    

    5.1           Board
      Authority.  This Plan will be administered by the
      Board.  Subject to the general purposes, terms and conditions of this
      Plan, the Board will have full power to implement and carry out this Plan.
      Without limitation, the Board will have the authority to:

    

    
      	
               

            	
              (a)

            	
              construe
                and interpret this Plan, any Award Agreement and any other agreement
                or
                document executed pursuant to this
                Plan;

            

    

    

    
      	
               

            	
              (b)

            	
              prescribe,
                amend and rescind rules and regulations relating to this Plan or
                any
                Award;

            

    

    

    
      	
               

            	
              (c)

            	
              select
                persons to receive Awards;

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	
              (d)

            	
              determine
                the form and terms of Awards;

            

    

    

    
      	
               

            	
              (e)

            	
              determine
                the number of Shares or other consideration subject to
                Awards;

            

    

    

    
      	
               

            	
              (f)

            	
              determine
                whether Awards will be granted singly, in combination with, in tandem
                with, in replacement of, or as alternatives to, other Awards under
                this
                Plan or any other incentive or compensation plan of the Company or
                any
                Parent or Subsidiary of the
                Company;

            

    

    

    
      	
               

            	
              (g)

            	
              grant
                waivers of Plan or Award
                conditions;

            

    

    

    
      	
               

            	
              (h)

            	
              determine
                the vesting, ability to exercise and payment of
                Awards;

            

    

    

    
      	
               

            	
              (i)

            	
              correct
                any defect, supply any omission or reconcile any inconsistency in
                this
                Plan, any Award or any Award
                Agreement;

            

    

    

    
      	
               

            	
              (j)

            	
              determine
                whether an Award has been earned;
                and

            

    

    

    
      	
               

            	
              (k)

            	
              make
                all other determinations necessary or advisable for the administration
                of
                this Plan.

            

    

    

    5.2           Board
      Discretion.  Any determination made by the Board with respect to
      any Award will be made at the time of grant of the Award or, unless in
      contravention of any express term of this Plan or Award, at any later time,
      and
      such determination will be final and binding on the Company and on all persons
      having an interest in any Award under this Plan.  The Board may
      delegate to one or more officers of the Company the authority to grant an Award
      under this Plan to Participants who are not Insiders of the
      Company.

    

    
      	
              6.

            	
              OPTIONS.

            

    

    

     The
      Board may grant
      Options to eligible persons and will determine whether such Options will be
      Incentive Stock Options within the meaning of the Code (“ISO”) or Nonqualified
      Stock Options (“NQSOS”), the number of Shares subject to the Option, the
      Exercise Price of the Option, the period during which the Option may be
      exercised, and all other terms and conditions of the Option, subject to the
      following:

    

    6.1           Form
      of Option Grant.  Each Option granted under this Plan will be
      evidenced by an Award Agreement that will expressly identify the Option as
      an
      ISO or an NQSO (hereinafter referred to as the “STOCK OPTION AGREEMENT”), and
      will be in such form and contain such provisions (which need not be the same
      for
      each Participant) as the Board may from time to time approve, and which will
      comply with and be subject to the terms and conditions of this
      Plan.

    

    6.2           Date
      of Grant.  The date of grant of an Option will be the date on
      which the Board makes the determination to grant such Option, unless otherwise
      specified by the Board.  The Stock Option Agreement and a copy of this
      Plan will be delivered to the Participant within a reasonable time after the
      granting of the Option.

    

    6.3           Exercise
      Period. Options may be exercisable within the times or upon the events
      determined by the Board as set forth in the Stock Option Agreement governing
      such Option; provided, however, that no Option will be exercisable after the
      expiration of ten (10) years from the date the Option is granted; and provided
      further that no ISO granted to a person who directly or by attribution owns
      more
      than ten percent (10%) of the total combined voting power of all classes of
      stock of the Company or of any Parent or Subsidiary of the Company (“TEN PERCENT
      STOCKHOLDER”) will be exercisable after the expiration of five (5) years from
      the date the ISO is granted.  The Board also may provide for Options
      to become exercisable at one time or from time to time, periodically or
      otherwise, in such number of Shares or percentage of Shares as the Board
      determines.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.4           Exercise
      Price.  The Exercise Price of an Option will be determined by the
      Board when the Option is granted and may be not less than 85% of the Fair Market
      Value of the Shares on the date of grant; provided that:  (a) the
      Exercise Price of an ISO will be not less than 100% of the Fair Market Value
      of
      the Shares on the date of grant; and (b) the Exercise Price of any ISO granted
      to a 10% Stockholder will not be less than 110% of the Fair Market Value of
      the
      Shares on the date of grant.  Payment for the Shares purchased may be
      made in accordance with Section 9 of this Plan.

    

    6.5           Method
      of Exercise.  Options may be exercised only by delivery to the
      Company of a written stock option exercise agreement  (the “EXERCISE
      AGREEMENT”) in a form approved by the Board, (which need not be the same for
      each Participant), stating the number of Shares being purchased, the
      restrictions imposed on the Shares purchased under such Exercise Agreement,
      if
      any, and such representations and agreements regarding Participant’s investment
      intent and access to information and other matters, if any, as may be required
      or desirable by the Company to comply with applicable securities laws, together
      with payment in full of the Exercise Price for the number of Shares being
      purchased.

    

    6.6           Termination.  Notwithstanding
      the exercise periods set forth in the Stock Option Agreement, exercise of an
      Option will always be subject to the following:

    

    (a)          If
      the Participant’s service is Terminated for any reason except death or
      Disability, then the Participant may exercise such Participant’s Options only to
      the extent that such Options would have been exercisable upon the Termination
      Date no later than three (3) months after the Termination Date (or such shorter
      or longer time period not exceeding five (5) years as may be determined by
      the
      Board, with any exercise beyond three (3) months after the Termination Date
      deemed to be an NQSO), but in any event, no later than the expiration date
      of
      the Options.

    

    (b)          If
      the Participant’s service is Terminated because of Participant’s death or
      Disability (or the Participant dies within three (3) months after a Termination
      other than for Cause or because of Participant’s Disability), then Participant’s
      Options may be exercised only to the extent that such Options would have been
      exercisable by Participant on the Termination Date and must be exercised by
      Participant (or Participant’s legal representative or authorized assignee) no
      later than twelve (12) months after the Termination Date (or such shorter or
      longer time period not exceeding five (5) years as may be determined by the
      Board, with any such exercise beyond (i) three (3) months after the Termination
      Date when the Termination is for any reason other than the Participant’s death
      or Disability, or (ii) twelve (12) months after the Termination Date when the
      Termination is for Participant’s death or Disability, deemed to be an NQSO), but
      in any event no later than the expiration date of the Options.

    

    (c)           Notwithstanding
      the provisions in paragraph 6.6(a) above, if a Participant’s service is
      Terminated for Cause, neither the Participant, the Participant’s estate nor such
      other person who may then hold the Option shall be entitled to exercise any
      Option with respect to any Shares whatsoever, after Termination, whether or
      not
      after Termination the Participant may receive payment from the Company or
      Subsidiary for vacation pay, for services rendered prior to Termination, for
      services rendered for the day on which Termination occurs, for salary in lieu
      of
      notice, or for any other benefits.  For the purpose of this paragraph,
      Termination shall be deemed to occur on the date when the Company dispatches
      notice or advice to the Participant that his service is Terminated.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.7           Limitations
      on Exercise.  The Board may specify a reasonable minimum number of
      Shares that may be purchased on any exercise of an Option, provided that such
      minimum number will not prevent Participant from exercising the Option for
      the
      full number of Shares for which it is then exercisable.

    

    6.8           Limitations
      on ISO.  The aggregate Fair Market Value (determined as of the
      date of grant) of Shares with respect to which ISO are exercisable for the
      first
      time by a Participant during any calendar year (under this Plan or under any
      other incentive stock option plan of the Company, Parent or Subsidiary of the
      Company) will not exceed $100,000.  If the Fair Market Value of Shares
      on the date of grant with respect to which ISO are exercisable for the first
      time by a Participant during any calendar year exceeds $100,000, then the
      Options for the first $100,000 worth of Shares to become exercisable in such
      calendar year will be ISO and the Options for the amount in excess of $100,000
      that become exercisable in that calendar year will be NQSOs.  In the
      event that the Code or the regulations promulgated thereunder are amended after
      the Effective Date of this Plan to provide for a different limit on the Fair
      Market Value of Shares permitted to be subject to ISO, such different limit
      will
      be automatically incorporated herein and will apply to any Options granted
      after
      the effective date of such amendment.

    

    6.9           Modification,
      Extension or Renewal.  The Board may modify, extend or renew
      outstanding Options and authorize the grant of new Options in substitution
      therefore, provided that any such action may not, without the written consent
      of
      a Participant, impair any of such Participant’s rights under any Option
      previously granted.  Any outstanding ISO that is modified, extended,
      renewed or otherwise altered will be treated in accordance with Section 424(h)
      of the Code.  The Board may reduce the Exercise Price of outstanding
      Options without the consent of Participants affected by a written notice to
      them; provided, however, that the Exercise Price may not be reduced below the
      minimum Exercise Price that would be permitted under Section 6.4 of this Plan
      for Options granted on the date the action is taken to reduce the Exercise
      Price.

    

    6.10           No
      Disqualification.  Notwithstanding any other provision in this
      Plan, no term of this Plan relating to ISO will be interpreted, amended or
      altered, nor will any discretion or authority granted under this Plan be
      exercised, so as to disqualify this Plan under Section 422 of the Code or,
      without the consent of the Participant affected, to disqualify any ISO under
      Section 422 of the Code.

    

    
      	
              7.

            	
              RESTRICTED
                STOCK.

            

    

    

    A
      Restricted Stock Award is an offer by the Company to sell to an eligible person
      Shares that are subject to restrictions.  The Board will determine to
      whom an offer will be made, the number of Shares the person may purchase, the
      price to be paid (the “PURCHASE PRICE”), the restrictions to which the Shares
      will be subject, and all other terms and conditions of the Restricted Stock
      Award, subject to the following:

    

    7.1           Form
      of Restricted Stock Award.  All purchases under a Restricted Stock
      Award made pursuant to this Plan will be evidenced by an Award Agreement (the
      “RESTRICTED STOCK PURCHASE AGREEMENT”) that will be in such form (which need not
      be the same for each Participant) as the Board will from time to time approve,
      and will comply with and be subject to the terms and conditions of this
      Plan.  The offer of Restricted Stock will be accepted by the
      Participant’s execution and delivery of the Restricted Stock Purchase Agreement
      and full payment for the Shares to the Company within thirty (30) days from
      the
      date the Restricted Stock Purchase Agreement is delivered to the person. If
      such
      person does not execute and deliver the Restricted Stock Purchase Agreement
      along with full payment for the Shares to the Company within thirty (30) days,
      then the offer will terminate, unless otherwise extended by the
      Board.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.2           Purchase
      Price.  The Purchase Price of Shares sold pursuant to a Restricted
      Stock Award will be determined by the Board on the date the Restricted Stock
      Award is granted, except in the case of a sale to a Ten Percent Stockholder,
      in
      which case the Purchase Price will be 100% of the Fair Market
      Value.  Payment of the Purchase Price must be made in accordance with
      Section 9 of this Plan.

    

    7.3           Terms
      of Restricted Stock Awards.  Restricted Stock Awards shall be
      subject to such restrictions as the Board may impose.  These
      restrictions may be based upon completion of a specified number of years of
      service with the Company or upon completion of the performance goals as set
      out
      in advance in the Participant’s individual Restricted Stock Purchase Agreement.
      Restricted Stock Awards may vary from Participant to Participant and between
      groups of Participants.  Prior to the grant of a Restricted Stock
      Award, the Board shall:  (a) determine the nature, length and starting
      date of any Performance Period for the Restricted Stock Award; (b) select from
      among the Performance Factors to be used to measure performance goals, if any;
      and (c) determine the number of Shares that may be awarded to the
      Participant.  Prior to the payment of any Restricted Stock Award, the
      Board shall determine the extent to which such Restricted Stock Award has been
      earned.  Performance Periods may overlap and Participants may
      participate simultaneously with respect to Restricted Stock Awards that are
      subject to different Performance Periods and have different performance goals
      and other criteria.

    

    7.4           Termination
      During Performance Period.  If a Participant is Terminated during
      a Performance Period for any reason, then such Participant will be entitled
      to
      payment (whether in Shares, cash or otherwise) with respect to the Restricted
      Stock Award only to the extent earned as of the date of Termination in
      accordance with the Restricted Stock Purchase Agreement, unless the Board
      determines otherwise.

    

    
      	
              8.

            	
              STOCK
                BONUSES.

            

    

    

    8.1           Awards
      of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of
      Restricted Stock) for extraordinary services rendered to the Company or any
      Parent or Subsidiary of the Company.  A Stock Bonus will be awarded
      pursuant to an Award Agreement (the “STOCK BONUS AGREEMENT”) that will be in
      such form (which need not be the same for each Participant) as the Board will
      from time to time approve, and will comply with and be subject to the terms
      and
      conditions of this Plan.  A Stock Bonus may be awarded upon
      satisfaction of such performance goals as are set out in advance in the
      Participant’s individual Award Agreement (the “PERFORMANCE STOCK BONUS
      AGREEMENT”) that will be in such form (which need not be the same for each
      Participant) as the Board will from time to time approve, and will comply with
      and be subject to the terms and conditions of this Plan.  Stock
      Bonuses may vary from Participant to Participant and between groups of
      Participants, and may be based upon the achievement of the Company, Parent
      or
      Subsidiary and/or individual performance factors or upon such other criteria
      as
      the Board may determine.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.2           Terms
      of Stock Bonuses.  The Board will determine the number of Shares
      to be awarded to the Participant.  If the Stock Bonus is being earned
      upon the satisfaction of performance goals pursuant to a Performance Stock
      Bonus
      Agreement, then the Board will: (a) determine the nature, length and starting
      date of any Performance Period for each Stock Bonus; (b) select from among
      the
      Performance Factors to be used to measure the performance, if any; and (c)
      determine the number of Shares that may be awarded to the
      Participant.  Prior to the payment of any Stock Bonus, the Board shall
      determine the extent to which such Stock Bonuses have been
      earned.  Performance Periods may overlap and Participants may
      participate simultaneously with respect to Stock Bonuses that are subject to
      different Performance Periods and different performance goals and other
      criteria.  The number of Shares may be fixed or may vary in accordance
      with such performance goals and criteria as may be determined by the
      Board.  The Board may adjust the performance goals applicable to the
      Stock Bonuses to take into account changes in law and accounting or tax rules
      and to make such adjustments as the Board deems necessary or appropriate to
      reflect the impact of extraordinary or unusual items, events or circumstances
      to
      avoid windfalls or hardships.

    

    8.3           Form
      of Payment.  The earned portion of a Stock Bonus may be paid to
      the Participant by the Company either currently or on a deferred basis, with
      such interest or dividend equivalent, if any, as the Board may
      determine.  Payment may be made in the form of cash or whole Shares or
      a combination thereof, either in a lump sum payment or in installments, all
      as
      the Board will determine.

    

    
      	
              9.

            	
              PAYMENT
                FOR SHARE
                PURCHASES.

            

    

    

    9.1           Payment.  Payment
      for Shares purchased pursuant to this Plan may be made in cash (by check) or,
      where expressly approved for the Participant by the Board and where permitted
      by
      law:

    

    
      	
            	
              (a)

            	
              by
                cancellation of indebtedness of the Company to the
                Participant;

            

    

    

    
      	
               

            	
              (b)

            	
              by
                surrender of shares that either: (1) have been owned by Participant
                for
                more than one year and have been paid for within the meaning
                of  Rule 144 of the Securities Act of 1933 (and, if such shares
                were purchased from the Company by use of a promissory note, such
                note has
                been fully paid with respect to such shares); or (2) were obtained
                by
                Participant in the public market;

            

    

    

    
      	 	
              (c)

            	
              by
                waiver of compensation due or accrued to the Participant for services
                rendered;

            

    

    

    
      	
               

            	
              (d)

            	
              with
                respect only to purchases upon exercise of an Option, and provided
                that a
                public market for the Company’s stock
                exists:

            

    

    

    
      	
               

            	 	
              (1)

            	
              through
                a “same day sale” commitment from the Participant and a broker-dealer that
                is a member of the National Association of Securities Dealers (an
“NASD
                DEALER”) whereby the Participant irrevocably elects to exercise the Option
                and to sell a portion of the Shares so purchased to pay for the Exercise
                Price, and whereby the NASD Dealer irrevocably commits upon receipt
                of
                such Shares to forward the Exercise Price directly to the Company;
                or

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               

            	 	
              (2)

            	
              through
                a “margin” commitment from the Participant and a NASD Dealer whereby the
                Participant irrevocably elects to exercise the Option and to pledge
                the
                Shares so purchased to the NASD Dealer in a margin account as security
                for
                a loan from the NASD Dealer in the amount of the Exercise Price,
                and
                whereby the NASD Dealer irrevocably commits upon receipt of such
                Shares to
                forward the Exercise Price directly to the Company;
                or

            

    

    

    
      	
            	
              (e)

            	
              by
                any combination of the foregoing.

            

    

    

    
      	
              10.

            	
              WITHHOLDING
                TAXES.

            

    

    

    10.1           Withholding
      Generally.  Whenever Shares are to be issued in satisfaction of
      Awards granted under this Plan, the Company may require the Participant to
      remit
      to the Company an amount sufficient to satisfy federal, state and local
      withholding tax requirements prior to the delivery of any certificate or
      certificates for such Shares.  Whenever, under this Plan, payments in
      satisfaction of Awards are to be made in cash, such payment will be net of
      an
      amount sufficient to satisfy federal, state, and local withholding tax
      requirements.

    

    10.2           Stock
      Withholding.  When, under applicable tax laws, a participant
      incurs tax liability in connection with the exercise or vesting of any Award
      that is subject to tax withholding and the Participant is obligated to pay
      the
      Company the amount required to be withheld, the Board may allow the Participant
      to satisfy the minimum withholding tax obligation by electing to have the
      Company withhold from the Shares to be issued that number of Shares having
      a
      Fair Market Value equal to the minimum amount required to be withheld,
      determined on the date that the amount of tax to be withheld is to be
      determined.  All elections by a Participant to have Shares withheld
      for this purpose will be made in accordance with the requirements established
      by
      the Board and be in writing in a form acceptable to the Board.

    

    
      	
              11.

            	
              PRIVILEGES
                OF STOCK
                OWNERSHIP.

            

    

    

    11.1           Voting
      and Dividends.  No Participant will have any of the rights of a
      stockholder with respect to any Shares until the Shares are issued to the
      Participant.  After Shares are issued to the Participant, the
      Participant will be a stockholder and will have all the rights of a stockholder
      with respect to such Shares, including the right to vote and receive all
      dividends or other distributions made or paid with respect to such Shares;
      provided, that if such Shares are Restricted Stock, then any new, additional
      or
      different securities the Participant may become entitled to receive with respect
      to such Shares by virtue of a stock dividend, stock split or any other change
      in
      the corporate or capital structure of the Company will be subject to the same
      restrictions as the Restricted Stock; provided, further, that the Participant
      will have no right to retain such stock dividends or stock distributions with
      respect to Shares that are repurchased at the Participant’s Purchase Price or
      Exercise Price pursuant to Section 12.

    

    11.2           Financial
      Statements.  Pursuant to regulation
      260.140.46 of the Rules of the California Corporations Commissioner, the Company
      will provide financial statements to each Participant prior to such
      Participant’s purchase of Shares under this Plan, and to each Participant
      annually during the period such Participant has Awards outstanding; provided,
      however, the Company will not be required to provide such financial statements
      to Participants whose services in connection with the Company assure them access
      to equivalent information.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              12.

            	
              TRANSFERABILITY.

            

    

    

    Awards
      granted under this Plan, and any interest therein, will not be transferable
      or
      assignable by Participant, and may not be made subject to execution, attachment
      or similar process, other than by will or by the laws of descent and
      distribution.  During the lifetime of the Participant an Award will be
      exercisable only by the Participant.  During the lifetime of the
      Participant, any elections with respect to an Award may be made only by the
      Participant unless otherwise determined by the Board and set forth in the Award
      Agreement with respect to Awards that are not ISOs.

    

    
      	
              13.

            	
              RESTRICTIONS
                ON
                SHARES.

            

    

    

    At
      the
      discretion of the Board, the Company may reserve to itself and/or its
      assignee(s) in the Award Agreement a right to repurchase a portion of or all
      Unvested Shares held by a Participant following such Participant’s Termination
      at any time within ninety (90) days after the later of (a) Participant’s
      Termination Date, or (b) the date Participant purchases Shares under this
      Plan.  Such repurchase by the Company shall be for cash and/or
      cancellation of purchase money indebtedness, and the price per share shall
      be
      the Participant’s Exercise Price or the Purchase Price, as
      applicable.

    

    
      	
              14.

            	
              CERTIFICATES.

            

    

    

    All
      certificates for Shares or other securities delivered under this Plan will
      be
      subject to such stock transfer orders, legends and other restrictions as the
      Board may deem necessary or advisable, including restrictions under any
      applicable federal, state or foreign securities law, or any rules, regulations
      and other requirements of the SEC or any stock exchange or automated quotation
      system upon which the Shares may be listed or quoted.

    

    
      	
              15.

            	
              ESCROW;
                PLEDGE OF
                SHARES.

            

    

    

    To
      enforce any restrictions on a Participant’s Shares, the Board may require the
      Participant to deposit all certificates representing Shares, together with
      stock
      powers or other instruments of transfer approved by the Board appropriately
      endorsed in blank, with the Company or an agent designated by the Company to
      hold in escrow until such restrictions have lapsed or terminated, and the Board
      may cause a legend or legends referencing such restrictions to be placed on
      the
      certificates.  Any Participant who is permitted to execute a
      promissory note as partial or full consideration for the purchase of Shares
      under this Plan will be required to pledge and deposit with the Company all
      or
      part of the Shares so purchased as collateral to secure the payment of
      Participant’s obligation to the Company under the promissory note; provided,
      however, that the Board may require or accept other or additional forms of
      collateral to secure the payment of such obligation and, in any event, the
      Company will have full recourse against the Participant under the promissory
      note notwithstanding any pledge of the Participant’s Shares or other
      collateral.  In connection with any pledge of the Shares, Participant
      will be required to execute and deliver a written pledge agreement in such
      form
      as the Board will from time to time approve.  The Shares purchased
      with the promissory note may be released from the pledge on a pro rata basis
      as
      the promissory note is paid.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              16.

            	
              EXCHANGE
                AND BUYOUT
                OF AWARDS.

            

    

    

    The
      Board
      may, at any time or from time to time, authorize the Company, with the consent
      of the respective Participants, to issue new Awards in exchange for the
      surrender and cancellation of any or all outstanding Awards.  The
      Board may at any time buy from a Participant an Award previously granted with
      payment in cash, Shares (including Restricted Stock) or other consideration,
      based on such terms and conditions as the Board and the Participant may
      agree.

    

    
      	
              17.

            	
              SECURITIES
                LAW AND
                OTHER REGULATORY
                COMPLIANCE.

            

    

    

    An
      Award
      will not be effective unless such Award is in compliance with all applicable
      federal and state securities laws, rules and regulations of any governmental
      body, and the requirements of any stock exchange or automated quotation system
      upon which the Shares may then be listed or quoted, as they are in effect on
      the
      date of grant of the Award and also on the date of exercise or other issuance.
      Notwithstanding any other provision in this Plan, the Company will have no
      obligation to issue or deliver certificates for Shares under this Plan prior
      to:
      (a) obtaining any approvals from governmental agencies that the Company
      determines are necessary or advisable; and/or (b) completion of any registration
      or other qualification of such Shares under any state or federal law or ruling
      of any governmental body that the Company determines to be necessary or
      advisable. The Company will be under no obligation to register the Shares with
      the SEC or to effect compliance with the registration, qualification or listing
      requirements of any state securities laws, stock exchange or automated quotation
      system, and the Company will have no liability for any inability or failure
      to
      do so.

    

    
      	
              18.

            	
              NO
                OBLIGATION TO
                EMPLOY.

            

    

    

     Nothing
      in this Plan or any Award granted under this Plan will confer or be deemed
      to
      confer on any Participant any right to continue in the employ of, or to continue
      any other relationship with, the Company or any Parent or Subsidiary of the
      Company or limit in any way the right of the Company or any Parent or Subsidiary
      of the Company to terminate Participant’s employment or other relationship at
      any time, with or without cause.

    

    
      	
              19.

            	
              CORPORATE
                TRANSACTIONS.

            

    

    

    19.1           Assumption
      or Replacement of Awards by Successor.  In the event of (a) a
      dissolution or liquidation of the Company, (b) a merger or consolidation in
      which the Company is not the surviving corporation (other than a merger or
      consolidation with a wholly-owned subsidiary, a reincorporation of the Company
      in a different jurisdiction, or other transaction in which there is no
      substantial change in the stockholders of the Company or their relative stock
      holdings and the Awards granted under this Plan are assumed, converted or
      replaced by the successor corporation, which assumption will be binding on
      all
      Participants), (c) a merger in which the Company is the surviving corporation
      but after which the stockholders of the Company immediately prior to such merger
      (other than any stockholder that merges, or which owns or controls another
      corporation that merges, with the Company in such merger) cease to own their
      shares or other equity interest in the Company, (d) the sale of substantially
      all of the assets of the Company, or (e) the acquisition, sale, or transfer
      of
      more than 50% of the outstanding shares of the Company by tender offer or
      similar transaction, any or all outstanding Awards may be assumed, converted
      or
      replaced by the successor corporation (if any), which assumption, conversion
      or
      replacement will be binding on all Participants.  In the alternative,
      the successor corporation may substitute equivalent Awards or provide
      substantially similar consideration to Participants as was provided to
      stockholders (after taking into account the existing provisions of the Awards).
      The successor corporation may also issue, in place of outstanding Shares of
      the
      Company held by the Participant, substantially similar shares or other property
      subject to repurchase restrictions no less favorable to the
      Participant.  In the event such successor corporation (if any) refuses
      to assume or substitute Awards, as provided above, pursuant to a transaction
      described in this Subsection 19.1, such Awards will expire on such transaction
      at such time and on such conditions as the Board will
      determine.  Notwithstanding anything in this Plan to the contrary, the
      Board may provide that the vesting of any or all Awards granted pursuant to
      this
      Plan will accelerate upon a transaction described in this Section
      19.  If the Board exercises such discretion with respect to Options,
      such Options will become exercisable in full prior to the consummation of such
      event at such time and on such conditions as the Board determines, and if such
      Options are not exercised prior to the consummation of the corporate
      transaction, they shall terminate at such time as determined by the
      Board.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    19.2           Other
      Treatment of Awards.  Subject to any greater rights granted to
      Participants under the foregoing provisions of this Section 19, in the event
      of
      the occurrence of any transaction described in Section 19.1, any outstanding
      Awards will be treated as provided in the applicable agreement or plan of
      merger, consolidation, dissolution, liquidation, or sale of assets.

    

    19.3           Assumption
      of Awards by the Company.  The Company, from time to time, also
      may substitute or assume outstanding awards granted by another company, whether
      in connection with an acquisition of such other company or otherwise, by either:
      (a) granting an Award under this Plan in substitution of such other company’s
      award; or (b) assuming such award as if it had been granted under this Plan
      if
      the terms of such assumed award could be applied to an Award granted under
      this
      Plan.  Such substitution or assumption will be permissible if the
      holder of the substituted or assumed award would have been eligible to be
      granted an Award under this Plan if the other company had applied the rules
      of
      this Plan to such grant.  In the event the Company assumes an award
      granted by another company, the terms and conditions of such award will remain
      unchanged (except that the exercise price and the number and nature of Shares
      issuable  upon exercise of any such option will be adjusted
      appropriately pursuant to Section 424(a) of the Code).  In the event
      the Company elects to grant a new Option rather than assuming an existing
      option, such new Option may be granted with a similarly adjusted Exercise
      Price.

    

    
      	
              20.

            	
              ADOPTION
                AND
                STOCKHOLDER APPROVAL.

            

    

    

    This
      Plan
      will become effective on the date on which it is adopted by the Board (the
      “Effective Date”).  Upon the Effective Date, the Board may grant
      Awards pursuant to this Plan.  The Company intends to seek stockholder
      approval of the Plan within twelve (12) months after the date this Plan is
      adopted by the Board; provided, however, if the Company fails to obtain
      stockholder approval of the Plan during such 12-month period, pursuant to
      Section 422 of the Code, any Option granted as an ISO at any time under the
      Plan
      will not qualify as an ISO within the meaning of the Code and will be deemed
      to
      be an NQSO.

    

    
      	
              21.

            	
              TERM
                OF
                PLAN/GOVERNING LAW.

            

    

    

    Unless
      earlier terminated as provided  herein, this Plan will terminate ten
      (10) years from the date this Plan is adopted by the Board or, if earlier,
      the
      date of stockholder approval.  This Plan and all agreements there
      under shall be governed by and construed in accordance with the laws of the
      State of California.

    

    
      	
              22.

            	
              AMENDMENT
                OR
                TERMINATION OF PLAN.

            

    

    

    The
      Board
      may at any time terminate or amend this Plan in any respect, including without
      limitation amendment of any form of Award Agreement or instrument to be executed
      pursuant to this Plan; provided, however, that the Board will not, without
      the
      approval of the stockholders of the Company, amend this Plan in any manner
      that
      requires such stockholder approval.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              23.

            	
              NONEXCLUSIVITY
                OF
                THE PLAN.

            

    

    

    Neither
      the adoption of this Plan by the Board, the submission of this Plan to the
      stockholders of the Company for approval, nor any provision of this Plan will
      be
      construed as creating any limitations on the power of the Board to adopt such
      additional compensation arrangements as it may deem desirable, including,
      without limitation, the granting of stock options and bonuses otherwise than
      under this Plan, and such arrangements may be either generally applicable or
      applicable only in specific cases.

    

    
      	
              24.

            	
              ACTION
                BY
                BOARD.

            

    

    

    Any
      action permitted or required to be
      taken by the Board or any decision or determination permitted or required to
      be
      made by the Board pursuant to this Plan shall be taken or made in the Board’s
      sole and absolute discretion.<PAGE>
                                                                   Exhibit 10.45

October 23, 2006

Mr. Mike Davies
Reclamation Consulting and Applications, Inc.
940 Calle Amanecer
Unit E
San Clemente, CA 92673

Dear Mr. Davies:

This letter agreement confirms the engagement of Monarch Bay Capital Group,
L.L.C. ("MBCG") by Reclamation Consulting and Applications, Inc. ("RCAI") as
consultants to assist in the definition and execution of a debt & warrant
purchase agreement.

         1. SERVICES.

         (a) MBCG will use its best professional efforts to perform the
consulting services described in Exhibit A hereto (the "Services"). MBCG will
devote such time and effort as is it deems necessary to provide the Services.
RCAI will provide MBCG with all information concerning RCAI which MBCG
reasonably deems appropriate in connection with its engagement and will provide
MBCG with reasonable access to RCAI's officers, directors and advisors upon
reasonable notice in advance. To RCAI's knowledge, all such information will be
true and accurate in all material respects and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the circumstances
under which such statements are made. RCAI acknowledges that MBCG will be using
and relying upon the accuracy and completeness of publicly available information
and the information supplied by the Company and its officers in connection with
its engagement without independent verification.

         (b) RCAI shall have complete discretion whether or not to accept and
enter into definitive agreements reflecting the terms and conditions proposed by
MBCG in connection with its performance of the Services, and RCAI shall have no
obligation to enter into any agreement with any party which is not approved by
its Board of Directors in accordance with its corporate requirements.

         (c) MBCG will keep confidential and not disclose or permit its
employees or representatives to disclose confidential information received from
RCAI (other than to MBCG employees or agents involved in the performance of
services hereunder or otherwise on a need-to-know basis), except as contemplated
in this letter agreement, as otherwise may be authorized in writing by RCAI, or
as may be required by law. For purposes of this letter agreement, "confidential
information" means information provided by RCAI to MBCG that is not otherwise
lawfully available to MBCG from sources outside of RCAI, and any such
information shall cease to be confidential information when it becomes generally
available to the public, or comes to MBCG's attention in either case, through
other sources that do not, to MBCG's knowledge at the time, involve a violation
of this or any similar agreement.

         (d) In the performance of the Services by MBCG hereunder, MBCG and its
agents and representatives shall comply with all applicable laws and
regulations. MBCG is not bound by any agreement, arrangement, undertaking, law,
regulation, or court order which would prohibit it from providing the Services
and receiving fees in the manner contemplated by this letter agreement.

         2. FEES.

         (a) REDEMPTION FEE. RCAI will pay to MBCG a fee (the "Redemption Fee")
equal to twenty percent (20%) of the difference between (A) the sum of (1)
RCAI's total obligations owed to AJW Offshore, Ltd., AJW Qualified Partners,
LLC, AJW Partners, LLC and New Millennium Capital Partners II, LLC
(collectively, the "Investors") as of the date of redemption of such, the
("Investor Debt") and (2)

<PAGE>

the value of RCAI warrants issued to the Investors in connection with Investor
Debt. ("Investor Warrants") and (B) the total redemption amount paid by RCAI to
the Investors for redeeming the Investor Debt and the Investor Warrants
("Redemption Amount"). The Investor Debt shall be determined by the Investor and
shall include outstanding notes, fees, penalties, interest and all other charges
owed to the Investor. The Redemption Fee will be due and payable in cash, upon
RCAI's payment of the Redemption Amount to the Investors.

         3. EXPENSES. In addition to the compensation described in Section 2
above, RCAI will reimburse MBCG for all reasonable out-of-pocket expenses
incurred in connection with the performance of the Services upon presentation of
supporting documentation provided that such expenses are pre-approved by RCAI.
Such reimbursement will be due and payable within five (5) business days after
RCAI's receipt of MBCG's invoice for same.

         4. INDEMNITY; LIMITATION OF LIABILITY.

         (a) RCAI will indemnify and hold harmless MBCG against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements (and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise), including, without limitation, the costs,
expenses and disbursements, reasonably incurred, of investigating, preparing or
defending any such action, suit, proceeding or investigation (whether or not in
connection with litigation in which MBCG is a party), directly or indirectly,
caused by, relating to, based upon, arising out of, or in connection with this
letter agreement or MBCG's performance hereunder, except to the extent primarily
caused by the gross negligence or willful misconduct of MBCG, or its agents or
representatives.

         (b) MBCG will indemnify and hold harmless RCAI against any and all
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements (and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise), including, without limitation, the costs,
expenses and disbursements, reasonably incurred, of investigating, preparing or
defending any such action, suit, proceeding or investigation (whether or not in
connection with litigation in which RCAI is a party), directly or indirectly,
caused by, relating to, based upon, arising out of, or in connection with this
letter agreement or MBCG's performance hereunder, except to the extent primarily
caused by the gross negligence or willful misconduct of RCAI, or its agents or
representatives.

         (c) The indemnification provisions of paragraph 4(b) above shall be in
addition to any liability or damages which an indemnified party may otherwise be
entitled to receive from an indemnifying party hereunder, and shall extend to
the following for each of MBCG or RCAI, as the case may be: its affiliated
entities, members, employees, legal counsel, agents and controlling persons
(within the meaning of the federal securities laws), and the officers,
directors, employees, legal counsel, agents and controlling persons of any of
them. All references to MBCG or RCAI in this Section 4 shall be understood to
include any and all of the foregoing relationships to such party, as applicable.

         (d) Other then for direct breach of this letter agreement by either
MBCG or RCAI, neither party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the other for or in connection
with this letter agreement or such party's performance hereunder, except to the
extent that any such liability is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily from such party's gross negligence or willful misconduct, or that of
such party's agents or representatives. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY, OR
INDIRECT DAMAGES, WHETHER CLAIMED UNDER CONTRACT, TORT, OR ANY OTHER LEGAL
THEORY, EVEN IF THE PARTY ALLEGED TO BE LIABLE FOR THE DAMAGES HAS BEEN ADVISED
IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.

                                       2
<PAGE>

         5. TERM OF ENGAGEMENT. This letter agreement shall continue in full
force and effect until the earlier of the following occurs: (a) all of the
Services hereunder have been fully performed; (b) both parties have mutually
agree to terminate this letter agreement, effective as of the date agreed upon
by the parties; and (c) either party has notified the other of its desire to
terminate the letter agreement, effective as of a date not less than thirty (30)
days from the date such notification is received. Upon termination of this
letter agreement, neither party will have any liability or continuing obligation
to the other, except that: (a) RCAI will remain liable for any previously
approved, out-of-pocket expenses incurred up to the time of termination; (b) the
provisions of Sections 1(b), 4, 6 and 7 will survive the termination of this
letter agreement.

         6. SUCCESSORS AND ASSIGNS. The benefits of this letter agreement shall
inure to the respective successors and assigns of the parties hereto and of the
indemnified parties hereunder and their successors and assigns and
representatives, and the obligations and liabilities assumed in this letter
agreement by the parties hereto shall be binding upon their respective
successors and assigns; provided, that the rights and obligations of either
party under this Agreement may not be assigned without the prior written consent
of the other party hereto and any other purported assignment shall be null and
void.

         7. MISCELLANEOUS.

         (a) RCAI is a sophisticated business enterprise that has retained MBCG
for the limited purposes set forth in this letter agreement, and the parties
acknowledge and agree that their respective rights and obligations are
contractual in nature. RCAI recognizes that the consulting relationship is not
an exclusive relationship for MBCG or any of its personnel. Each party disclaims
an intention to impose fiduciary obligations on the other by virtue of the
engagement contemplated by this letter agreement, and each party agrees that
there is no fiduciary relationship between them.

         (b) The Services do not include requiring MBCG to engage in any
activities for which an investment advisor's registration or license is required
under the U.S. Investment Advisors Act of 1940, or under any other applicable
federal or state law; or for which a "broker's" or "dealer's" registration or
license is required under the U.S. Securities Exchange Act of 1934, or under any
other applicable federal or state law. MBCG's work on this engagement shall not
constitute the rendering of legal advice, or the providing of legal services, to
RCAI. Accordingly, MBCG shall not express any legal opinions with respect to any
matters affecting RCAI.

         (c) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California applicable to the performance
and enforcement of contracts made within such state, without giving effect to
the law of conflicts of laws applied thereby. In the event that any dispute
shall occur between the parties arising out of or resulting from the
construction, interpretation, enforcement or any other aspect of this Agreement,
the parties hereby agree to accept the exclusive jurisdiction of the Courts of
the State of California sitting in and for the County of Orange. In the event
either party shall be forced to bring any legal action to protect or defend its
rights hereunder, then the prevailing party in such proceeding shall be entitled
to reimbursement from the non-prevailing party of all fees, costs and other
expenses (including, without limitation, the reasonable expenses of its
attorneys) in bringing or defending against such action.

         (d) This letter agreement constitutes the entire agreement of the
parties with respect to the matters herein referred and supersedes all prior
agreements and understandings, written and oral, between the parties with
respect to the subject matter hereof. Neither this letter agreement nor any term
hereof may be changed, waived or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver or
termination is sought.

Please confirm your agreement by signing and returning a copy of this letter
agreement to MBCG.

                                       3
<PAGE>

                                          Very truly yours,

                                          Monarch Bay Capital Group, L.L.C.

                                          By:    /s/ David Walters
                                             --------------------------------

Accepted and agreed by:

Reclamation Consulting and Applications, Inc.

By:   /s/ Michael Davies
   -----------------------------------

                                       4
<PAGE>

                                    EXHIBIT A
                                    SERVICES

DEBT & WARRANT PURCHASE  AGREEMENT

o       Assist the Company to negotiate a redemption formula with the Investors
        which is more favorable to the Company than the formula to which the
        Company is currently subject under its agreements with the Investors.

                                       5

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