UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 26, 2017
NioCorp Developments Ltd.
(Exact name of registrant as specified in its charter)
British
Columbia, Canada (State or other jurisdiction of incorporation) |
000-55710 (Commission File Number) |
98-1262185 (IRS Employer Identification No.) |
7000
South Yosemite Street, Suite 115 Centennial, Colorado 80112 (Address of principal executive offices) (Zip Code) |
Registrant’s telephone number, including area code: (720) 639-4647
N/A (Former name or former address, if changed since last report.)
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 | Entry into a Material Definitive Agreement. |
Private Placement
On July 26, 2017, NioCorp Developments Ltd. (the “Company”) entered into an agency agreement (the “Agency Agreement”) with Mackie Research Capital Corporation (the “Agent”) and closed its previously announced brokered private placement (the “Private Placement”) of units of the Company (each, a “Unit” and, collectively, the “Units”). Under the Private Placement, a total of 2,962,500 Units were issued at a price per Unit of C$0.65, for total gross proceeds to the Company of approximately C$1,925,625.
Each Unit issued pursuant to the Private Placement consists of one common share in the capital of the Company (a “Common Share”) and one Common Share purchase warrant (a “Shareholder Warrant”). Each Shareholder Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.79 until July 26, 2021 (the “Shareholder Warrant Shares”). In connection with the Private Placement, the Company paid the Agent an aggregate cash commission of approximately C$125,166, equal to six and a half per cent (6.5%) of the gross proceeds raised under the Private Placement. The Company also issued to the Agent 192,562 broker warrants (the “Broker Warrants”), equal to six and a half per cent (6.5%) of the Units sold pursuant to the Private Placement. Each Broker Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.79 until July 26, 2021 (the “Broker Warrant Shares”).
In connection with the closing of the Private Placement, the Company entered into subscription agreements (collectively, the “Subscription Agreements”) by and between the Company and each investor. The Subscription Agreements contain the terms of the Private Placement and typical representations and warranties from the investors to the Company and from the Company to the investors. Additionally, as described below, in accordance with the terms of the Subscription Agreements and the Agency Agreement, the Company granted the investors and the Agent certain registration rights regarding the Common Shares of the Company underlying the Units, the Shareholder Warrants, the Shareholder Warrant Shares the Broker Warrants and the Broker Warrant Shares.
In connection with the Private Placement, the Company and the Agent terminated a previous arrangement, announced on May 10, 2017, pursuant to which the Agent was to purchase, on a bought deal short form prospectus basis, 3,077,000 units of the Company at a price of C$0.65 per Unit. The parties mutually agreed to terminate that agreement as a final prospectus could not be receipted until the NI 43-101 technical report detailing the results of the Elk Creek Project Feasibility Study announced on June 30, 2017 was filed.
Registration Rights
On July 26, 2017, in connection with the closing of the Private Placement, the Company granted registration rights to the investors and the Agent in accordance with the terms of the Subscription Agreements and the Agency Agreement, respectively. Pursuant to such registration rights, the Company has agreed to use its commercially reasonable efforts to file a registration statement with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933 (the “Securities Act”) registering the resale by the investors in the Private Placement and the Agent of the Common Shares of the Company underlying the Units, the Shareholder Warrants, the Shareholder Warrant Shares, the Broker Warrants and the Broker Warrant Shares (collectively, the “Registrable Securities”) and to cause such registration statement to be declared effective as soon as possible thereafter. If the Company has not caused the registration statement to be declared effective by the Commission at or before 5:00 p.m. (Vancouver time) on November 26, 2017, then (i) each Unit will thereafter entitle the holder to receive, for no additional consideration, an additional 10% of the Shareholder Warrants underlying each Unit, resulting in the issuance of 1.1 Shareholder Warrants (instead of one Shareholder Warrant) per Unit, with each whole Shareholder Warrant being exercisable into one Shareholder Warrant Share, subject to adjustment, on exercise of the Shareholder Warrants and (ii) the Agent will be entitled to receive, for no additional consideration, an additional 10% of the Broker Warrants, with each whole Broker Warrant being exercisable into one Broker Warrant Share, subject to adjustment, on exercise of the Broker Warrants. The Company has further agreed to use its commercially reasonable efforts to maintain the effectiveness of the registration statement and any post-effective amendment thereto until the earlier of the date (i) all of the Registrable Securities have been sold pursuant to such registration statement or Rule 144 under the Securities Act, if available, or (ii) four years from the effective date of the registration statement.
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The above summary of the material terms of the registration rights granted to investors and the Agent in the Private Placement is qualified in its entirety by the actual terms and conditions of the registration rights contained in the Agency Agreement, Form of Subscription Agreement and Broker Warrant, which are filed as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3, respectively, to this Current Report on Form 8-K and are hereby incorporated by reference into this Item 1.01.
Warrant Indenture
On July 26, 2017, in connection with Private Placement, the Company entered into a warrant indenture with Computershare Trust Company of Canada (the “Warrant Agent”) regarding the Shareholder Warrants issued in connection with the closing of the Private Placement (the “Warrant Indenture”). The Warrant Indenture contains customary terms and conditions for the issuance, transfer and exercise of the Shareholder Warrants, the terms governing actions taken by the Shareholder Warrant holders and the obligations of the Company and the Warrant Agent in relation to the Shareholder Warrants.
The above summary of the material terms of the Warrant Indenture is qualified in its entirety by the actual terms and conditions of the Warrant Indenture, which is filed as Exhibit 4.4 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.
Item 3.02 | Unregistered Sales of Equity Securities. |
As disclosed above, on July 26, 2017, the Company closed the Private Placement. In connection therewith, the Company issued a total of 2,962,500 Units at a price of C$0.65 per Unit, for aggregate gross proceeds of C$1,925,625. Each Unit consists of one Common Share of the Company and one transferable Shareholder Warrant. Each Shareholder Warrant entitles the holder thereof to purchase one additional Common Share at a price of C$0.79 until July 26, 2021. The Company also issued to the Agent 192,562 Broker Warrants. Each Broker Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.79 until July 26, 2021. The Units and the Broker Warrants were issued on a private offering basis to accredited investors and investors with whom the Company had a pre-existing relationship, who were outside of the United States and were not, and were not acting for the account or benefit of, a U.S. person (as defined in Regulation S under the Securities Act), pursuant to the exclusion from the registration requirements of the Securities Act provided by Rule 903 of Regulation S thereunder and pursuant to the representations and covenants of the investors made to the Company in connection therewith.
On June 27, 2017, the Company issued 957,174 Common Shares of the Company to Lind Asset Management IV, LLC (“Lind”) upon conversion of US$500,000 in principal amount of the Company’s outstanding convertible note issued to Lind in December 2015 (the “Lind Note”) at a conversion price of C$0.691 per share. The Common Shares were issued, among other exemptions, pursuant to Section 3(a)(9) of the Securities Act, in connection with the voluntary conversion of a portion of the amount outstanding under the Lind Note and based upon representations and warranties of Lind in connection therewith.
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit | Description | |
4.1 | Agency Agreement, dated as of July 26, 2017, by and between the Company and Mackie Research Capital Corporation | |
4.2 | Form of Subscription Agreement | |
4.3 | Broker Warrant | |
4.4 | Warrant Indenture | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NIOCORP DEVELOPMENTS LTD. | ||
By: | /s/ Neal S. Shah | |
Name: Neal S. Shah | ||
Title: Chief Financial Officer |
Date: August 1, 2017
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Exhibit Index
Exhibit 4.1
AGENCY AGREEMENT
July 26, 2017
NioCorp
Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO
US 80112
Attention: | Mark Alan Smith, Executive, Chairman, CEO and President |
Dear Sir:
The undersigned, Mackie Research Capital Corporation (the “Agent”), understands that NioCorp Developments Ltd. (the “Corporation”) proposes to create, issue and sell, subject to the terms and conditions set forth herein up to 3,077,000 Units of the Corporation (the “Units”) at a price of $0.65 per Unit (the “Purchase Price”), for total gross proceeds to the Corporation of up to $2,000,050 (the “Brokered Offering”).
Each Unit shall be comprised of one Common Share (each, a “Unit Share”) and one common share purchase warrant (each, a “Warrant”), with each Warrant entitling the holder thereof to purchase one additional Common Share (each, a “Warrant Share”) at an exercise price of $0.79 per Warrant at any time up to 5:00 p.m. (Vancouver time) on the date that is 48 months following the Closing Date (as defined herein); provided that if the Corporation has not caused the Registration Statement to be declared effective by the SEC at or before 5:00 p.m. (Vancouver time) on November 26, 2017, then each Unit will thereafter entitle the holder to receive, for no additional consideration, an additional 10% of the Warrants underlying each Unit, resulting in the issuance of 1.1 Warrants (instead of one Warrant) per Unit, with each whole Warrant being exercisable into one Warrant Share, subject to adjustment, on exercise of the Warrants (the additional Warrants are referred to as the “Penalty Warrants”).
The Warrants will be created and issued pursuant to the terms and conditions of a warrant indenture (the “Warrant Indenture”) to be entered into on the Closing Date between the Corporation and the Warrant Agent, in its capacity as warrant agent thereunder, and the specific attributes of the Warrants shall be set forth in the Warrant Indenture.
Upon and subject to the terms and conditions set forth herein, the Agent hereby agrees to act, and upon acceptance hereof, the Corporation hereby appoints the Agent, as agent, to offer for sale by way of private placement on a “best efforts” basis under the Brokered Offering (the “Offering”), without Agent liability, the Units to be issued and sold pursuant to the Offering and the Agents agree to arrange for purchasers of the Units in the Qualifying Jurisdictions, and by its acceptance hereof the Corporation hereby appoints the Agent as the Corporation’s exclusive agent in respect of the Offering; provided that the Agent shall act as agent only and shall be under no obligation to purchase any of the Units. Notwithstanding the foregoing, the Agent may, subject to Securities Laws, subscribe for and purchase Units if it so chooses.
In addition, the Corporation hereby grants to the Agent an irrevocable option (the “Over-Allotment Option”) to offer for sale up to 461,550 additional Units of the Corporation (the “Over-Allotment Units”) at the Purchase Price. The Over-Allotment Option may be exercised by the Agent, in whole or in part, by providing written notice forty-eight (48) hours prior to the Closing Time (the “Over-Allotment Expiry Date”) in accordance with the provisions hereof. For clarity, the Agent shall be under no obligation whatsoever to exercise the Over-Allotment Option, in whole or in part.
Unless the context otherwise requires, all references to the “Units” shall include any securities issued in connection with the exercise of the Over-Allotment Option, any reference to “Unit Share” shall include the common shares underlying the Over-Allotment Units, any reference to “Warrant” shall include the warrants underlying the Over-Allotment Units and the Penalty Warrants, as applicable, any reference to “Warrant Share” shall include the securities underlying the Warrants forming part of the Over-Allotment Units, and any reference to “Broker Warrant” shall include the Penalty Broker Warrants, if applicable.
In consideration of the services to be rendered by the Agent, including assisting in preparing documentation relating to the Units, the Corporation agrees to pay to the Agent, at the Closing Time, the Commission and the Broker Warrants in accordance with Section 16. The obligation of the Corporation to issue the Broker Warrants shall arise at the Closing Time and the Commission and the Broker Warrants shall be fully earned by the Agent upon completion of the Offering.
DEFINITIONS
In this Agreement, in addition to the terms defined above or elsewhere in this Agreement, the following terms shall have the following meanings:
“0896800” means 0896800 B.C. Ltd., formerly 0886338 B.C. Ltd., a wholly-owned subsidiary of the Corporation;
“affiliate” has the same meaning as set forth in the Securities Act (Ontario);
“Agent” means Mackie Research Capital Corporation;
“Agreement” means the agreement resulting from the acceptance by the Corporation of the offer made hereby;
“Alternative Transaction” has the meaning ascribed to such term in Section 15;
“Alternative Transaction Commission” has the meaning ascribed to such term in Section 15;
“Brokered Offering” has the meaning ascribed to such term on the face page of this Agreement;
“Broker Shares” has the meaning ascribed to such term in Section 16;
“Broker Warrants” has the meaning ascribed thereto in Section 16;
“Business Day” means a day which is not a Saturday, Sunday or statutory or civic holiday in the city of Toronto, Ontario;
“CDS” means the Canadian Depository for Securities Limited;
“Claims” has the meaning ascribed thereto in Section 13;
“Closing” means the closing on the Closing Date of the transaction of purchase and sale in respect of the Units as contemplated by this Agreement and the Subscription Agreements;
“Closing Date” means July 26, 2017 or such other date as the Corporation and the Agent may agree;
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“Closing Time” means 8:00 a.m. (Toronto time) on the Closing Date or such other time on the Closing Date as the Corporation and the Agent may agree;
“Commission” has the meaning ascribed to such term in Section 16;
“Common Share” means a common share in the capital of the Corporation and “Common Shares” means, collectively, the common shares in the capital of the Corporation;
“Contaminant” means and includes, without limitation, any pollutants, dangerous substances, liquid wastes, hazardous wastes, hazardous materials, hazardous substances or contaminants), including, without limitation, the storage, use, holding, collection, purchase, accumulation, assessment, generation, manufacture, construction, processing, treatment, stabilization, disposition, handling or transportation thereof, or the release, escape, leaching, dispersal or migration thereof into the natural environment, including the movement through or in the air, soil, surface water or groundwater;
“Corporation” means NioCorp Developments Ltd., a corporation existing under the Business Corporations Act (Ontario);
“Corporation’s Auditors” means BDO USA, LLP, or such other firm of chartered accountants as the Corporation may have appointed or may from time to time appoint as auditors of the Corporation;
“Debt Instrument” means any mortgage, note, indenture, loan, bond, debenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed money or other liabilities to which the Corporation or any Subsidiary is a party or its property or assets are otherwise bound;
“Disclosure Documents” means, collectively, all of the documentation which has been filed by or on behalf of the Corporation with the relevant Securities Commissions pursuant to the requirements of applicable Securities Laws, including all press releases, material change reports (excluding any confidential material change report), prospectuses, financial statements and Technical Reports of the Corporation.
“Engagement Letter” means the engagement letter dated June 30, 2017, between the Corporation and the Agent;
“Environmental Laws” has the meaning ascribed to such term in Section 4(qqq);
“Environmental Permits” has the meaning ascribed to such term in Section 4(qqq);
“ECRC” means Elk Creek Resources Corp., a private Nebraska corporation and wholly-owned subsidiary of 0896800;
“Financial Statements” means, collectively, the comparative audited consolidated financial statements as at and for the years ended June 30, 2016 and 2015 of the Corporation, the interim condensed consolidated financial statements for the three and nine months ended March 31, 2017;
“Governmental Authority” means any governmental authority and includes, without limitation, any national or federal government, province, state, municipality or other political subdivision of any of the foregoing, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing;
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“Indemnified Party” shall have the meaning ascribed thereto in Section 13;
“Initial Registration Statement” has the meaning ascribed thereto in 5(b);
“Intellectual Property” has the meaning ascribed to such term in Section 4(mmm);
“Leased Premises” has the meaning ascribed to such term in Section 4(ddd);
“Marketing Materials” means, without limitation, any written materials relating to the Corporation or the Subsidiaries or any of their respective officers or directors provided by the Corporation to the Agent and the Agent’s counsel in connection with the Offering;
“Material Adverse Effect” when used in connection with an entity means any change (including a decision to implement such a change made by the board of directors or by senior management who believe that confirmation of the decision by the board of directors is probable), event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets (including intangible assets), liabilities, capitalization, ownership, financial condition or results of operations of such entity on a consolidated basis, after giving effect to the transactions contemplated by this Agreement;
“Material Agreement” means any material Debt Instrument, indenture, contract, commitment, agreement (written or oral), instrument, lease or other document, to which the Corporation or any of the Subsidiaries are a party or by which any one of them are bound;
“misrepresentation”, “material fact”, “material change”, “affiliate”, “associate” and “distribution” shall have the respective meanings ascribed thereto in the Securities Act (Ontario);
“Offering” has the meaning ascribed to such term on the face page of this Agreement;
“Over-Allotment Expiry Date” has the meaning ascribed to such term on the face page of this Agreement;
“Over-Allotment Option” has the meaning ascribed to such term on the face page of this Agreement;
“Over-Allotment Units” has the meaning ascribed to such term on the face page of this Agreement;
“Penalty Broker Warrant” has the meaning ascribed thereto in Section 16;
“Penalty Warrant” has the meaning ascribed to such term on the face page of this Agreement;
“Person” shall be broadly interpreted and shall include any individual, corporation, partnership, joint venture, association, trust or other legal entity;
“Properties” means the mineral properties and projects of the Corporation and the Subsidiaries as described in the Disclosure Documents and/or Public Record and “Property” means any one of them;
“Public Record” means all publicly available press releases, material change reports, information circulars, management’s discussion and analysis, annual information forms, financial statements, business acquisition reports and other documents that have been disclosed by the Corporation to the public or filed by the Corporation with applicable securities regulatory authorities in the provinces where the Corporation is a reporting issuer pursuant to applicable securities laws or otherwise posted by the Corporation on SEDAR as of the date of this Agreement;
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“Purchase Price” has the meaning ascribed to such term on the face page of this Agreement;
“Purchaser” means each Person who acquires Units under the Offering by duly completing, executing and delivering the Subscription Agreements as a purchaser;
“Qualifying Jurisdictions” means the Provinces of British Columbia, Alberta, Saskatchewan, Ontario, and New Brunswick;
“Registration Statement” has the meaning ascribed thereto in 2(d);
“Rule 462(b) Registration Statement” has the meaning ascribed thereto in 4(b);
“SEC” means the United States Securities and Exchange Commission;
“Securities Commissions” means, collectively, the securities commissions or other securities regulatory authorities in the Qualifying Jurisdictions;
“Securities Laws” means, unless the context otherwise requires, all applicable securities laws in each of the Qualifying Jurisdictions, the respective regulations made thereunder, together with applicable published fee schedules, prescribed forms, policy statements, multilateral and national instruments, orders, blanket rulings and other regulatory instruments of the securities regulatory authorities in such jurisdictions and the rules of any applicable stock exchange (including the TSX);
“Selling Firms” has the meaning ascribed thereto in Section 4(b);
“Selling Jurisdictions” means collectively, the Qualifying Jurisdictions and such other jurisdictions as the Agent and the Corporation may agree;
“Selling Securityholder Form” has the meaning ascribed thereto in Section 4(a);
“Subscription Agreements” means, collectively, the subscription agreements in the form agreed upon by the Agent and the Corporation pursuant to which Purchasers agree to subscribe for and purchase the Units as contemplated herein and shall include, for greater certainty, all schedules and exhibits thereto;
“subsidiary” has the meaning ascribed thereto in the Securities Act (Ontario);
“Subsidiaries” means each of ECRC and 0896800, and “Subsidiary” means any one of them;
“Taxes” means all taxes (including income tax, capital tax, payroll taxes, employer health tax, workers’ compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto;
“Transfer Agent” means Computershare Investor Services Inc.;
“TSX” means the Toronto Stock Exchange;
“Unit Shares” means the Common Shares partially comprising the Units comprising the Offering;
“United States” means the United States of America as defined in Regulation S under the U.S. Securities Act;
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“Units” has the meaning ascribed to such term on the face page of this Agreement;
“U.S. GAAP” means United States generally accepted accounting principles, consistently applied;
“U.S. Person” means a U.S. person as that term is defined in Rule 902(k) of Regulation S under the U.S. Securities Act;
“U.S. Preliminary Prospectus” means any preliminary prospectus included in the Initial Registration Statement or filed with the SEC pursuant to Rule 424(a) of the rules and regulations of the SEC under the U.S. Securities Act;
“U.S. Prospectus” has the meaning ascribed thereto in 2(d);
“U.S. Securities Act” means the United States Securities Act of 1933, as amended;
“U.S. Securities Laws” means all applicable securities laws in the United States, including without limitation, the U.S. Securities Act, the U.S. Exchange Act and the rules and regulations promulgated thereunder, and any applicable state securities laws;
“Warrant Agent” means Computershare Trust Company of Canada;
“Warrant Indenture” has the meaning ascribed to such term on the face page of this Agreement;
“Warrant Shares” means the Common Shares issuable upon exercise of the Warrants; and
“Warrants” means Common Share purchase warrants of the Corporation forming part of the Units comprising the Offering, with each whole warrant being exercisable to acquire, subject to adjustment, one Common Share at an exercise price of $0.79 per Warrant at any time up to 5:00 p.m. (Vancouver time) on the date that is 48 months following the Closing Date.
TERMS AND CONDITIONS
1.
(a) Sale on Exempt Basis. The Agent shall offer for sale the Units comprising the Offering on behalf of the Corporation:
(i) in the Qualifying Jurisdictions in compliance with all applicable Securities Laws and in such other jurisdictions outside of Canada agreed to by the Corporation; and
(ii) only to such Purchasers and in such manner so that the sale of the Units to such Purchasers is exempt from any prospectus or offering memorandum filing or delivery requirement or similar requirement of applicable securities laws and is otherwise in compliance with all applicable Securities Laws and all applicable securities laws of such other jurisdictions.
(b) Filings. The Corporation undertakes to file or cause to be filed all forms or undertakings required to be filed by the Corporation in connection with the purchase and sale of the Units so that the distribution of the Units may lawfully occur without the necessity of filing a prospectus, a registration statement or an offering memorandum in Canada (but on terms that will permit the Units acquired by the Purchasers in the Qualifying Jurisdictions to be sold by such Purchasers in the Qualifying Jurisdictions subject to, and in compliance with, applicable Securities Laws), and the Agent undertakes to cause the Purchasers to complete any forms required by Securities Laws or other applicable securities laws and by the TSX. All fees payable in connection with such filings under all applicable Securities Laws shall be at the expense of the Corporation.
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(c) No Advertising. None of the Corporation or the Agent shall advertise the offer and sale of the Units in any newspaper, magazine, printed media or similar medium of general and regular paid circulation, broadcast over radio or television or by means of the Internet or conduct any seminar or meeting relating to the offer and sale of the Units whose attendees have been invited by general solicitation or advertising.
2. Corporation’s Covenants. The Corporation hereby covenants to the Agent and to the Purchasers and their permitted assigns, and acknowledges that each of them is relying on such covenants in purchasing the Units:
(a) unless otherwise inconsistent with the fiduciary duties of the board of directors of the Corporation, for a period of 18 months after the Closing Date it will use commercially reasonable efforts to maintain its status as a “reporting issuer” under Securities Laws of the provinces of British Columbia, Alberta, Saskatchewan, New Brunswick and Ontario not in default of any requirement of such Securities Laws;
(b) the Unit Shares and the Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will be duly and validly created, authorized and issued on the payment therefor, and such Unit Shares and Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will have the attributes set out in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, and any Amendment, as applicable;
(c) as promptly as practicable following the Closing Date and the receipt by the Corporation of Selling Securityholder Forms, it will prepare and file the U.S. Preliminary Prospectus under the U.S. Securities Act in the United States;
(d) as soon as possible after any comments of the SEC have been satisfied, it will have caused the Registration Statement to be declared effective by the SEC and will prepare and file with the SEC, the U.S. Prospectus pursuant to Rule 424(b) under the U.S. Securities Act in the United States; and shall further ensure that no stop order suspending the effectiveness of the U.S. Prospectus, the Registration Statement or any post-effective amendment thereto or any Rule 462(b) Registration Statement, if any, is issued and no proceeding for that purpose is initiated or threatened by the SEC; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) under the U.S. Securities Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the U.S. Securities Act to be part of the Initial Registration Statement at the time it is declared effective, each as amended at the time such part of the Initial Registration Statement becomes effective or such part of the Rule 462(b) Registration Statement, if any, becomes effective, are hereinafter collectively called the “Registration Statement”; and such final prospectus, in the form first filed pursuant to Rule 424(b) under the U.S. Securities Act, is hereinafter called the “U.S. Prospectus”;
(e) The Corporation agrees to use commercially reasonable efforts, including instructing its counsel to deliver requested legal opinions, following the effectiveness of the Registration Statement to instruct the Transfer Agent for the Common Shares, Warrant Shares, Warrants, Broker Warrants and Broker Shares covered by the Registration Statement to remove any restrictive legends included on such Common Shares, Warrant Shares, Warrants, Broker Warrants or Broker Shares in connection with the initial sale or transfer thereof by the selling securityholders listed in the Registration Statement, and any costs related to the removal of the restrictive legends shall be borne by the Corporation (up to a maximum of $150 per legend removal request per securityholder);
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(f) it shall fulfill to the satisfaction of the Agent all legal requirements to be fulfilled by it to enable the Unit Shares and the Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) to be offered for sale and sold in the Qualifying Jurisdictions by or through the Selling Firms who comply with all applicable Securities Laws in each of the Selling Jurisdictions;
(g) each of the Unit Shares, Warrants and Warrant Shares, including those issued pursuant to the Over-Allotment Option, and the Broker Warrants and the Broker Shares, upon effectiveness of the Registration Statement, will not carry any United States resale or transfer restrictions under applicable United States Securities Laws;
(h) it shall allow and assist the Agent to participate fully in the preparation of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment, as applicable, and shall allow the Agent to conduct all “due diligence” investigations which the Agent may reasonably require to fulfill the Agent’s obligations as Agent and to enable the Agent responsibly to execute any certificate required to be executed by the Agent and it shall comply with all requests for additional information on the part of the SEC or any Canadian Securities Commission to the reasonable satisfaction of the Agent;
(i) it will comply with the Securities Laws in each of the Qualifying Jurisdictions it will promptly inform the Agent in writing of the full particulars of any material change, actual, anticipated or threatened, in the operating or financial condition of the Corporation or of any change in any material fact contained or referred to in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, and of the existence of any material fact which is, or may be, of such a nature as to render the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, untrue, false or misleading in a material respect or result in a misrepresentation. The Corporation shall, to the satisfaction of the Agent and its counsel, acting reasonably, promptly comply with all applicable filings and other requirements under the Securities Laws as a result of such change. The Corporation shall, in good faith, first discuss with the Agent any change in circumstances (actual or proposed, within the Corporation’s knowledge) which is of such a nature that there is reasonable doubt whether notice need be given to the Agent pursuant to this Section 2(i) and, in any event, prior to making any filing referred to in this Section 2(i). For greater certainty, it is understood and agreed that if the Agent determines, after consultation with the Corporation, that a material change or change in a material fact has occurred which makes untrue or misleading any statement of a material fact contained in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, or which may result in a misrepresentation, the Corporation will:
i. | prepare and file promptly any Amendment which in its opinion, acting reasonably, may be necessary or advisable after consultation with the Agent; and |
ii. | contemporaneously with filing the Amendment under the Securities Laws, the Corporation will deliver to the Agent: |
(A) an originally signed copy of the Amendment;
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(B) an originally signed copy of all documents relating to the proposed distribution of the Units and filed with the Amendment under Securities Laws; and
(C) such other documents as the Agent shall reasonably require;
(j) it will advise the Agent, promptly after receiving notice thereof, of the time when the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment or Supplementary Material has been filed and receipts have been obtained and will provide evidence satisfactory to the Agent of each filing and the issuance of receipts;
(k) it will advise the Agent, promptly after receiving notice or obtaining knowledge, of:
i. | the issuance by any Securities Commission of any order suspending or preventing the use of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Supplementary Material; |
ii. | the suspension of the qualification of the Units, or, if applicable, the Over-Allotment Units for offering or sale in any of the Selling Jurisdictions; |
iii. | the institution, threatening or contemplation of any proceeding for any of those purposes; or |
iv. | any requests made by any Securities Commission for amending or supplementing the U.S. Preliminary Prospectus, the U.S. Prospectus or the Registration Statement or for additional information, and will use its commercially reasonable efforts to prevent the issuance of any such order and, if any such order is issued, to obtain the withdrawal of the order promptly; |
(l) it will use commercially reasonable efforts to promptly do, make, execute, deliver or cause to be done, made, executed or delivered, all such acts, documents and things as the Agent may reasonably require from time to time for the purpose of giving effect to this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement and take all such steps as may be reasonably within their power to implement to their full extent the provisions of this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement;
(m) it is not an “ineligible issuer” as defined under Rule 405 under the U.S. Securities Act;
(n) it does not have any outstanding debt securities that are rated by any “nationally recognized statistical rating organization”, as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Act or by the DBRS rating agency in Canada;
(o) it will ensure that a sufficient number of Common Shares are allotted and reserved for issuance upon the exercise of the Warrants, and the Broker Warrants;
(p) it will ensure that the Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
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(q) it will ensure that the Broker Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
(r) it will ensure that the Warrant Shares issuable upon the exercise of the Warrants and the Broker Shares issuable upon the exercise of the Broker Warrants shall, upon issuance in accordance with their terms or the terms of the Warrant Indenture, as applicable, without limitation, including payment of the exercise price therefor, be duly issued as fully paid and non-assessable shares of the Corporation;
(s) it will make all necessary filings, obtain all necessary regulatory consents and approvals (if any) and the Corporation will pay all filing fees required to be paid in connection with the transactions contemplated in this Agreement;
(t) subject to compliance with applicable laws, any press release of the Corporation relating to the Offering will be provided in advance to the Agent and the Corporation will agree to the form and substance thereof with the Agent prior to the release thereof;
(u) it shall use commercially reasonable efforts to maintain the Registration Statement or post-effective amendment thereto effective under the U.S. Securities Act until the earlier of: (i) the date that all of the Unit Shares, Warrants and Warrant Shares registered pursuant to the Registration Statement have been sold pursuant to such Registration Statement or Rule 144 under the U.S. Securities Act , if available, or (ii) the date that is 48 months from the Closing Date;
(v) it will file promptly all reports and any definitive proxy or information statements required to be filed by the Corporation with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the U.S. Exchange Act subsequent to the date of the U.S. Prospectus and for so long as the delivery of the U.S. Prospectus is required in connection with the offering or sale of the Units and Over-Allotment Units or the terms of this Agreement;
(w) it will not for a period commencing the date that this Agreement is signed and for two years thereafter to remain a reporting issuer under Canadian Securities Laws in the Canadian Qualifying Jurisdictions, not in default of any requirement of such Canadian Securities Laws, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be a “reporting issuer” so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(x) it will not take any action for a period commencing on the Closing Date and for two years thereafter which would reasonably be expected to result in the delisting or suspension of its Common Shares on or from the TSX or on or from any securities exchange, market or trading or quotation facility on which its Common Shares are then listed or quoted, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be listed on the TSX so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(y) it will not, and will use its commercially reasonable efforts to ensure that each of the Corporation or the Subsidiaries or any of their respective officers, directors or employees, as the case may be, do not, bid for or purchase, for their own account or any account in which they have a beneficial interest, any Common Shares or any securities exchangeable or exercisable for or convertible into Common Shares after the date hereof until the Closing Date without the written consent of the Agent;
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(z) it has not engaged in, nor will it engage in, any directed selling efforts (as defined in Regulation S) in connection with the offer and sale of the Units;
(aa) no forward looking statement (within the meaning of Section 27A of the U.S. Securities Act) included or incorporated by reference in the Registration Statement, the U.S. Preliminary Prospectus or the U.S. Prospectus, has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith;
(bb) it will duly execute and deliver the Subscription Agreements and the certificates representing the Warrants and the Broker Warrants, at the Closing Time, and comply with and satisfy all terms, conditions and covenants therein contained to be complied with or satisfied;
(cc) it will use commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Time, each of the conditions required to be fulfilled by it under Section 8;
(dd) it will use the net proceeds of the Offering for working capital and general corporate purposes;
(ee) it will ensure that all necessary notices and filings will have been made before the Closing Time and that all necessary consents, approvals and authorizations will have been obtained by the Corporation from the TSX to ensure that the Unit Shares, Warrant Shares and Broker Shares will be listed on the TSX upon and at the time of their issuance; and
(ff) it will ensure that all information (including, without limitation, financial information) and statements (except information and statements relating solely to the Agent) relating to the Corporation provided to the Agent and the Purchasers will be true and correct in all material respects at the time of delivery thereof and will not contain any misrepresentation and will constitute full, true and plain disclosure of all material facts relating to the Corporation, and that no material fact or information will be omitted therefrom which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the circumstances under which they were made.
3. Additional Covenants of the Corporation. In addition to any other covenant of the Corporation set forth in this Agreement, the Corporation covenants with the Agent that:
(a) Due Diligence. The Agent will be permitted to conduct reasonable due diligence based on information disclosed publicly by the Corporation (including in filings made under the Corporation’s SEDAR profile), and shall have the right to request certain non-public material information with respect to the Corporation and its principal assets as reasonably required by the Agent in order to permit an appropriate due diligence investigation of the business and affairs of the Corporation and its Subsidiaries and affiliates in the context of the Offering. The Agent may request that the Corporation provide clarifications to questions of the Agent arising from the Agent’s review of such information. The Agent may also request, upon reasonable prior notice, a telephone call with representatives of the Corporation prior to Closing to confirm whether any non-public adverse material information has arisen which would require disclosure prior to Closing. The Corporation will make available to the Agent, on a timely basis, all corporate, business and operating records, financial information, financial statements, information concerning the direct and indirect beneficial ownership of its securities, budgets and other information in its possession and which the Agent may reasonably request concerning the Corporation and its subsidiaries, as well as access to key officers of the Corporation and to advisors and experts retained by the Corporation in order to enable the Agent to complete its due diligence investigation. From the effective date hereof to the Closing Time, it will promptly provide to the Agent, for review by the Agent and the Agent’s counsel, prior to filing or issuance of the same, any proposed public disclosure document, including without limitation, any financial statements of the Corporation, report to shareholders, information circular or any press release or material change report, subject to the Corporation’s obligations under applicable Securities Laws to make timely disclosure of material information, and the Agent agrees to keep such information confidential until it is disseminated into the marketplace;
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(b) Material Change during Distribution Period. During the period from the date of this Agreement until the completion of distribution of the Units pursuant to this Agreement, the Corporation shall promptly notify the Agent of the full particulars in writing of:
(i) any material change (actual, anticipated, contemplated or threatened, financial or otherwise) in the business, financial condition, affairs, operations, assets, liabilities, obligations (contingent or otherwise), or capital of the Corporation or any Subsidiary;
(ii) any occurrence of a material fact or the discovery of an existing material fact which, in any such case, is, or may be, of such nature as to (A) render any part of the Public Record untrue, false or misleading in any material respect, (B) result in a misrepresentation contained in any part of the Public Record, or (C) result in any part of the Public Record not materially complying with Securities Laws;
(iii) any change in any material fact contained in or referred to in any part of the Public Record not already reflected in the Public Record; or
(iv) any other event, state of facts or circumstance which is, or may be, or has occurred after the date of this Agreement, of such nature as to render any part of the Public Record untrue or misleading in any material respect or which would result in any misrepresentation in any part of the Public Record or which would reasonably be expected to have a significant effect on the market price of the Common Shares;
(c) Regulatory Notice. From the date hereof until the Closing Date, the Corporation will notify the Agent of any notice or other correspondence received by the Corporation from any Governmental Authority requesting any information, meeting or hearing relating to the Corporation, the business of the Corporation, the Offering or any other event or state of affairs that the Corporation reasonably believes may be material to the Agent or the holders of Common Shares. During the period commencing on the date hereof and ending on the completion of the distribution of the Units hereunder, the Corporation will inform and provide all necessary information to the Agent, promptly after receiving notice, or obtaining knowledge of the occurrence or any threat or any announcement, of:
(i) any request of any Securities Commission for any information, meeting or hearing relating to the Corporation, the Common Shares or the Offering or any amendment to any part of the Public Record or for any material additional information; or
(ii) the issuance by any Securities Commission, the TSX or any other competent authority of any order to cease or suspend trading of any securities of the Corporation or of the institution or threat of institution of any proceedings for that purpose or any notice of investigation that could potentially result in an order to cease or suspend trading.
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The Corporation will use its best efforts to prevent the issuance of any such cease-trading order, and, if issued, shall forthwith take all reasonable steps in order to obtain the withdrawal thereof as soon as possible;
(d) Private Placement. As soon as reasonably possible, and in any event by the Closing Date, the Corporation shall take all such steps as may reasonably be requested by the Agent and their counsel to enable the Common Shares and Warrants comprising the Units to be offered for sale and sold on a private placement basis to Purchasers in the Qualifying Jurisdictions that qualify for a prospectus exemption under the applicable Securities Laws through the Agent or any other investment dealers or brokers registered in any of the Qualifying Jurisdictions by way of the exemptions set forth in applicable Securities Laws of each of the Qualifying Jurisdictions;
(e) Covenants. The Corporation will duly, faithfully and punctually perform all the obligations to be performed by it and comply with its covenants and agreements hereunder and under the Subscription Agreements;
(f) Other Filings. The Corporation will make all necessary filings, obtain all necessary regulatory consents and approvals (if any) and the Corporation will pay all filing fees required to be paid in connection with the transactions contemplated in this Agreement; and
(g) Dealings. The Corporation will not, during the period commencing on the date hereof and ending on the Closing Date, (i) enter into any discussion with any other investment dealer or broker concerning any equity or convertible debt offering or other financing by or involving the Corporation, or (ii) offer to sell, or solicit any offer to sell, any material assets or undertakings of the Corporation, without the prior consent of the Agent (not to be unreasonably withheld or delayed). Nothing in this Section shall operate in any way so as to prohibit, prevent or impair the directors of the Corporation from exercising or complying with their fiduciary duties.
4. Agent’s Covenants. The Agent covenants with the Corporation, and acknowledges that the Corporation is relying on such covenants, that;
(a) it will offer the Units, and, if applicable, the Over-Allotment Units for sale to the public only in the Qualifying Jurisdictions on behalf of the Corporation, directly and through other investment dealers and brokers (the Agent, together with such other investment dealers and brokers, are referred to herein as the “Selling Firms”), only as permitted by applicable Securities Laws, upon the terms and conditions set forth this Agreement. The Agent may also offer and sell the Units and, if applicable, the Over-Allotment Units outside of Canada and the United States in a manner which is exempt from the prospectus and registration requirements of any such jurisdiction. The Agent covenants and agrees it will not, directly or indirectly, offer the Units or, if applicable, Over-Allotment Units, for sale nor sell the Units or, if applicable, Over-Allotment Units, in any jurisdiction, other than the Selling Jurisdictions, that would require the filing of a prospectus, registration statement, offering memorandum or similar document or would result in the Corporation having any reporting or other obligation in such jurisdiction;
(b) the Agent will use its best efforts to complete the distribution of the Offered Units, and, if applicable, the Over-Allotment Units as promptly as possible and will notify the Corporation when, in its opinion, the distribution of the Units, and, if applicable, the Over-Allotment Units shall have ceased and provide a breakdown of the number of Offered Units, and, if applicable, the Over-Allotment Units distributed in each Qualifying Jurisdiction where such breakdown is required for the purpose of calculating fees payable to a Securities Commission or other securities regulatory body;
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(c) the Agent will cause each purchaser to execute a selling securityholder form (a “Selling Securityholder Form”) which shall be completed to provide information and indemnification as is customarily provided by selling securityholders, and Agent shall provide the Corporation copies of each such Selling Security Form no later than two (2) days prior to filing of the U.S. Preliminary Prospectus;
(d) it will not make use of any “greensheet” in respect of the Corporation and the Offering without the prior written approval of the Corporation, acting reasonably, and in compliance with all applicable laws (including Securities Laws);
(e) it will not make any representations or warranties with respect to the Corporation or the Units or, if applicable, Over-Allotment Units, other than as set forth in this Agreement, the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, any Amendment or otherwise, as applicable, with the prior written approval of the Corporation;
(f) provided that it is otherwise satisfied, in its sole discretion, it will execute and deliver to the Corporation the certificate required to be executed by the Agent under applicable Securities Laws in connection with the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, as applicable, and any Amendment;
(g) the Agent will offer and sell the Units, Unit Shares or Warrants outside the United States only in accordance with Rule 903 of Regulation S under the U.S. Securities Act;
(h) the Agent has not engaged in, nor will it engage in, any directed selling efforts (as defined in Regulation S) in connection with the offer and sale of the Units;
(i) the Agent will not distribute either directly or indirectly any of the Unit Shares, Warrants or Warrant Shares in the United States or to, or for the account or benefit of, a U.S. person (as defined in Regulation S, a “U.S. Person”) or person in the United States; except pursuant to registration under the U.S. Securities Act or pursuant to an available exemption from registration under the U.S. Securities Act;
(j) the Agent will not engage in hedging transactions in the Unit Shares, Warrants or Warrant Shares except in compliance with the U.S. Securities Act;
(k) the Agent agrees that prior to the expiration of the one-year distribution compliance period set forth in Rule 903(b)(3) of Regulation S under the U.S. Securities Act with regard to the Unit Shares, Warrants or Warrant Shares, it will not offer, sell or transfer, directly or indirectly, any of the Unit Shares, Warrants or Warrant Shares except in accordance with the provisions of Regulation S, pursuant to registration under the U.S. Securities Act or pursuant to an available exemption from registration under the U.S. Securities Act;
(l) the Agent understands and acknowledges that the Unit Shares, Warrants or Warrant Shares are “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and that if in the future it decides to offer, resell, pledge or otherwise transfer any of such securities, such securities may be offered, resold, pledged or otherwise transferred, directly or indirectly, only (i) to the Corporation; (ii) pursuant to an effective registration statement under the U.S. Securities Act; (iii) in accordance with Rule 144 under the U.S. Securities Act, if available, and, in each case, in compliance with any applicable securities laws of any state of the United States; (iv) in accordance with Regulation S under the U.S. Securities Act; or (v) pursuant to another exemption from the registration requirements under the U.S. Securities Act and any applicable securities laws of any state of the United States, after providing an opinion of counsel, of recognized standing, in form and substance reasonably satisfactory to the Corporation, to the effect that the proposed transfer may be effected without registration under the U.S. Securities Act; and
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(m) the Agent acknowledges and agrees that the Corporation is hereby bound by this Agreement and its agreements with its transfer agent to refuse to register any transfer of the Unit Shares, Warrants or Warrant Shares not made in accordance with Regulation S, pursuant to registration under the U.S. Securities Act or pursuant to an available exemption from registration under the U.S. Securities Act and in compliance with any applicable local laws and regulations.
5. Representations and Warranties of the Corporation. The Corporation represents and warrants to the Agent and to the Purchasers, and acknowledges that each of them is relying upon such representations and warranties in acting as agent, in the case of the Agent, and in purchasing the Units under the Offering, in the case of the Purchasers, that:
Prospectus
(a) The delivery to the Agent of the U.S. Preliminary Prospectus, U.S. Prospectus and Registration Statement shall constitute the representation and warranty of the Corporation to the Agent and the U.S. Affiliates that: (i) each such document at the time of its respective delivery fully complied in all material respects with the requirements of the Securities Laws pursuant to which it was or is prepared, and, as applicable, filed, and that all the information and statements contained therein are at the respective dates of delivery thereof, true and correct, in all material respects, contain no misrepresentation and constitute full, true and plain disclosure of all material facts relating to the Corporation and the Subsidiaries, taken together, and the Units and the Over-Allotment Units as required by applicable Securities Laws; and (ii) no material fact or information has been omitted from such disclosure which is required to be stated in such disclosure or is necessary to make the statements or information contained in such disclosure not misleading in the light of the circumstances under which they were made.
Registration Statement
(b) A registration statement on Form S-1 together with amendments to the Registration Statement (collectively, the “Initial Registration Statement”) in respect of the Units, Over-Allotment Units, as applicable, the Broker Warrants and the Broker Shares shall be filed with the SEC under the U.S. Securities Act; the Corporation shall use its commercially reasonable efforts to cause the Initial Registration Statement and any post-effective amendment thereto delivered, each in the form as shall be delivered to the Agents, to be declared effective by the SEC in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under the U.S. Securities Act, no other document with respect to the Initial Registration Statement shall be filed with the SEC; no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the SEC.
(c) The Corporation consents to the use by the Agent of such documents in connection with the distribution of the Units and the Over-Allotment Units in the United States in compliance with the provisions of this Agreement.
General Matters
(d) The Corporation has been duly incorporated and is validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and capacity and is duly qualified and holds all certificates, authority, permits and licenses issued by the appropriate provincial, municipal, federal regulatory agencies or bodies necessary (and has not received or is not aware of any modification or revocation to such licences, authority, certificates or permits) to carry on its business as now conducted and to own its properties and assets and the Corporation has all requisite corporate power and authority to execute and deliver the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment and carry out its obligations under this Agreement.
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(e) The Corporation is considered a domestic issuer under U.S. Securities Laws.
(f) The Common Shares are registered under Section 12(g) of the U.S. Exchange Act and the Corporation has timely filed all required reports under the U.S. Exchange Act with the SEC and such filings are accurate and complete, and comply with all applicable form requirements, in all material respects. The Corporation meets all applicable qualification requirements to file a registration statement on Form S-1 with the SEC.
(g) The Corporation has no subsidiaries other than the Subsidiaries.
(h) 0896800 is validly existing under the laws of the Province of British Columbia and the Corporation beneficially owns 100% of the issued and outstanding shares of 0896800 free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands of any kind whatsoever, all of such shares have been duly authorized and validly issued and are outstanding as fully paid and non-assessable shares and no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the purchase from the Corporation of any interest in any of such shares or for the issue or allotment of any unissued shares in the capital of 0896800 or any other security convertible into or exchangeable for any such shares.
(i) 0896800 (i) has been duly incorporated in the Province of British Columbia and is up-to-date in all material corporate filings and in good standing under the laws of the Province of British Columbia and (ii) has all requisite corporate power and capacity to carry on its businesses as now conducted and to own, lease and operate its properties and assets.
(j) ECRC is validly existing under the laws of the State of Nebraska and 0896800 beneficially owns 100% of the issued and outstanding shares of ECRC free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands of any kind whatsoever, all of such shares have been duly authorized and validly issued and are outstanding as fully paid and non-assessable shares and no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the purchase from 0896800 of any interest in any of such shares or for the issue or allotment of any unissued shares in the capital of ECRC or any other security convertible into or exchangeable for any such shares.
(k) ECRC (i) has been duly incorporated in the State of Nebraska and is up-to-date in all material corporate filings and in good standing under the laws of the State of Nebraska and (ii) has all requisite corporate power and capacity to carry on its businesses as now conducted and to own, lease and operate its properties and assets.
(l) No proceedings have been taken, instituted or, are pending for the dissolution or liquidation of the Corporation or any Subsidiary.
(m) The Corporation and each Subsidiary have conducted and are conducting their businesses in material compliance with all applicable laws and regulations of each jurisdiction in which they carry on business (including all applicable federal, provincial, state, municipal licensing laws, regulations and other lawful requirements of any governmental or regulatory body) and are licensed, registered or qualified in all jurisdictions in which they own, lease or operate their property or carry on business to enable their business to be carried on as now conducted and proposed to be conducted and assets to be owned, leased and operated and all such licences, registrations and qualifications are valid, subsisting and in good standing and neither the Corporation nor any Subsidiary has received a notice of non-compliance, nor know of, nor have reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations or permits.
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(n) The Corporation is not aware of any pending or contemplated change to any applicable law or regulation or governmental position that would have a Material Adverse Effect on the Corporation or any Subsidiary or would materially adversely affect the business of the Corporation or any Subsidiary.
(o) All consents, approvals, permits, authorizations or filings as may be required under applicable legislation and other relevant laws in the Qualifying Jurisdictions necessary for the execution and delivery of this Agreement, the Subscription Agreements and the completion of the transactions contemplated hereby and thereby (including the issuance and sale of the Units and any Over-Allotment Units, the issuance of the Warrant Shares upon the exercise of the Warrants and the issuance of the Broker Shares upon exercise of the Broker Warrants) have been made or obtained, as applicable, other than in respect of those filings which are required to be made upon completion of the transactions contemplated hereby or thereby.
(p) The execution and delivery of this Agreement and the Subscription Agreements, the performance by the Corporation of its obligations hereunder and thereunder, the issue and sale of the Units, the Over-Allotment Units and the Broker Warrants and the consummation of the transactions contemplated hereby do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (A) any statute, rule or regulation applicable to the Corporation including applicable laws and other relevant corporate and securities laws in the Qualifying Jurisdictions; (B) the constating documents, articles, notice of articles or resolutions of the Corporation and its shareholders that are in effect at the date hereof; (C) any Debt Instrument or Material Agreement; or (D) any judgment, decree or order binding the Corporation or any Subsidiary or the property or assets of the Corporation or any Subsidiary.
(q) Neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except where such violation or default in performance would not have a Material Adverse Effect.
(r) This Agreement and the Subscription Agreements have been, and the Warrant Indenture will be on the Closing Date, duly authorized, executed and delivered by the Corporation.
(s) At the Closing Time, the Corporation will have the corporate power, capacity and authority to issue, sell and deliver the Unit Shares, the Warrants, the Warrant Shares that may be issued upon the exercise of the Warrants, the Broker Warrants and the Broker Shares that may be issued upon the exercise of the Broker Warrants, to grant the Over-Allotment Option and to enter into and perform its obligations under this Agreement and the Subscription Agreement.
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(t) At the Closing Time: (i) the Unit Shares; (ii) the Warrants; and (iii) the Broker Warrants, will in each case have been duly authorized for issuance and sale pursuant to this Agreement and will be validly issued as fully paid and non-assessable and the Over-Allotment Option has been duly and validly created and authorized.
(u) When issued and delivered by the Corporation pursuant to this Agreement or the Broker Warrants, as applicable, against payment of the consideration set forth therein: (i) the Warrant Shares that may be issued upon the exercise of the Warrants; and (ii) the Broker Shares that may be issued upon the exercise of the Broker Warrants, will in each case be validly issued as fully paid and non-assessable.
(v) The Financial Statements have been prepared in accordance with U.S. GAAP consistently applied throughout the periods referred to therein, contain no misrepresentation and present fairly, in all material respects, the financial position (including the assets and liabilities, whether absolute, contingent or otherwise) of the Corporation or the Subsidiaries, as applicable, as at such dates and results of operations of the Corporation and the Subsidiaries, as applicable, for the periods then ended and there has been no material change in accounting policies or practices of the Corporation or the Subsidiaries since those respective financial periods, except as disclosed in the notes to the Financial Statements.
(w) Neither the Corporation nor any of its Subsidiaries is a party to or bound by any material agreement of guarantee, indemnification or any other like commitment (other than an indemnification of directors and officers in accordance with the by-laws of the Corporation and applicable laws, indemnification obligations in favour of agents or Agents of securities offerings, indemnification obligations of the transfer agents or guarantee, or indemnification obligations in the ordinary course of its business) of the obligations, liabilities (contingent or otherwise) or indebtedness of any other person other than the Corporation or a Subsidiary.
(x) Neither the Corporation nor any Subsidiary has any liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the Financial Statements or referred to or disclosed herein, other than liabilities or obligations which would not have a Material Adverse Effect.
(y) There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations) or other relationships of the Corporation or any Subsidiary with unconsolidated entities or other persons that could reasonably be expected to have a Material Adverse Effect on the Corporation or the Subsidiaries on a consolidated basis.
(z) There has been no adverse material change (actual, proposed or prospective, whether financial or otherwise) in the business, affairs, operations, assets, liabilities (absolute, accrued, contingent or otherwise) or capital stock or long-term debt of the Corporation or any Subsidiary on a consolidated basis since June 30, 2016 which has not been generally disclosed to the public and the business of the Corporation and each Subsidiary have been carried on in the usual and ordinary course.
(aa) The Corporation and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the carrying values for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(bb) The Corporation’s present and former auditors of the Corporation who audited or reviewed, as applicable, the Financial Statements and who provided their respective audit reports thereon are independent public accountants as required under Canadian Securities Laws.
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(cc) There has never been a “reportable event” (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations) between the Corporation and the present or former auditors of the Corporation and the Corporation’s Auditors have not provided any material comments or recommendations to the Corporation regarding its accounting policies, internal control systems or other accounting or financial practices that have not been implemented by the Corporation.
(dd) The Corporation maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the U.S. Exchange Act) that comply with the requirements of the U.S. Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Corporation and the Subsidiaries is made known to the Corporation’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.
(ee) The assets of the Corporation and the Subsidiaries and their respective businesses and operations are insured against loss or damage with responsible insurers to the extent and in the amounts consistent with insurance obtained by reasonably prudent participants in comparable businesses and such coverage is in full force and effect, and the Corporation and the Subsidiaries have not breached the terms of any policies in respect thereof nor failed to promptly give any notice or present any material claim thereunder.
(ff) All taxes (including income tax, capital tax, payroll taxes, employer health tax, workers’ compensation payments, property taxes, customs duties and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable or required to be collected or withheld and remitted, by the Corporation and the Subsidiaries have been paid, collected or withheld and remitted as applicable. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate governmental authorities and all such returns, declarations, remittances and filings are materially complete and accurate and no material fact or facts have been omitted therefrom that would make any of them misleading. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any governmental authority respecting any Taxes that have been paid, or may be payable, by the Corporation or any Subsidiary, and there are no agreements, waivers or other arrangements with any taxation authority providing for an extension of time for any assessment or reassessment of Taxes with respect to the Corporation or any Subsidiary.
(gg) Except as may be disclosed in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment, there is not, in the constating documents, by-laws or in any Debt Instrument, Material Agreement, or other instrument or document to which the Corporation or any Subsidiary is a party, any restriction upon or impediment to, the declaration or payment of dividends by the directors of the Corporation or the payment of dividends by the Corporation to the holders of Common Shares.
(hh) None of the Corporation or any Subsidiary is party to or bound or affected by any commitment, agreement or document containing any covenant that expressly limits the freedom of the Corporation or any Subsidiary to compete in any line of business, transfer or move any of its assets or operations or that materially or adversely affects the business practices, operations or condition of the Corporation and the Subsidiaries taken as a whole.
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(ii) Neither the Corporation nor any Subsidiary is party to any Debt Instrument or any agreement, contract or commitment to create, assume or issue any Debt Instrument or has any material loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at arm’s length (as such term is defined in the Income Tax Act (Canada)) with the Corporation.
(jj) The Material Agreements are the only material contracts (as defined under Canadian Securities Laws) of the Corporation and the Subsidiaries on a consolidated basis. All of the Material Agreements and Debt Instruments of the Corporation and of the Subsidiaries have been disclosed in the Disclosure Documents and each is valid, subsisting, in good standing and in full force and effect, enforceable in accordance with the terms thereof. The Corporation and each Subsidiary have performed all obligations (including payment obligations) in a timely manner under, and are in material compliance with, all terms, conditions and covenants (including all financial maintenance covenants) contained in each Material Agreement and Debt Instrument. Neither the Corporation nor any Subsidiary is in violation, breach or default and neither has received any notification from any party claiming that the Corporation or any Subsidiary is in breach, violation or default under any Material Agreement or Debt Instrument and no other party, to the knowledge of the Corporation, is in breach, violation or default of any term under any Material Agreement or Debt Instrument;
(kk) None of the Corporation or any Subsidiary are party to any agreement, nor is the Corporation aware of any agreement, which in any manner affects the voting control of any of the securities of the Corporation or any Subsidiary.
(ll) The authorized capital of the Corporation consists of an unlimited number of Common Shares, of which as of the date hereof (and prior to giving effect to the Offering), 196,330,021 Common Shares are issued and outstanding as fully paid and non-assessable.
(mm) The share capital of 0896800 consists of an unlimited number of common shares, of which as of the date hereof, 18,990,539 common shares are issued and outstanding as fully paid and non-assessable, and all of such shares are held by the Corporation.
(nn) The share capital of ECRC consists of 1,000,000 common shares, of which as of the date hereof, 100 common shares are issued and outstanding as fully paid and non-assessable, and all of such shares are held by 0896800.
(oo) The forms of certificates respecting the Unit Shares, Warrants and Broker Warrants, if applicable, have been or will be approved and adopted by the board of directors of the Corporation prior to the Closing Time and will not conflict with any applicable laws and comply with the rules and regulations of the TSX as at the Closing Time.
(pp) No holder of outstanding securities of the Corporation is entitled to any pre-emptive or any similar rights to subscribe for any securities of the Corporation and no rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any security in the capital of the Corporation are outstanding other than as set out in Schedule “A” hereto.
(qq) The Corporation has not, directly or indirectly, declared or paid any dividend or declared or made any other distribution on any of its securities or, directly or indirectly, redeemed, purchased or otherwise acquired any of its securities or agreed to do any of the foregoing other than as has been publicly disclosed.
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(rr) the Corporation is a reporting issuer in good standing in each of the Qualifying Jurisdictions, and (i) has no reasonable grounds to believe that it will not continue to be a reporting issuer in good standing in each such jurisdiction for at least two years from the Closing, (iii) is in compliance, including with respect to the Public Record, with all applicable Securities Laws in all respects, except where any such non-compliance, whether individually or in the aggregate, has not resulted in and would not reasonably be expected to result in a Material Adverse Effect, (iv) no portion of the Public Record, as of the respective dates of the documents contained therein, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading as of the date made, and (v) has not filed any confidential material change reports.
(ss) The issued and outstanding Common Shares are listed for trading on the TSX and no order ceasing or suspending trading in any securities of the Corporation or the trading of any of the Corporation’s issued securities is currently outstanding or threatened and no proceedings for such purpose are, to the knowledge of the Corporation, pending. As of the Closing Date, the Unit Shares, Warrant Shares and Broker Shares will be conditionally approved for listing on the TSX, subject to satisfaction of the usual conditions imposed by the TSX.
(tt) Neither the Corporation nor any Subsidiary has taken any action which would reasonably be expected to result in the delisting or suspension of trading of the Common Shares on the TSX and the Corporation is currently in compliance with the rules and regulations of the TSX.
(uu) Other than as set forth in the Public Record, none of the directors, officers or employees of the Corporation or any Subsidiary, any known holder of more than 10% of any class of shares of the Corporation, or any known associate or affiliate of any of the foregoing persons or companies, has had any material interest, direct or indirect, in any material transaction within the previous two years or has any material interest in any proposed material transaction involving the Corporation which, as the case may be, materially affected, is material to or will materially affect the Corporation and the Subsidiaries (taken as a whole).
(vv) The Corporation does not have in place a shareholder rights protection or similar plan and neither the Corporation, nor any of its shareholders is a party to any shareholders agreement, pooling agreement, voting trust or other similar type of arrangements in respect of outstanding securities of the Corporation.
(ww) No officer, director, employee or any other person not dealing at arm’s length with the Corporation or its Subsidiaries, or any associate or affiliate of such person, owns, has or is entitled to any royalty, net profits interest, carried interest, licensing fee, or any other encumbrances or claims of any nature whatsoever which are based on the revenues of the Corporation or its Subsidiaries.
(xx) There are no judgments against the Corporation or any Subsidiary that are unsatisfied, nor are there any consent decrees or injunctions to which the Corporation or any Subsidiary is subject.
(yy) There are no actions, suits, proceedings or inquiries pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation or its property or assets at law or in equity or before or by any federal provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality.
(zz) Neither the Corporation nor any Subsidiary, nor, to the knowledge of the Corporation, any of the directors, officers, employees or agents of the Corporation or any Subsidiary, has made any bribe, payoff, influence payment, kickback or unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any law, or made any payment to any foreign, Canadian, United States or provincial or state governmental officer or official or other person charged with similar public or quasi-public duties, violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or the Corruption of Foreign Public Officials Act or any similar law, regulation or statute in any applicable jurisdictions.
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(aaa) Other than the Agent (and any group of investment dealers or selling group members working with the Agent for purposes of the Offering), there are no persons acting or purporting to act at the request or on behalf of the Corporation, that are entitled to any brokerage or finder’s fee in connection with the Offering.
(bbb) Other than the Corporation, there is no person that is or will be entitled to the proceeds of this Offering under the terms of any Debt Instrument, Material Agreement or otherwise.
(ccc) The Transfer Agent, at its principal offices in the City of Vancouver, British Columbia has been duly appointed as transfer agent and registrar in respect of the Common Shares and as warrant agent for the Warrants under the Warrant Indenture.
(ddd) With respect to each of the premises that are material to the Corporation or any Subsidiary and that the Corporation or any Subsidiary occupy as tenant (the “Leased Premises”), the Corporation and the Subsidiary occupy the Leased Premises and have the exclusive right to occupy and use the Leased Premises and each of the leases pursuant to which the Corporation or any Subsidiary occupy the Leased Premises is in good standing in all material respects and in full force and effect. The performance of obligations pursuant to and in compliance with the terms of this Agreement and the completion of the transactions described herein by the Corporation, will not afford any of the parties to such leases or any other person the right to terminate such lease or result in any additional or more onerous obligations under such leases.
Information Record and Due Diligence
(eee) The minute books and records of the Corporation and the Subsidiaries that the Corporation has made available to the Agent and its counsel, Owens Wright LLP, in connection with their due diligence investigation of the Corporation for the periods requested to the date of examination thereof, are all of the minute books and substantially all the material records of the Corporation for such period and contain copies of all material proceedings (or certified copies thereof) of the shareholders, the board of directors and all committees of the board of directors of the Corporation and each Subsidiary to the date of review of such corporate records and minute books. There have been no other material meetings, resolutions or proceedings of the shareholders, board of directors or any committees of the board of directors of the Corporation to the date of review of such corporate records and minute books not reflected in such minute books and other records or provided to Owens Wright LLP.
(fff) All information (including the Disclosure Documents) which has been prepared by the Corporation relating to the Corporation and the Subsidiaries and their respective businesses, properties and liabilities and either publicly disclosed or provided to the Agent, including all financial, marketing and operational information provided to the Agent, are as of the date of such information, true and correct in all material respects, do not contain a misrepresentation and no material fact or facts have been omitted therefrom that would make such information materially misleading and the Corporation is not aware of any circumstances presently existing under which liability is or would reasonably be expected to be incurred under Part XXIII.1 – Civil Liability for Secondary Market Disclosure of the Securities Act (Ontario) and analogous secondary market liability disclosure provisions under applicable Securities Laws in the Qualifying Jurisdictions.
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(ggg) With respect to forward-looking information contained in the Disclosure Documents:
i. | the Corporation had a reasonable basis for the forward-looking information at the time the disclosure was made; |
ii. | all forward-looking information is identified as such, and all such documents caution users of forward-looking information that actual results may vary from the forward-looking information and identifies material risk factors that could cause actual results to differ materially from the forward-looking information; and states the material factors or assumptions used to develop forward-looking information; |
iii. | all future-oriented financial information and each financial outlook: (A) has been prepared in accordance with U.S. GAAP, using the accounting policies the Corporation expects to use to prepare its historical financial statements for the period covered by the future-oriented financial information or the financial outlook; (B) presents fully, fairly and correctly in all material respects the expected results of the operations for the periods covered thereby; (C) is based on assumptions that are reasonable in the circumstances, reflect the Corporation’s intended course of action, and reflect management’s expectations concerning the most probable set of economic conditions during the periods covered thereby; and |
iv. | is limited to a period for which the information in the future-oriented financial information or financial outlook can be reasonably estimated; |
(hhh) All filings and fees required to be made and paid by the Corporation pursuant to applicable laws and general corporate and Securities Laws in the Qualifying Jurisdictions have been made and paid and such disclosure and filings were true and accurate in all material respects as at the respective dates thereof and the Corporation has not filed any confidential material change reports or similar confidential report with any Securities Commissions that are still maintained on a confidential basis.
(iii) The Corporation and each Subsidiary, as applicable, are the absolute legal and beneficial owner of, and have good and marketable title to, all of the material assets thereof, including the Properties, as described in the Disclosure Documents, free of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever, and the Corporation and the Subsidiaries know of no claim or basis for any claim that might or could adversely affect the right thereof to use, transfer or otherwise enforce such property rights, and the Corporation and the Subsidiaries have no responsibility or obligation to pay any commission, royalty, licence fee or similar payment to any person with respect to the property rights thereof other than as set forth in the Public Record.
(jjj) Any and all of the agreements and other documents and instruments pursuant to which the Corporation and the Subsidiaries hold their property and assets (including the Properties) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with the terms thereof, the Corporation and the Subsidiaries are not in default of any of the material provisions of any such agreements, documents or instruments nor has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the applicable jurisdictions, and all taxes required to be paid with respect to such properties and assets to the date hereof have been paid. The interests of the Corporation or any Subsidiary in, or rights of the Corporation or any Subsidiary to earn an interest in, any property or asset of the Corporation or any Subsidiary are not subject to any right of first refusal or purchase or acquisition rights.
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(kkk) there are no material restrictions on the ability of the Corporation to use and exploit all rights in the Intellectual Property required in the ordinary course of the Corporation’s businesses as currently conducted. None of the rights of the Corporation in the Intellectual Property will be impaired or affected in any way by the transactions contemplated by this Agreement.
(lll) the Corporation has not received any notice of infringement of the intellectual property of any third party and, to the knowledge of the Corporation, there are no material infringements of or conflicts with rights of others with respect to any of the Corporation’s Intellectual Property or of circumstances that would render any of the Corporation’s Intellectual Property invalid or inadequate to protect the interests of the Corporation therein, and which infringement or conflict (if subject to an unfavourable decision, ruling or finding) or invalidity or inadequacy would result in, or would reasonably be expected to result in, a Material Adverse Effect.
(mmm) the Corporation owns or has licensed all patents, trademarks, copyrights, industrial designs, software, trade secrets, know-how, concepts, information and other intellectual and industrial property (collectively, the “Intellectual Property”) necessary to permit the Corporation to conduct its business as currently conducted and as proposed to be conducted. The Corporation has not received any notice, nor does the Corporation have knowledge, of any infringement of or conflict with rights of others with respect to any Intellectual Property or of any facts or circumstances that would render any Intellectual Property invalid or inadequate to protect the interests of the Corporation therein and which infringement or conflict (if subject to an unfavourable decision, ruling or finding) or invalidity or inadequacy would result in, or would reasonably be expected to result in, a Material Adverse Effect.
(nnn) Except as disclosed in the Public Record, no auditor, consultant, or professional advisor of any kind, that has been or is currently retained by the Corporation, has expressed doubts regarding the Corporation’s ability to continue as a going concern.
(ooo) To the knowledge of the Corporation, there is no circumstance, fact, or information in existence that, by itself or on an aggregated basis, is expected to materially delay or impede the scheduled completion, operation, or production schedule at any mine on any of the Properties.
(ppp) The Corporation has entered into binding agreements with all local land owners that are, in the reasonable opinion of the Corporation, necessary with respect to any prospective mine or plant site contained on any of the Properties.
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(qqq) The Corporation and the Subsidiaries: (i) are in material compliance with any and all “Environmental Laws” (which term means and includes, without limitation, any and all applicable international, federal, provincial, territorial, state, municipal, national or local laws, statutes, regulations, treaties, orders, judgments, decrees, ordinances, official directives and all authorizations relating to the environment, occupational health and safety, or any environmental activity (which term means and includes, without limitation, any past, present or future activity, event or circumstance in respect of a Contaminant); (ii) have received all permits, licenses or other approvals, consents, certificates, registration and other authorizations required of them under applicable Environmental Laws (the “Environmental Permits”) to conduct its business as currently conducted and all such Environmental Permits are valid, subsisting and in good standing and neither the Corporation nor any Subsidiary is in material default or breach of any Environmental Permit, and to the best of the knowledge of the Corporation, no proceeding is pending or threatened to revoke or limit any Environmental Permit; and (iii) are in material compliance with all terms and conditions of any such Environmental Permits and no proceeding has been threatened or, to the best knowledge of the Corporation, is pending to revoke or limit any such Environmental Permits and the Properties, assets and operations thereof comply in all material respects with all applicable Environmental Laws; (iv) do not have any knowledge of, and have not received any notice of, any material claim, judicial or administrative proceeding, pending or threatened against, or which may affect, either the Corporation or any Subsidiary or any of the Properties, or the assets or operations thereof, relating to, or alleging any violation of any Environmental Laws, the Corporation has no knowledge of any facts which could reasonably be expected to give rise to any such claim or judicial or administrative proceeding and none of the Corporation, any Subsidiary, any of the Properties, or assets or operations thereof, is the subject of any investigation, evaluation, audit or review by any Governmental Authority to determine whether any violation of any Environmental Laws has occurred or is occurring or whether any remedial action is needed in connection with a release of any Contaminant into the environment, except for compliance investigations conducted in the normal course by any Governmental Authority; (v) do not store any hazardous or toxic waste or substance on the Properties and have not disposed of any hazardous or toxic waste, in each case in a manner contrary to any Environmental Laws, and to the knowledge of the Corporation, there are no Contaminants on any of the premises or Properties, in each case other than in compliance with Environmental Laws except where such non-compliance could not reasonably be expected to result in a Material Adverse Effect; and (vi) are not subject to any material contingent or other liability relating to the restoration or rehabilitation of land, water or any other part of the environment (except for those derived from normal exploration activities) or non-compliance with Environmental Law.
(rrr) The Corporation and the Subsidiaries are in material compliance in all respects with each license and permit held by it and are not in violation of, or in default under, the applicable statutes, ordinances, rules, regulations, orders or decrees (including, without limitation, Environmental Laws) of any governmental entities, regulatory agencies or bodies having, asserting, or claiming jurisdiction over it or over any part of its operations or assets.
(sss) The Corporation and the Subsidiaries have not used, except in material compliance with all Environmental Laws and Environmental Permits, any property or facility (including the Properties) which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any hazardous substance other than in the ordinary course of business.
(ttt) To the knowledge of the Corporation, neither the Corporation nor any Subsidiary, nor any predecessor companies, have received any notice of, or been prosecuted for an offence alleging, non-compliance with any laws, ordinances, regulations and orders, including Environmental Laws, and neither the Corporation nor any Subsidiary, nor any predecessor companies have settled any allegation of non-compliance short of prosecution. To the knowledge of the Corporation, there are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Corporation or any Subsidiary, nor has the Corporation or any Subsidiary received notice of any of the same.
(uuu) There have been no past unresolved, and to the knowledge of the Corporation there are no pending or threatened, claims, complaints, notices or requests for information received by the Corporation or any Subsidiary with respect to any alleged material violation of any Environmental Law; no conditions exist at, on or under any Property now or previously owned, operated or leased by the Corporation or any Subsidiary which, with the passage of time, or the giving of notice or both, would give rise to liability under any Environmental Law that, individually or in the aggregate, has or may reasonably be expected to have, a Material Adverse Effect.
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Employment Matters
(vvv) The Corporation and the Subsidiaries are in material compliance with all laws respecting employment and employment practices, terms and conditions of employment, occupational health and safety, pay equity and wages, all material employee plans have been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such employee plans, in each case in all material respects and has been publicly disclosed to the extent required by Securities Laws and all material accruals for unpaid vacation pay, premiums for unemployment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee benefit plan payments have been reflected in the books and records of the Corporation and/or any Subsidiary, as applicable.
(www) There is not currently any labour disruption, conflict, slowdown, stoppage, complaint or grievance threatened or pending against the Corporation or any Subsidiary which is adversely affecting or could adversely affect, in a material manner, the carrying on of the business of the Corporation or the Subsidiaries, on a consolidated basis and no union representation question exists respecting the employees of the Corporation and no collective bargaining agreement is in place or currently being negotiated by the Corporation.
(xxx) The Corporation is not aware of any intention on behalf of any officer of the Corporation to terminate their employment relationship with the Corporation.
(yyy) to the knowledge of the Corporation, no insider of the Corporation has the present intention to sell any securities of the Corporation.
General
(zzz) The Corporation has not withheld and will not withhold from the Agent prior to the Closing Time any material facts relating to the Corporation, the Subsidiaries or the Offering.
6. Representations, Warranties and Covenants of the Agent. The Agent hereby represents, warrants and covenants to the Corporation and acknowledges that the Corporation is relying upon such representations and warranties in connection with the Offering, that:
(a) In respect of the offer and sale of the Units, the Agent and its respective agents and representatives have complied with and will comply with all Securities Laws and all applicable laws of the jurisdictions outside Canada in which they offer Units and shall deliver to the Corporation at the Closing Time executed copies of Subscription Agreements and any other document required to be filed by the Corporation at such time under the laws of each of the Qualifying Jurisdictions in compliance with the Securities Laws and other applicable securities laws.
(b) The Agent will obtain from each Purchaser, a duly completed and executed Subscription Agreement.
7. Closing Deliveries. The Closing of the purchase and sale of the Units provided for in this Agreement shall be completed at the offices of Blake, Cassels & Graydon LLP in Vancouver at the Closing Time. At or before the Closing Time, the Corporation shall duly and validly deliver to the Agent certificates in definitive form representing the Unit Shares, Warrants and Broker Warrants registered as directed by the Agent in writing, against payment at the direction of the Corporation, in lawful money of Canada by certified cheque, banker’s draft or wire transfer payable at par in the City of Vancouver, of an amount equal to the aggregate Purchase Price for the Units being issued and sold hereunder less the Commission payable by the Corporation in accordance with Section 16 together with all of the estimated out-of-pocket expenses of the Agent payable by the Corporation to the Agent in accordance with Section 14.
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8. Agent’s Closing Conditions. Each Purchaser’s obligation to purchase the Units at the Closing Time shall be conditional upon the fulfilment at or before the Closing Time of the following conditions:
(a) the Agent shall have received certificates representing, in the aggregate, all of the Warrants registered in the name of the Purchasers or in such name or names as the Agent shall notify the Corporation in writing not less than 24 hours prior to the Closing Time;
(b) at the option of the Agent, definitive certificates representing, in the aggregate, all of the Unit Shares registered in the name of the Purchasers or in such name or names as the Agent shall notify the Corporation in writing not less than 24 hours prior to the Closing Time;
(c) the Agent shall have received certificates representing the Broker Warrants (including those Broker Warrants in connection with the Over-Allotment Units, if applicable) in form and substance satisfactory to the Agent, acting reasonably;
(d) the Agent shall have received favourable legal opinions addressed to the Agent, in form and substance satisfactory to the Agent’s counsel acting reasonably, dated as of the Closing Date and subject to customary qualifications, of counsel to the Corporation or from local counsel in the Qualifying Jurisdictions (it being understood that such counsel may rely to the extent appropriate in the circumstances, (i) as to matters of fact, on certificates of the Corporation executed on its behalf by a senior officer of the Corporation and on certificates of the Transfer Agent, as to the issued capital of the Corporation; and (ii) as to matters of fact not independently established, on certificates of the Corporation’s Auditors or a public official) with respect to the following matters:
i. | the Corporation is a company existing under the Business Corporations Act (British Columbia) and has all requisite corporate power and capacity to carry on its business as now conducted and to own, lease and operate its assets; |
ii. | the authorized and issued capital of the Corporation; |
iii. | the Corporation has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Subscription Agreements and the Warrant Indenture and to create, issue and sell the Units, Over-Allotment Units, Unit Shares (including the Unit Shares forming part of the Over-Allotment Units), Warrants (including the Warrants forming part of the Over-Allotment Units), Broker Warrants, and Broker Shares and to grant the Over-Allotment Option; |
iv. | the execution and delivery of this Agreement, the Subscription Agreements and the Warrant Indenture and the fulfilment of the terms thereof by the Corporation and the issuance, sale and delivery of the Units, Over-Allotment Units, Unit Shares (including the Unit Shares forming part of the Over-Allotment Units), Warrants (including the Warrants forming part of the Over-Allotment Units) or Broker Warrants by the Corporation at the Closing Time do not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will result in a breach of or default under, and do not and will not conflict with any of the terms, conditions or provisions of the articles or notice of articles of the Corporation or the Business Corporations Act (British Columbia); |
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v. | all necessary corporate action has been taken by the Corporation to authorize the execution and delivery of this Agreement, the Subscription Agreements and the Warrant Indenture and the performance of its obligations thereunder; and this Agreement, the Subscription Agreements and the Warrant Indenture have been executed and delivered by the Corporation and constitute legal, valid and binding obligations of the Corporation enforceable against it in accordance with their terms, subject to customary qualifications; |
vi. | (i) the Unit Shares (including the Unit Shares forming part of the Over-Allotment Units); (ii) the Warrants (including the Warrants forming part of the Over-Allotment Units); (iii) the Warrant Shares that may be issued upon the exercise of the Warrants; (iv) the Broker Warrants; and (v) the Broker Shares, will in each case have been duly authorized for issuance and sale pursuant to this Agreement, and the Unit Shares, Warrants and the Broker Warrants will, as applicable upon the issuance thereof, be validly issued as fully paid and non-assessable and the Over-Allotment Option has been duly and validly created and authorized; |
vii. | the Unit Shares, the Warrant Shares and the Broker Shares have been conditionally accepted for listing on the TSX subject only to the standard listing conditions; |
viii. | all necessary documents have been filed, all necessary proceedings have been taken and all necessary authorizations, approvals, permits, consents and orders have been obtained under Securities Laws to qualify the issuance, distribution and sale of the Units and the Over-Allotment Units in the Qualifying Jurisdictions by or through investment dealers or brokers duly registered under the applicable Securities Laws who comply with the relevant provisions of such laws and the terms of such registration and to qualify the grant of the Over-Allotment Option to the Agent; |
ix. | the Corporation is a reporting issuer in each of the Qualifying Jurisdictions and is not on any list of defaulting reporting issuers maintained by a Securities Commission in a Qualifying Jurisdiction; and |
x. | the form and terms of the definitive certificates representing the Unit Shares, Warrants and Broker Warrants, if applicable, have been approved and adopted by the Corporation and comply with the terms and conditions of the constating documents of the Corporation and all legal requirements applicable thereto, including any applicable rules of the TSX; |
(e) the Agent shall have received a favourable legal opinion addressed to the Agent, in form and substance satisfactory to the Agent’s counsel, acting reasonably, dated the Closing Date as to (i) the incorporation and subsistence of the Subsidiaries; (ii) the corporate power and capacity of the Subsidiaries to carry on their respective businesses as presently carried on and to own their properties and assets; and (iii) as to the authorized capital and registered ownership of the issued and outstanding shares of each Subsidiary;
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(f) the Agent shall have received an opinion from U.S. counsel to the Corporation, in form and substance reasonably satisfactory to the Agent and its counsel and addressed to the Agent confirming that it is not necessary in connection with the offer and sale of the Securities under the Agreements, solely in the manner contemplated by the Agreements, to register the Securities under the Securities Act of 1933;
(g) the Agent shall have received a form of opinion from U.S. counsel to the Corporation, to be delivered to the Agent promptly (but in no event later than three business days) following the effectiveness of the Registration Statement, in form and substance reasonably satisfactory to the Agent and its counsel and addressed to the Agent with respect to the following matters:
i. | the statements contained in the prospectus under the caption “Certain United States Federal Income Tax Considerations,” insofar as such statements purport to summarize provisions of United States federal income tax law, present fair summaries thereof in all material respects; and |
ii. | the Registration Statement has become effective under the Securities Act of 1933, and, to such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose are pending or threatened by the Securities and Exchange Commission; |
(h) the Agent shall have received certificates of status (or the equivalent) with respect to the Corporation and each Subsidiary dated the Business Day immediately prior to the Closing Date or such other date as the Corporation and the Agent may agree;
(i) the Agent shall have received confirmation to its satisfaction that each of the Unit Shares (including the Unit Shares forming part of the Over-Allotment Units), Warrants (including the Warrants forming part of the Over-Allotment Units), Warrant Shares and Broker Warrants, upon effectiveness of the Registration Statement, will not carry any United States resale or transfer restrictions under U.S. Securities Laws;
(j) the Agent shall have received a certificate, in form and substance acceptable to the Agent and its legal counsel, dated as of the Closing Date signed by the Chief Executive Officer or Chief Financial Officer of the Corporation (or such other officer or officers of the Corporation acceptable to the Agent, acting reasonably) with respect to:
i. | the constating documents of the Corporation; |
ii. | the resolutions of the Board of Directors of the Corporation related to the Offering, the allotment and sale of the Units and Over-Allotment Units, if applicable, the issuance of the Broker Warrants, the authorization of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, this Agreement, as applicable, and the Subscription Agreements and the other agreements and transactions contemplated by this Agreement; and |
iii. | the incumbency and signatures of signing officers of the Corporation; |
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(k) the Agent shall have received a certificate, in form and substance acceptable to the Agent and its legal counsel, dated as of the Closing Date signed by the Chief Executive Officer or Chief Financial Officer of the Corporation (or such other officer or officers of the Corporation acceptable to the Agent, acting reasonably), certifying for and on behalf of the Corporation and without personal liability, after having made due enquiries, that:
i. | no order, ruling or determination having the effect of suspending the distribution or ceasing the trading or prohibiting the distribution of the Units and Over-Allotment Units or any other securities of the Corporation (including the Common Shares) has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officers, contemplated or threatened by any regulatory authority; |
ii. | no stop order suspending the effectiveness of any of the U.S. Preliminary Prospectus, the U.S. Prospectus or the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to such officer’s knowledge, threatened; |
iii. | except as previously disclosed, there has been no material change (actual, anticipated, contemplated or threatened, whether financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise), prospects or capital of the Corporation on a consolidated basis; |
iv. | the representations and warranties of the Corporation contained in this Agreement, and in any certificates of the Corporation delivered pursuant to or in connection with this Agreement, are true and correct in all material respects as of the Closing Time as if such representations and warranties were made as at the Closing Time, after giving effect to the transactions contemplated hereby; and |
v. | the Corporation has complied in all material respects with all the covenants and satisfied in all material respects all the terms and conditions of this Agreement on its part to be complied with and satisfied at or prior to the Closing Time; |
(l) evidence satisfactory to the Agent, acting reasonably, that the Corporation has obtained all necessary approvals for the listing of the Unit Shares, Warrant Shares and Broker Shares on the TSX, subject only to satisfaction by the Corporation of standard listing conditions;
(m) the Agent shall have received a certificate from the Transfer Agent as to the number of Common Shares issued and outstanding as at the end of Business Day prior to the Closing Date;
(n) all consents, approval, permits, authorizations or filings as may be required under Securities Laws necessary for the Offering and the transactions contemplated by this Agreement, shall have been obtained or made, as applicable;
(o) the representations and warranties of the Corporation contained herein being true and correct as of the Closing Time with the same force and effect as if made at and as of the Closing Time after giving effect to the transactions contemplated hereby;
(p) the Corporation having complied with all covenants contained herein and satisfied all terms and conditions contained herein to be complied with and satisfied by it at or prior to the Closing Time;
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(q) the Agent not having previously terminated its obligations pursuant to Section 2, Section 3 or Section 10 of this Agreement;
(r) the Agent having received at the Closing Time such further certificates, opinions of counsel and other documentation from the Corporation required herein, provided, however, that the Agent or its counsel shall request any such certificate or document within a reasonable period prior to the Closing Time that is sufficient for the Corporation to obtain and deliver such certificate, opinion or document;
(s) the Agreement, the Subscription Agreements and the certificates representing the Warrants, Unit Shares and Broker Warrants shall have been executed and delivered by the Corporation in form and substance satisfactory to the Agent, acting reasonably; and
(t) the Agent shall be satisfied with the results of its due diligence investigations of the Corporation, acting reasonably.
9. Corporation’s Closing Conditions. It shall be a condition precedent to the Corporation’s obligations to issue the Units that:
(a) the Agent shall have delivered or caused to be delivered to the Corporation by wire transfer an amount representing the aggregate Purchase Price for the Units in Canadian dollars, less an amount equal to the full amount of the Commission and the Offering expenses of the Agent which are payable by the Corporation hereunder;
(b) the Agent shall have complied with the covenants and satisfied all terms and conditions to be complied with and satisfied by it at or prior to the Closing Time; and
(c) no order shall have been made and no proceedings for such purpose being pending or threatened by any Securities Commission which restricts in any manner the distribution of the Units.
10. Termination Events.
The Agent shall be entitled to terminate its obligations hereunder by written notice to that effect given to the Corporation at or prior to the Closing Time if:
(a) there is in the sole opinion of the Agent (acting reasonably) a material change or a change in any material fact or a new material fact shall arise which would be expected to have an adverse change or effect on the business, affairs, or financial condition of the Corporation or the Subsidiaries, taken as a whole, or on the market price of the securities of the Corporation;
(b) the state of the financial markets, whether national or international, is such that in the sole opinion of the Agent, the Units cannot be profitably marketed;
(c) there should develop, occur or come into effect or existence any event, action, state, circumstance, condition or major financial occurrence, catastrophe, accident, natural disaster, public protest, war or act of terrorism or other occurrence of national or international consequence or any law or regulation which in the sole opinion of the Agent (acting reasonably) seriously adversely affects, or involves, or will, or could reasonably be expected to, seriously adversely affect, or involve, the financial markets or the business, operations or affairs of the Corporation and its subsidiaries taken as a whole;
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(d) any order to cease trading the securities of the Corporation is made or threatened by a securities regulatory authority in Canada or other competent regulatory authority;
(e) any inquiry, action, suit, investigation or other proceeding (whether formal or informal) is commenced, announced or threatened or any order made by any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality including, without limitation, the TSX or any securities regulatory authority or any law or regulation is enacted or changed which in the opinion of the Agent, acting reasonably, could operate to prevent or materially restrict the trading of the Common Shares of the Corporation or materially and adversely affects or will materially and adversely affect the market price or value of the Common Shares of the Corporation;
(f) the Corporation fails to satisfy or comply with any of the conditions of Closing contained in Section 8; or
(g) the Corporation is in breach of a material term, condition or covenant of this Agreement, or any representation or warranty given by the Corporation in this Agreement becomes or is materially false.
11. Exercise of Termination Right. If this Agreement is terminated by the Agent pursuant to Section 10, there shall be no further liability on the part of the Agent or of the Corporation to the Agent, except in respect of any liability that may have arisen or may thereafter arise under Sections 13 and 14. The right of the Agent to terminate its obligations under this Agreement is in addition to such other remedies as it may have in respect of any default, act or failure to act of the Corporation in respect of any of the matters contemplated by this Agreement.
12. Survival of Representations and Warranties. All terms, warranties, representations, covenants, indemnities and agreements herein contained or contained in any documents delivered pursuant to this Agreement and in connection with the transactions herein contemplated shall survive the purchase and sale of the Units and continue in full force and effect for the benefit of the Agent, the Purchasers and the Corporation, as the case may be, regardless of the Closing of the Offering for a period ending on the later of: (a) the date that is two years following the Closing Date, and (b) the latest date under applicable Securities Laws (non-residents of Canada being deemed to be resident in the province of Ontario for such purposes) that an action may be commenced or a right of rescission may be exercised with respect to a misrepresentation contained in the U.S. Preliminary Prospectus, the U.S. Prospectus or the Registration Statement or, if applicable, any Supplementary Material (the “Survival Period Deadline”). For greater certainty, and without limiting the generality of the foregoing, the provisions contained in this Agreement in any way relating to the indemnification of the Agent by the Corporation, or the contribution obligations of the Agent or those of the Corporation, shall survive and continue in full force and effect until the Survival Period Deadline. In this regard, the Agent shall act as trustee for the Purchasers and accept these trusts and shall hold and enforce such rights on behalf of the Purchasers.
13. Indemnity. In connection with this Agreement, the Corporation hereby agrees to indemnify and hold harmless the Agent, its U.S. Affiliates, if applicable, each of their respective subsidiaries and each of their respective directors, officers, employees, partners, and agents (each an “Indemnified Party”), from and against any and all losses (other than loss of profits), expenses, claims (including shareholder actions, derivative or otherwise), actions, damages, not including indirect, special and consequential damages, and liabilities, joint or several, including the aggregate amount paid in reasonable settlement of any actions, suits, proceedings, investigations or claims and the reasonable fees and expenses of their counsel that may be incurred in advising with respect to and/or defending any action, suit, proceeding, investigation or claim that may be made or threatened against any Indemnified Party or in enforcing this indemnity (collectively, the “Claims”) to which any Indemnified Party may become subject or otherwise involved in any capacity insofar as the Claims relate to, are caused by, result from, arise out of or are based upon, directly or indirectly, an Indemnified Party’s proper performance under this Agreement. The Corporation also agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or delict or otherwise) to the Corporation or any person asserting claims on behalf of or in right of the Corporation for or in connection with this Agreement except to the extent any losses, expenses, claims, actions, damages or liabilities incurred by the Corporation have resulted from the gross negligence, dishonesty, fraud, breach of applicable laws, or breach of this Agreement of or by such Indemnified Party. The Corporation will not, without the Agent’s prior written consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any action, suit, proceeding, investigation or claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination includes a release of each Indemnified Party from any liabilities arising out of such action, suit, proceeding, investigation or claim.
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If and to the extent a Claim was caused by or resulted from an Indemnified Party’s breach of this Agreement, breach of applicable laws, or its, his or her gross negligence, wilful misconduct or fraud, this indemnity shall cease to apply to such Indemnified Party in respect of such Claim and such Indemnified Party shall forthwith reimburse any funds advanced by the Corporation to the Indemnified Party pursuant to this indemnity in respect of such Claim.
Promptly after receiving notice of an action, suit, proceeding or claim against the Agent or any other Indemnified Party or receipt of notice of the commencement of any investigation involving the Agent or any other Indemnified Party which is based, directly or indirectly, upon or involves any matter in respect of which indemnification may be sought from the Corporation, the Agent or any such other Indemnified Party will notify the Corporation in writing of the particulars thereof, provided that the omission so to notify the Corporation shall not relieve the Corporation of any liability which the Corporation may have to the Agent or any other Indemnified Party unless and only to the extent that any such delay in or failure to give notice as herein required prejudices the defence of such action, suit, proceeding, claim or investigation or results in any material increase in the liability which the Corporation has under this indemnity.
The foregoing indemnity shall not apply to the extent that such Claim, losses, expenses, claims, actions, damages or liabilities to which the Indemnified Party may be subject were caused by or resulted from a breach of this Agreement by that Indemnified Party or the gross negligence, dishonesty, fraud, or breach of law of or by that Indemnified Party.
An Indemnified Party may retain counsel to separately represent it in the defence of a Claim, which shall be at the Corporation’s expense if: (i) the Corporation does not promptly assume the defence of the Claim, (ii) the Corporation agrees to separate representation, or (iii) the Indemnified Party is advised by counsel that there is an actual or potential conflict in the Corporation’s and the Indemnified Party’s respective interests or additional defences are available to the Indemnified Party, which makes representation by the same counsel inappropriate; provided that in any event the Corporation will not be responsible for the costs of more than one counsel for all of the Indemnified Parties. The Corporation also agrees to reimburse the Indemnified Party for the time spent by its personnel in connection with any Claim at their normal per diem rates.
If for any reason the foregoing indemnity is unavailable (other than in accordance with the terms hereof) to any Indemnified Party or insufficient to hold any Indemnified Party harmless, the Corporation shall contribute to the amount paid or payable by the Indemnified Party as a result of such Claim in such proportion as is appropriate to reflect not only the relative benefits received by the Corporation, on the one hand, and the Indemnified Party, on the other hand, but also the relative fault of the Corporation and the Indemnified Party as well as any relevant equitable considerations; provided that the Corporation shall not in any event be liable to pay or contribute to the amount paid or payable by the Indemnified Party under the Claim any amounts in excess of the aggregate amount of the fees, commissions and other consideration actually received by the Agent under this Agreement.
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The obligations of the Corporation hereunder are in addition to any liabilities which the Corporation may otherwise have to an Indemnified Party.
14. Expenses. Whether or not the transactions herein contemplated shall be completed, all expenses of or incidental to the sale of the Units and the Over-Allotment Units shall be borne by the Corporation. For greater certainty and without limiting the generality of the foregoing, the Corporation shall be responsible for the fees and expenses of its counsel and auditors, filing fees, stock exchange listing fees, the costs and expenses of filing and qualifying in each of the Qualifying Jurisdictions, and of preparing, printing, translating and delivering, the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement, the preparation of marketing presentations and the holding of information meetings and its out-of-pocket costs related to information meetings and travel fees and expenses of counsel to the Agents, which shall include the reasonable fees and disbursements (plus HST) of the Agent’s Canadian legal counsel (which legal fees shall not exceed, unless otherwise agreed by the Corporation in writing, $55,000 plus disbursements and applicable taxes), the Agent’s United States legal counsel (which legal fees shall not exceed, unless otherwise agreed by the Corporation in writing, USD$20,000 plus disbursements and applicable taxes) and any out-of-pocket costs related to information meetings and travel.
15. Alternative Transaction. If the Corporation does not proceed with the Offering for any reason within the reasonable control of the Corporation then, if within six (6) months following the termination of this Agreement the Corporation enters into a binding agreement in respect of an Alternative Transaction (as hereinafter defined), the Corporation agrees to pay and issue to the Agent, at or prior to completion of any such Alternative Transaction, in addition to all expenses of the Agent to be reimbursed in accordance with Section 14, the full amount of the Commission which would have been payable under Section 16 had the Offering been completed for gross proceeds of $2,300,057.50, being a cash commission of $149,503.00 (the “Alternative Transaction Commission”), in each case to the extent that the expenses or Commission have not already been paid by the Corporation. For greater certainty, in the event that the Agent elects not to proceed with the Offering and the Corporation subsequently enters into a binding agreement in respect of, or makes a public announcement in respect of, an Alternative Transaction, the Corporation shall have no obligation to pay any Alternative Transaction Commission but shall remain liable for all expenses of the Agent in accordance with Section 14.
An “Alternative Transaction” means any equity or debt financing, merger, amalgamation, arrangement, business combination, take-over bid, insider bid, issuer bid, reorganization, joint venture, sale or exchange of a part of, all of, or substantially all of the assets or common shares of the Corporation or any similar transaction involving the Corporation with any arm’s length party.
16. Agent’s Commission. In consideration of the services to be rendered by the Agent hereunder and all other matters in connection with the issue and sale of the Units under the Offering (including, for greater certainty, pursuant to the exercise of the Over-Allotment Option), the Corporation shall pay to the Agent a cash commission (the “Commission”) equal to 6.5% of the gross proceeds realized by the Corporation in respect of the sale of the Units under the Offering. The obligation of the Corporation to pay the Commission shall arise at the Closing Time, and the Commission shall be fully earned by the Agent at that time.
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As additional compensation, the Agent will receive at the Closing Time, Broker Warrants (the “Broker Warrants”) exercisable to acquire such number of Common Shares (the “Broker Shares”) as is equal to 6.5% of the number of Units issued pursuant to the Offering (including, for greater certainty, pursuant to the exercise of the Over-Allotment Option); provided that if the Corporation has not caused the Registration Statement to be declared effective by the SEC at or before 5:00 p.m. (Vancouver time) on November 26, 2017, then the Agent shall be entitled to receive, for no additional consideration, an additional 10% of the Broker Warrants, resulting in the issuance of Broker Warrants in the amount of 7.15% of the number of Units sold in connection with the Offering (each additional Broker Warrant, a “Penalty Broker Warrant”). The Broker Warrants shall be exercisable at any time following the Closing Time, until 5:00 p.m. (Vancouver time) on the date that is 48 months following the Closing Time, at an exercise price, subject to adjustment, of $0.79 per Broker Warrant.
17. Book Entry Closing. At the discretion of the Agent, the Unit Shares and Warrants will be issued by way of electronic deposit in accordance with the rules and procedures of CDS. In such case the Agent will provide a direction to CDS with respect to the crediting of the Unit Shares and Warrants to the accounts of the participants of CDS as shall be designated by the Agent in writing in sufficient time prior to the Closing Date to permit such crediting.
18. Conditions. All of the terms and conditions contained in this Agreement to be satisfied by the Corporation on the one hand and the Agent on the other hand prior to the Closing Time shall be construed as conditions, and any breach or failure by a party to comply with any of such terms and conditions shall entitle the other parties to terminate their obligations hereunder by written notice to that effect given prior to the Closing Time. It is understood and agreed that any party may waive in whole or in part, or extend the time for compliance with, any of such terms and conditions without prejudice to such party’s rights in respect of any such terms and conditions or any other or subsequent breach or non-compliance; provided, however, that to be binding, any such waiver or extension must be in writing.
19. Notices. Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement (a “notice”) shall be in writing addressed as follows:
if to the Corporation:
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO
US 80112
Attention: Mark Alan Smith, Executive, Chairman, CEO and President
Email: msmith@niocorp.com
With a copy (for information purposes only and not constituting notice) to:
Blake, Cassels & Graydon LLP
595 Burrard Street, Suite 2600
Vancouver, British Columbia V7X 1L3
Attention: Bob Wooder
Email: BOB.WOODER@blakes.com
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if to the Agent:
Mackie Research Capital Corporation
199 Bay Street, Suite 4500
Commerce Court West, Box 368
Toronto, Ontario M5L 1G2
Attention: David Keating
Email: DKeating@mackieresearch.com
With a copy (for information purposes only and not constituting notice) to:
Owens Wright LLP
Suite 300, 20 Holly Street
Toronto, Ontario M4S 3B1
Attention: Paul De Luca
Email: pdeluca@owenswright.com
or to such other address as any of the parties may designate by notice given to the others.
Each notice shall be personally delivered to the addressee or sent by email to the addressee and: (i) a notice which is personally delivered shall, if delivered on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered; and (ii) a notice which is sent by email shall be deemed to be given and received on the first Business Day following the day on which it is sent.
20. Time of the Essence. Time shall, in all respects, be of the essence hereof.
21. Canadian Dollars. Unless otherwise indicated all references herein to dollar amounts are to lawful money of Canada.
22. Headings. The headings contained herein are for convenience only and shall not affect the meaning or interpretation hereof.
23. Singular and Plural, etc. Where the context so requires, words importing the singular number include the plural and vice versa, and words importing gender shall include the masculine, feminine and neuter genders.
24. Entire Agreement. This Agreement constitutes the only agreement between the parties with respect to the Offering and shall supersede any and all prior negotiations and understandings in connection with the Offering including for greater certainty, the Engagement Letter between the Corporation and the Agent dated June 30, 2017 and the underwriting agreement between the Corporation and the Agent dated May 16, 2017. This Agreement may be amended or modified in any respect by written instrument only.
25. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect or limit the validity or enforceability of the remaining provisions of this Agreement.
26. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
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27. Successors and Assigns. The terms and provisions of this Agreement shall be binding upon and enure to the benefit of the Corporation, the Agent and the Purchasers and their respective executors, heirs, successors and permitted assigns; provided that, except as provided herein or in the Subscription Agreements, this Agreement (including, for greater certainty, the indemnity provided for in Section 13) shall not be assignable by any party without the written consent of the others.
28. Further Assurances. Each of the parties hereto shall do or cause to be done all such acts and things and shall execute or cause to be executed all such documents, agreements and other instruments as may reasonably be necessary or desirable for the purpose of carrying out the provisions and intent of this Agreement.
29. Effective Date. This Agreement is intended to and shall take effect as of the date first set forth above, notwithstanding its actual date of execution or delivery.
30. Language. The parties hereby acknowledge that they have expressly required this Agreement and all notices, statements of account and other documents required or permitted to be given or entered into pursuant hereto to be drawn up in the English language only. Les parties reconnaissent avoir expressment demandées que la présente convention ainsi que tout avis, tout état de compte et tout autre document a être ou pouvant etre donné ou conclu en vertu des dispositions des présentes, soient rédigés en langue anglaise seulement.
31. Counterparts and Facsimile Copies. This Agreement may be executed in any number of counterparts and by facsimile, or other electronic means, each of which so executed shall constitute an original and all of which taken together shall form one and the same agreement.
32. Conflict. The Corporation acknowledges that the Agent and its affiliates carry on a range of businesses, including providing stockbroking, investment advisory, research, investment management and custodial services to clients and trading in financial products as agent or principal. It is possible that the Agent and other entities in its groups that carry on those businesses may hold long or short positions in securities of companies or other entities, which are or may be involved in the transactions contemplated in this Agreement and effect transactions in those securities for their own account or for the account of their respective clients. The Corporation agrees that these divisions and entities may hold such positions and effect such transactions without regard to the Corporation’s interests under this Agreement.
33. No Fiduciary Duty. The Corporation acknowledges that in connection with the Offering: (i) the Agent has acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Corporation or any other person, (ii) the Agent owes the Corporation only those duties and obligations set forth in this Agreement, and (iii) the Agent and its affiliates are engaged in a broad range of transactions that involve interests that differ from those of the Corporation. The Corporation waives to the full extent permitted by applicable law any claims it may have against the Agent arising from an alleged breach of fiduciary duty in connection with the Offering. The Agent has not provided any legal, accounting, regulatory or tax advice with respect to the Offering and the Corporation has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If the Corporation is in agreement with the foregoing terms and conditions, please so indicate by executing a copy of this Agreement where indicated below and delivering the same to the Agent.
Yours very truly, | ||
MACKIE RESEARCH CAPITAL CORPORATION | ||
Per: | /s/ David Keating | |
Authorized Signing Officer |
* * * * * * * * * *
The foregoing is hereby accepted on the terms and conditions therein set forth.
DATED the 26th day of July, 2017.
NIOCORP DEVELOPMENTS LTD. | ||
Per: | /s/ Mark Alan Smith | |
Authorized Signing Officer |
SCHEDULE “A”
DETAILS
OF OUTSTANDING CONVERTIBLE SECURITIES
AND RIGHTS TO ACQUIRE SECURITIES
This is Schedule “A” to the Agency Agreement dated as of July 26, 2017 between NioCorp Developments Ltd. and Mackie Research Capital Corporation.
A. Warrants, Broker Warrants and Lind Warrants
The Corporation has 20,609,086 common share purchase warrants outstanding which are exercisable into the equivalent number of Common Shares.
B. Options
The Corporation has 17,025,000 options outstanding which are exercisable into the equivalent number of Common Shares.
C. Convertible Notes
On October 14, 2015, the Corporation issued unsecured convertible promissory notes in the aggregate principal amount of $800,000 (the “Notes”). The Notes bear interest at a rate of 8%, payable quarterly in arrears, are nontransferable, and have a term of three years from the date of issue. Principal under the Notes is convertible by lenders into, and payable by NioCorp in, Common Shares at a conversion price of C$0.97 per Common Share, calculated on conversion or repayment using the then-current Bank of Canada noon exchange rate. Interest payable and any unconverted principal at maturity date is payable either in cash or Common Shares, at the election of the Corporation.
On December 22, 2015, the Corporation closed a definitive convertible security funding agreement (the “Lind Agreement”) with Lind Asset Management IV, LLC (“Lind”). The Lind Agreement is comprised of a $4,500,000 principal amount, 10% secured convertible security (the “Convertible Security”) and 3,125,000 transferable common share purchase warrants (the “Lind Warrants”). The Convertible Security has a term of two years from its date of issuance, and interest is prepaid and added to its principal amount, resulting in an initial face value of $5,400,000. On March 20, 2017, the Corporation and Lind entered into an amendment to extend the term of the Convertible Security from 24 months to 30 months, such that the due date has been extended to June 17, 2018. As of the date hereof, $2,600,000 of the Convertible Security face value remains unconverted and outstanding.
Further to the terms of the Convertible Security, upon satisfaction of certain conditions, including but not limited to a minimum draw down amount by Lind under the Convertible Security, a minimum market capitalization for the Corporation, and a minimum amount of cash on the Corporation’s balance sheet, the Corporation had the right to call an additional $1,000,000 under the Convertible Security (a “First Tranche Increase”). On February 14, 2017, upon satisfaction of the conditions for the First Tranche Increase, the Corporation provided notice to Lind to demand the advancement of an additional $1,000,000 in funding under the Convertible Security pursuant to its right to call. This amount was funded by Lind on March 31, 2017, resulting in an increase in the face amount of the Convertible Security increased by $1,200,000 ($1,000,000 in funding and $200,000 in implied interest). The maturity date of the First Tranche increase is March 31, 2019.
D. Lind Agreement
Lind Asset Management IV, LLC has certain rights of first refusal pursuant to the terms of the loan arrangements therewith.
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Exhibit 4.2
THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS IN THE UNITED STATES AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S OF THE 1933 ACT), EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE 1933 ACT. THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN THE LIMITED CIRCUMSTANCES PROVIDED HEREIN PURSUANT TO TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
NIOCORP DEVELOPMENTS LTD.
UNIT SUBSCRIPTION AGREEMENT
TO: | NIOCORP DEVELOPMENTS LTD. (the “Issuer”) |
AND: | MACKIE RESEARCH CAPITAL CORPORATION (the “Agent”) |
The undersigned (hereinafter referred to as the “Subscriber”) hereby irrevocably subscribes for and agrees to purchase from the Issuer the number of units of the Issuer (the “Units”) set forth below for the aggregate subscription price set forth below (the “Subscription Price”), representing a subscription price of C$0.65 per Unit, upon and subject to the terms and conditions, and the covenants, representations and warranties set forth in this Subscription Agreement (as defined below), including the attached “Terms and Conditions of Subscription” (including, without limitation, the representations, warranties and covenants set forth in the applicable schedules attached hereto). Each Unit is comprised of one common share in the capital of the Issuer (a “Unit Share”) and one common share purchase warrant (a “Warrant”) of the Issuer. Each Warrant will entitle the holder to acquire one additional common share in the capital of the Issuer (a “Warrant Share”), exercisable for a period of 48 months following the Closing at an exercise price of C$0.79 per Warrant Share. The Units are being offered by the Agent on a commercially reasonable efforts basis pursuant to an Agency Agreement (as defined herein) to be entered into between the Issuer and the Agent. The Subscriber further agrees, without limitation, that the Issuer and the Agent may rely upon the Subscriber’s representations, warranties and covenants contained in this Subscription Agreement.
SUBSCRIPTION AND SUBSCRIBER INFORMATION
Please print all information (other than signatures), as applicable, in the space provided below.
Amount of Subscription
Aggregate Subscription Price: C$_____________________
|
Beneficial Owner of Subscriber
If the Subscriber is not an individual, the Subscriber represents and warrants that it has ☐ / does not have ☐ (check one) a Beneficial Owner (as defined in the Terms and Conditions of Subscription) and, if it has a Beneficial Owner, the name and address of the Beneficial Owner is as follows: ______________________________________________________ ______________________________________________________ ______________________________________________________
| |
Subscriber’s Information
and Signature Name of Subscriber – please print Signature (of individual
or authorized signatory) __________________________________________________ Please print name of individual whose
signature appears above if __________________________________________________ Subscriber’s Residential Address __________________________________________________
__________________________________________________ Subscriber’s Telephone Number |
||
Principal Information If the Subscriber is signing as an agent for
a principal and is not deemed to be purchasing as principal as set out below, the Subscriber hereby represents and warrants that
the name and residential address of such principal is as follows: ______________________________________________________ Name of Principal ______________________________________________________ Principal’s Residential Address ______________________________________________________
|
Registration Instructions (if different from the Subscriber’s name and address given under Subscriber’s Information): __________________________________________________ __________________________________________________ Account reference, if applicable __________________________________________________ __________________________________________________
|
Delivery
Instructions (if different from the Subscriber’s name and address given under Subscriber’s Information): ______________________________________________________ Name ______________________________________________________ Account reference, if applicable ______________________________________________________ Address (including postal code) ______________________________________________________ Telephone Number and Contact Name |
Present Ownership of Securities
The Subscriber either [check appropriate box]:
does not currently own directly or indirectly, or exercises control or direction over, any common shares in the capital of the Issuer or securities convertible into common shares in the capital of the Issuer; or | ||
owns directly or indirectly, or exercises control or direction over, __________ common shares in the capital of the Issuer, and convertible securities entitling the Subscriber to acquire an additional __________ common shares in the capital of the Issuer. | ||
Insider Status
The Subscriber either [check appropriate box]:
is an “Insider” of the Issuer as defined in the Securities Act (British Columbia); or | ||
is not an Insider of the Issuer. |
Registrant Status
The Subscriber either [check appropriate box]:
is a “Registrant” as defined in the Securities Act (British Columbia); or | ||
is not a “Registrant”. |
U.S. Purchaser Status
The Subscriber either [check appropriate box]:
is a “U.S. Purchaser” as defined in the Terms and Conditions below; or | ||
is not a “U.S. Purchaser”. |
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ACCEPTANCE
The Issuer hereby accepts the subscription as set forth above on the terms and conditions contained in this Subscription Agreement.
DATED as of ___________________, 2017.
NIOCORP DEVELOPMENTS LTD. | ||
Per: | ||
Authorized Signatory |
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NIOCORP DEVELOPMENTS LTD.
SUBSCRIPTION FOR UNITS
INSTRUCTIONS
To properly complete this Subscription Agreement, you must:
If you are an accredited investor, are resident in Canada or otherwise subject to Canadian securities laws and are not a U.S. Purchaser (as defined below):
(1) | Complete and execute the first two pages. |
(2) | Complete and execute Schedule B – Accredited Investor Status Certificate. |
(3) | Complete and execute Schedule C – Regulation S Certificate. |
(4) | Complete and execute Schedule E – Selling Shareholder Questionnaire, if you desire to be named in the Registration Statement. |
If you are not an accredited investor, but are an existing security holder of the Issuer as of the Record Date (as defined herein), and are resident in British Columbia, Alberta, Saskatchewan, Ontario or New Brunswick and are not a U.S. Purchaser:
(1) | Complete and execute the first two pages. |
(2) | Complete and execute Schedule C – Regulation S Certificate. |
(3) | Complete and execute Schedule D – Existing Security Holder Certificate. |
(4) | Complete and execute Schedule E – Selling Shareholder Questionnaire, if you desire to be named in the Registration Statement. |
If you are resident outside of the United States and Canada, are not a U.S. Purchaser and are not otherwise subject to Canadian or United States securities laws:
(1) | Complete and execute the first two pages. |
(2) | Complete and execute Schedule C – Regulation S Certificate. |
(3) | Complete and execute Schedule E – Selling Shareholder Questionnaire, if you desire to be named in the Registration Statement. |
If you are a resident in the United States and/or a U.S. Purchaser, you are not permitted to participate in the Offering (as defined below).
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Procedure and Delivery:
The signed Subscription Agreement, including all required schedules, should be filled out, signed and delivered with payment by no later than 5:00 p.m. (Vancouver time) on July 12, 2017 (or such other time, date or place as the Subscriber may be advised) to:
Mackie Research Capital Corporation
199 Bay Street, Suite 4500
Commerce Court West, Box 368
Toronto, Ontario M5L 1G2
Attention: Evan Trott
Email: Etrott@mackieresearch.com
Payment for the Subscription Price should be made by a certified cheque, bank draft, money order, or confirmation of wire transfer for the subscription funds in Canadian dollars made payable to “Mackie Research Capital Corporation”.
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TERMS AND CONDITIONS OF SUBSCRIPTION
UNITS OF NIOCORP DEVELOPMENTS LTD.
1. | Definitions and Interpretation |
(a) | In this Subscription Agreement, unless the context required otherwise: |
(i) | “Agency Agreement” means the agency agreement to be entered into between the Issuer and the Agent and dated the Closing Date; |
(ii) | “Agent” means Mackie Research Capital Corporation; |
(iii) | “1933 Act” means the United States Securities Act of 1933, as amended; |
(iv) | “B.C. Act” means the Securities Act (British Columbia), the regulations and rules made thereunder and all administrative policy statements, blanket orders, notices, directions and rulings issued or adopted by the British Columbia Securities Commission, all as amended; |
(v) | “Business Day” means a day other than a Saturday, Sunday or a holiday on which principal chartered banks located in Vancouver, British Columbia are not open for business; |
(vi) | “Closing” has the meaning set forth in section 5; |
(vii) | “Closing Date” means the date or dates of completion of the sale of Units under the Offering as may be determined by the Issuer; |
(viii) | “Closing Time” means 10 a.m. (Vancouver time), or such other time as may be determined by the Issuer; |
(ix) | “Disclosed Principal” means a purchaser that is purchasing the Subscriber’s Units through an agent or trustee for beneficial principal(s); |
(x) | “Exchange” means the Toronto Stock Exchange; |
(xi) | “FSE” means the Frankfurt Stock Exchange; |
(xii) | “International Jurisdiction” has the meaning set forth in section 8(l); |
(xiii) | “Insider” has the meaning set forth in section 1(1) of the B.C. Act; |
(xiv) | “Issuer” means NioCorp Developments Ltd.; |
(xv) | “NI 45-106” means National Instrument 45-106 Prospectus Exemptions published by the Canadian Securities Administrators; |
(xvi) | “Offering” has the meaning set forth in section 3(a); |
(xvii) | “OTCQX” means the OTC Markets Group’s OTCQX exchange; |
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(xviii) | “Parties” means collectively, the Subscriber and the Issuer and “Party” means any one of them, as the context requires; |
(xix) | “person” means any individual (whether acting as an executor, trustee, administrator, legal representative or otherwise), corporation, firm, partnership, sole proprietorship, syndicate, joint venture, trustee, trust, fund, unincorporated organization or association and every other form of legal or business entity of whatsoever nature or kind, and pronouns have a similar extended meaning; |
(xx) | “Personal Information” means any information about a person (whether individual or otherwise) and includes information contained in this Subscription Agreement, including the Schedules incorporated by reference herein; |
(xxi) | “Regulatory Authorities” has the meaning set forth in section 6; |
(xxii) | “Securities” means, collectively, the Unit Shares, the Warrants and the Warrant Shares; |
(xxiii) | “Securities Laws” means the applicable Canadian provincial securities laws and United States federal and state securities laws and all applicable rules, regulations, notices and policies promulgated or published thereunder together with all applicable and legally enforceable published policy statements, policies, rules, blanket orders, rulings and notice of applicable securities regulatory authorities, as well as the published policies and rules of the Exchange; |
(xxiv) | “Subscriber” means the subscriber for Units as set out on the face page of this Subscription Agreement and includes, as applicable, the Disclosed Principal unless the context otherwise requires; |
(xxv) | “Subscriber’s Units” means those Units that the Subscriber has agreed to purchase under this Subscription Agreement; |
(xxvi) | “Subscription Agreement” or “Agreement” means this subscription agreement (including the schedules hereto) and any instrument amending this Subscription Agreement; “hereof”, “hereto”, “hereunder”, “herein” and similar expressions mean and refer to this Subscription Agreement and not to a particular section or clause; and the expression “section” or “clause” followed by a number or letter means and refers to the specified section or clause of this Subscription Agreement; |
(xxvii) | “Subscription Price” has the meaning set forth on the face page of this Subscription Agreement; |
(xxviii) | “Unit” has the meaning set forth on the face page of this Subscription Agreement; |
(xxix) | “Unit Share” has the meaning set forth on the face page of this Subscription Agreement; |
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(xxx) | “United States” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia; |
(xxxi) | “U.S. Person” has the meaning set forth in Rule 902(k) of Regulation S promulgated under the 1933 Act; |
(xxxii) | “U.S. Purchaser” is (a) any U.S Person, (b) any person purchasing securities for the account or benefit of any U.S. Person or person in the United States, (c) any person who receives or received an offer to acquire the Securities while in the United States, and (d) any person who is, or whose authorized signatory is, in the United States at the time such person’s buy order was made or this Subscription Agreement was executed or delivered; |
(xxxiii) | “Warrant” has the meaning set forth on the face page of this Subscription Agreement; and |
(xxxiv) | “Warrant Share” has the meaning set forth on the face page of this Subscription Agreement. |
(b) | Time is of the essence of this Agreement. |
(c) | This Agreement is to be read with all changes in gender or number as required by the context. |
(d) | The headings in this Agreement are for convenience of reference only and do not affect the interpretation of this Agreement. |
(e) | In this Agreement, unless otherwise stated, all references to “$” and “C$” are references to Canadian dollars. |
2. | Subscription for Units |
(a) | The Subscriber hereby confirms its irrevocable subscription for the Units from the Issuer, on and subject to the terms and conditions set out in this Subscription Agreement, for the Subscription Price which is payable as described herein. The Subscriber acknowledges (on its own behalf and including, if applicable, on behalf of each Disclosed Principal) that upon acceptance by the Issuer of this Subscription Agreement, the Subscription Agreement will constitute a binding obligation of the Subscriber (including if applicable, each Disclosed Principal), subject to the terms and subject to the conditions set out in this Subscription Agreement. |
(b) | The Units will be issued and registered in the name of the Subscriber as per the instructions on the face page of this Subscription Agreement. |
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3. | The Offering |
(a) | The Subscriber acknowledges that this subscription forms part of a larger offering (the “Offering”) by the Issuer of up to 3,077,000 Units at a price of C$0.65 for aggregate gross proceeds of up to C$2,000,050, and that the Company and the Agent may mutually agree to increase the size of the Offering. |
(b) | The Offering is being made through the Agent on a commercially reasonable efforts basis pursuant to an Agency Agreement which the Issuer intends to enter into with the Agent and under which the Agent will arrange for subscribers to purchase the Units under the Offering. |
(c) | The Issuer has granted to the Agent an option (the “Agent’s Option”) to solicit and sell up to an additional 461,550 Units of the Issuer on the same terms and conditions pursuant to the Offering, exercisable at any time, in whole or in part, for a period of up to 48 hours prior to the Closing Date. References herein to Units and Offering shall be deemed to include the Agent’s Option in the event the Agent’s Option is exercised. |
(d) | If the Issuer has not caused the Registration Statement (as defined below) to be declared effective by the SEC at or before 5:00 p.m. (Vancouver time) on the date that is four months following the Closing Date, the Subscriber will be entitled to receive, for no additional consideration, an additional number of Warrants equal to 10% of the Warrants underlying each Unit, resulting in the issuance of 1.1 Warrants (instead of one Warrant) per Unit, with each whole Warrant being exercisable into one Warrant Share, subject to adjustment, on exercise of the Warrants. |
(e) | The Subscriber further understands that there is no minimum number of Units that must be sold pursuant to the Offering and accordingly, the Subscriber may be the sole purchaser of Units. |
4. | Partial Acceptance or Rejection of Subscription |
The Issuer may, in its absolute discretion, accept or reject the Subscriber’s subscription for Units as set forth in this Subscription Agreement, in whole or in part, and the Issuer reserves the right to allot to the Subscriber less than the amount of Units subscribed for under this Subscription Agreement. The Subscriber acknowledges and agrees that the acceptance of this Subscription Agreement will be conditional upon, among other things, the sale of the Units to the Subscriber being exempt from any prospectus and offering memorandum requirements of applicable Securities Laws and the equivalent provisions of securities laws of any other applicable jurisdiction.
If this Subscription Agreement is rejected in whole, any certified cheque, money order, bank draft or other forms of payment delivered to the Agent by the Subscriber on account of the Subscription Price for the Units subscribed for will be promptly returned by the Agent to the Subscriber without interest. If this Subscription Agreement is accepted only in part, payment representing the amount by which the payment delivered by the Subscriber to the Agent exceeds the Subscription Price of the number of Units sold to the Subscriber pursuant to a partial acceptance of this Subscription Agreement will be promptly delivered by the Agent to the Subscriber without interest.
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5. | Closing |
Delivery and sale of the Units and payment of the Subscription Price will be completed (the “Closing”) at the offices of Blakes Cassels & Graydon LLP, 595 Burrard Street, Vancouver, British Columbia at the Closing Time or at such other place and time as the Issuer may elect on such date or dates to be determined by the Issuer. Closing of the Offering will only occur if, prior to the Closing Time, the terms and conditions contained in this Subscription Agreement have been complied with to the satisfaction of the Issuer, or waived by the Issuer, including receipt by the Issuer of all completed Subscription Agreements and payment of the Subscription Price for all of the Units sold pursuant to the Offering.
At the Closing, the Agent shall deliver to the Issuer all completed subscriptions, including this subscription, and deliver to the Issuer the aggregate subscription proceeds less any amounts due to the Agent, against delivery by the Issuer of certificates representing the Unit Shares and Warrants, as applicable. The Subscriber appoints the Agent, with full power of substitution, as its true and lawful attorney and agent with full power and authority in its place and stead to:
(a) | act as the Subscriber’s representative at the Closing and to swear, execute, file and record in the Subscriber’s name and on the Subscriber’s behalf any document necessary to accept delivery of the Securities on the Closing Date; |
(b) | approve any opinions, certificates or other documents addressed to the Subscriber; |
(c) | waive, in whole or in part, any representations, warranties, covenants or conditions for the benefit of the Subscriber, provided that no such waiver shall occur if such waiver may have an adverse effect on any rights or benefits provided to the Subscriber and the Disclosed Principal, if any, herein; |
(d) | complete or correct any errors or omissions in this Subscription Agreement (including any Schedules) on behalf of the Subscriber; |
(e) | to negotiate, settle, execute, deliver and amend the Agency Agreement and any ancillary documents in connection with the Offering; and |
(f) | receive on the Subscriber’s behalf any Units subscribed for hereunder. |
If, prior to the Closing Time, the terms and conditions contained in this Subscription Agreement (other than delivery by the Issuer to the Subscriber of certificates representing the Units) have not been complied with to the satisfaction of the Issuer, or waived by the Issuer, the Issuer and the Subscriber will have no further obligations under this Subscription Agreement.
The Subscriber acknowledges that the Offering may be completed at one or more partial closings in the discretion of the Issuer and that the Closing as contemplated in this Subscription Agreement may be effected at one or more of such partial closings.
6. | Conditions of Closing |
This Subscription Agreement shall be subject to acceptance by the Issuer and approval by the Exchange and any other stock exchange or regulatory authority having jurisdiction with respect to the Issuer (collectively, the “Regulatory Authorities”).
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The Subscriber acknowledges and agrees that the obligations of the Issuer hereunder are conditional on the accuracy of the representations and warranties of the Subscriber contained in this Subscription Agreement and in the term sheet appended as Schedule A as of the date of this Subscription Agreement, and as of the Closing Time as if made at and as of the Closing Time, and the fulfillment of the following additional conditions as soon as possible and in any event not later than the Closing Time:
(a) | the Subscriber having properly completed, signed and delivered this Subscription Agreement (with payment) by no later than 5:00 p.m. (Vancouver time) on July 12, 2017, to: |
Mackie Research Capital Corporation
199 Bay Street, Suite 4500
Commerce Court West, Box 368
Toronto, Ontario M5L 1G2
Attention: Evan Trott
Email: Etrott@mackieresearch.com
(b) | all Subscribers having properly completed, signed and delivered the Regulation S Certificate attached as Schedule C hereto; |
(c) | if required by this Subscription Agreement, the Subscriber having properly completed, signed and delivered the Accredited Investor Status Certificate attached as Schedule B hereto (if applicable), and the Existing Security Holder Certificate attached as Schedule D hereto (if applicable); |
(d) | the Issuer having accepted this Subscription Agreement; |
(e) | all necessary regulatory and conditional Exchange approvals having been obtained by the Issuer; and |
(f) | unless other arrangements acceptable to the Agent have been made, payment having been made to the Agent by the Subscriber of the Subscription Price as set out above under the heading “Procedure and Delivery” on page v of this Subscription Agreement and payment having been made to the Issuer by the Agent on behalf of the Subscriber of the Subscription Price. |
7. | Representations, Warranties and Covenants of the Issuer |
By executing this Subscription Agreement, the Issuer represents, warrants and covenants to the Subscriber that the representations and warranties made by the Issuer to the Agent in the Agency Agreement will be true and correct as of the Closing Date. The Subscriber shall be entitled to rely on the representations, warranties and covenants made by the Issuer to the Agent in the Agency Agreement to the extent that they have not been varied, amended, altered or waived, in whole or in part, by the Agent and shall survive the closing of the Offering and shall continue in full force and effect for the benefit of the Subscriber in accordance with the terms of the Agency Agreement, until 18 months from the Closing Date. The representations, warranties and covenants made by the Issuer to the Agent in the Agency Agreement are hereby incorporated by reference such that they form an integral part of this Subscription Agreement.
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8. | Representations, Warranties, Covenants and Acknowledgements of the Subscriber |
By executing this Subscription Agreement, the Subscriber (on its own behalf and, including if applicable, on behalf of each Disclosed Principal) represents, warrants, covenants and acknowledges to and with the Issuer and the Agent (and acknowledges that the Issuer and the Agent are relying thereon) that:
Authorization and Effectiveness
(a) | if the Subscriber is an individual, the Subscriber is of the full age of majority in the jurisdiction in which this Subscription Agreement is executed and is legally competent to execute, deliver and be bound by this Subscription Agreement, to perform all of its obligations hereunder and to undertake all actions required of the Subscriber hereunder; |
(b) | if the Subscriber is a corporation, the Subscriber is a valid and subsisting corporation, has the necessary corporate capacity and authority to enter into and to observe and perform its covenants and obligations under this Agreement and has taken all necessary corporate action in respect thereof; |
(c) | if the Subscriber is a partnership, syndicate or other unincorporated form of organization, the Subscriber has the necessary legal capacity and authority to execute and deliver this Agreement and perform its covenants and obligations hereunder and has obtained all necessary approvals thereof; |
(d) | if the Subscriber is acting as principal, this Subscription Agreement has been duly and validly authorized, executed and delivered by the Subscriber, and, when accepted by the Issuer, will constitute a legal, valid and binding obligation enforceable against the Subscriber in accordance with the terms hereof (subject to bankruptcy, insolvency and other laws limiting the enforceability of creditors’ rights and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction); |
(e) | if the Subscriber is acting as agent or trustee (including, for greater certainty, a portfolio manager or comparable adviser) for a principal, the Subscriber is duly authorized to execute and deliver this Subscription Agreement and all other necessary documents in connection with such subscription on behalf of such principal, and this Subscription Agreement has been duly and validly authorized, executed and delivered by or on behalf of, and, when accepted by the Issuer, will constitute a legal, valid, binding obligation enforceable in accordance with the terms hereof (subject to bankruptcy, insolvency and other laws limiting the enforceability of creditors rights and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction) against, such principal; |
(f) | the execution and delivery of this Subscription Agreement, the performance and compliance with the terms hereof, the subscription for the Units and the completion of the transactions contemplated hereby will not result in any material breach of, or be in conflict with or constitute a material default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a material default under any term or provision of the constating documents, by-laws or resolutions of the Subscriber (if not an individual), the Securities Laws or any other applicable law, any agreement to which the Subscriber is a party or any applicable regulation, judgment, decree, order or ruling; |
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(g) | the Subscriber is not one of a combination of shareholders of the Issuer or investors in the Offering (including by acting jointly or in concert with any such shareholder or investor) as a consequence of which the issuance of Units to the Subscriber hereunder (assuming the exercise of any convertible securities of the Issuer currently held by the Subscriber and any such other shareholders or investors) will result in, or be part of a transaction that will result in, the creation of a new “Insider” or “Control Person” of the Issuer under the policies of the Exchange and Securities Laws; |
Residence
(h) | the Subscriber is a resident of, or is otherwise subject to the laws of, the jurisdiction disclosed under “Subscriber’s Residential Address” on the face page of this Subscription Agreement, and that such address is the residence of the Subscriber or the place of business of the Subscriber at which the Subscriber received and accepted the offer to acquire the Units and was not created or used solely for the purpose of acquiring the Units; |
Disclosure if Purchasing as Agent or Trustee
(i) | if the Subscriber is not subscribing as principal, the Subscriber acknowledges that the Issuer may be required by law to disclose to applicable securities regulatory authorities or stock exchanges information concerning the identities of each beneficial purchaser for whom the Subscriber is acting hereunder; |
Eligibility to Purchase under Prospectus Exemption
(j) | if the Subscriber (or any Disclosed Principal) is resident in Canada or otherwise subject to Securities Laws, the Subscriber (or if applicable, the Disclosed Principal) is eligible to purchase the Units pursuant to an exemption from the prospectus requirements of the Securities Laws; |
(k) | if the Subscriber (or any Disclosed Principal) is resident in Canada or otherwise subject to Securities Laws, the Subscriber has completed, executed and delivered to the Issuer either: (i) an Accredited Investor Status Certificate in the form attached hereto as Schedule B, as well as (if applicable) an Accredited Investor Risk Acknowledgment Form in the form attached as Exhibit A to Schedule B, indicating that the Subscriber (or if applicable, the Disclosed Principal) fits within one of the prospectus exemption categories under NI 45-106 as set forth therein; or (ii) an Existing Security Holder Certificate in the form attached hereto as Schedule D, indicating that the Subscriber (or if applicable, the Disclosed Principal) will be acquiring the Units pursuant to the existing security holder exemption (the “Existing Security Holder Exemption”) available under one of: (a) BC Instrument 45-534 Exemption from prospectus requirement for certain trades to existing security holders in British Columbia, (b) Alberta Securities Commission Rule 45-513 Prospectus exemption for distribution to existing security holders in Alberta, (c) Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions in Ontario, (d) General Order 45-926 Exemption from prospectus requirement for certain trades to existing security holders in Saskatchewan, or (e) Blanket Order 45-505 - Prospectus Exemption for Distribution to Existing Security Holders in New Brunswick, and, in either case, confirms the truth and accuracy of all representations, warranties and covenants made in such certificate as of the date of this Subscription Agreement and as of the Closing Time; |
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International Purchasers
(l) | if the Subscriber (or any Disclosed Principal), is resident in or otherwise subject to the securities laws of any jurisdiction outside of Canada and the United States (the “International Jurisdiction”), then: |
(i) | the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws of the International Jurisdiction which would apply to this subscription, if there are any; |
(ii) | the Subscriber is purchasing the Units pursuant to exemptions from the prospectus and registration requirements under the applicable securities laws of the International Jurisdiction or, if such is not applicable, the Subscriber is permitted to purchase the Securities under the applicable securities laws of such International Jurisdiction without the need to rely on exemptions; |
(iii) | the applicable securities laws of the International Jurisdiction do not require the Issuer to prepare and/or file any documents or be subject to ongoing reporting requirements or seek any approvals of any kind whatsoever in respect of the sale of the Securities to the Subscriber from any regulatory authority of any kind whatsoever in the International Jurisdiction; |
(iv) | the purchase of Securities by the Subscriber, and (if applicable) each Disclosed Principal, does not trigger: (i) any obligation to prepare and file a prospectus, an offering memorandum or similar document, or any other ongoing reporting requirements with respect to such purchase or otherwise; (ii) any registration or other obligation on the part of the Issuer; or (iii) the Issuer becoming subject to regulation in such jurisdiction or require the Issuer to attorn to the jurisdiction of any governmental authority or regulator in such jurisdiction or require any translation of documents by the Issuer; and |
(v) | the Subscriber, and (if applicable) any Disclosed Principal, will not sell or otherwise dispose of any Securities, except in accordance with applicable Securities Laws; |
No Prospectus or Undisclosed Information
(m) | the Subscriber understands that the sale of the Units is conditional upon such sale being exempt from the requirements to file and obtain a receipt for a prospectus or to deliver an offering memorandum, and no prospectus has been filed by the Issuer with any Regulatory Authority in any jurisdiction in connection with the issuance of the Units. As a result of acquiring the Units pursuant to such exemptions: |
(i) | certain protections, rights and remedies provided by the Securities Laws, including under the B.C. Act, including certain statutory rights of rescission or damages and certain statutory remedies against an issuer, underwriters, auditors, directors and officers that are available to investors who acquire securities offered by a prospectus or registration statement, may not be available to the Subscriber; |
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(ii) | the common law may not provide investors with an adequate remedy in the event that they suffer investment losses in connection with securities acquired in a private placement; |
(iii) | the Subscriber may not receive certain information that would otherwise be required to be given under the Securities Laws, including under the B.C. Act; and |
(iv) | the Issuer is relieved from certain obligations that would otherwise apply under the Securities Laws, including under the B.C. Act; |
(n) | the Subscriber has not received or been provided with a prospectus or offering memorandum, within the meaning of the Securities Laws, or any sales or advertising literature in connection with the Offering. The Subscriber’s decision to subscribe for the Units was not based upon, and the Subscriber has not relied upon, any verbal or written representations as to fact made by or on behalf of the Issuer and their respective directors, officers, employees, agents and representatives. The Subscriber’s decision to subscribe for the Units was based solely upon this Subscription Agreement, and information about the Issuer which is publicly available; |
(o) | except for the Subscriber’s knowledge regarding its subscription for Units hereunder, the Subscriber has no knowledge of a “material fact” or a “material change” (as those terms are defined in the applicable Securities Laws) in the affairs of the Issuer that has not been generally disclosed; |
Investment Suitability
(p) | the Subscriber confirms that the Subscriber: |
(i) | has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment in the Securities; |
(ii) | is capable of assessing the proposed investment in the Securities as a result of the Subscriber’s own experience or as a result of advice received from a person registered under applicable Securities Laws; |
(iii) | is aware of the characteristics of the Securities and the risks relating to an investment therein; and |
(iv) | is able to bear the economic risk of loss of its investment in the Securities; |
(q) | the Subscriber understands and acknowledges that: |
(i) | no securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities; |
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(ii) | there is no government or other insurance covering the Securities; |
(iii) | there are risks associated with the purchase of the Securities; |
(iv) | there are restrictions on the Subscriber’s ability to resell the Securities and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Securities; |
(v) | the Issuer has advised the Subscriber that the Issuer is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell securities through a person registered to sell securities under Securities Laws and, as a consequence of acquiring securities pursuant to this exemption, certain protections, rights and remedies provided by Securities Laws, including statutory rights of rescission or damages, will not be available to the Subscriber; and |
(vi) | that it may lose its entire investment in the Securities; |
No Representations
(r) | the Subscriber confirms that none of the Issuer or the Agent, or any of their respective directors, employees, officers or affiliates have made any representations (written or oral) to the Subscriber: |
(i) | regarding the future value of the Securities; |
(ii) | that any person will resell or repurchase the Securities; |
(iii) | that any person will refund the purchase price of the Securities other than as provided in this Subscription Agreement; or |
(iv) | that any of the Issuer’s securities will be listed and posted for trading on a stock exchange or that an application has been made to list and post any of the Issuer’s securities for trading on a stock exchange, other than the Issuer’s common shares on the Exchange, OTCQX or FSE; |
Limitations on Resale
(s) | the Subscriber understands and acknowledges that: |
(i) | the Securities will be subject to certain resale and transfer restrictions under applicable Securities Laws; and |
(ii) | the Securities may be subject to certain resale and transfer restrictions under the rules and policies of the Exchange; |
(t) | the Subscriber acknowledges that it has been advised to consult its own legal advisors with respect to applicable resale and transfer restrictions, that it is solely responsible for complying with such restrictions and it agrees to comply with the restrictions referred to in paragraph (s) above and all other applicable resale and transfer restrictions. The Subscriber will comply with all applicable Securities Laws concerning the subscription, purchase, holding and resale of the Units and will not resell any of the Securities except in accordance with the provisions of applicable Securities Laws. In this regard, the Subscriber acknowledges that the Issuer may be required to put the following legends on any certificates representing the Unit Shares, Warrants and Warrant Shares if issued prior to the expiry of the applicable hold period: |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [four months plus one day after the Closing Date].”
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“THE SECURITIES REPRESENTED HEREBY [FOR WARRANTS INCLUDE: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
[FOR WARRANTS ONLY: THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.]
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(u) | the Subscriber acknowledges that it is responsible for obtaining its own legal, investment and other professional advice with respect to the resale restrictions, “hold periods” and legending requirements to which the Securities are or may be subject under the 1933 Act. The Subscriber has not relied upon any statements made by or purporting to have been made on behalf of the Issuer, the Agent or their respective counsel with respect to such matters; |
(v) | the Subscriber acknowledges and agrees that the Issuer shall make a notation on its records or give instructions to the transfer agent of the Subscriber’s Units in order to implement the restrictions on transfer set out in the Subscription Agreement and applicable Securities Laws; |
(w) | the Subscriber acknowledges that there is no market for the Warrants and none is expected to develop; |
United States Securities Laws
(x) | the Subscriber acknowledges and agrees that the Subscriber has indicated above that the Subscriber is not a U.S. Purchaser, has executed and delivered Schedule C hereto (Regulation S Certificate) and hereby is deemed to have made the representations, warranties and acknowledgments contained therein as if set forth herein in full; |
Not Proceeds of Crime
(y) | the funds representing the Subscription Price which will be advanced by the Subscriber hereunder will not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (United States) (commonly referred to as the “USA PATRIOT Act”) or other similar legislation, and the Subscriber acknowledges that the Issuer and the Agent may in the future be required by law to disclose the Subscriber’s name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential basis, pursuant to the PCMLTFA. To the best of its knowledge (i) none of the subscription funds to be provided by the Subscriber (A) have been or will be derived from or related to any activity that is deemed criminal under the law of Canada, the United States or any other jurisdiction, or (B) are being tendered on behalf of a person or entity who has not been identified to the Subscriber, and (ii) it shall promptly notify the Issuer and the Agent if the Subscriber discovers that any of such representations ceases to be true, and to provide the Issuer with appropriate information in connection therewith; |
No Financial Assistance
(z) | the Subscriber has not received or expects to receive any financial assistance from the Issuer directly or indirectly, in respect of the Subscriber’s purchase of the Units; |
Future Financings
(aa) | the Subscriber acknowledges that the Issuer may complete additional financings in the future to develop the business of the Issuer and to fund its ongoing development. There is no assurance that such financing will be available and if available, on reasonable terms. Any such future financings may have a dilutive effect on current shareholders, including the Subscriber; |
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No Advertising
(bb) | the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation or on radio, television or other form of telecommunication or any other form of advertisement (including electronic display on the internet including but not limited to the Issuer’s website) or sales literature with respect to the distribution of the Units or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; |
Agent Compensation
(cc) | the Subscriber acknowledges that: |
(i) | the Issuer has agreed to pay the Agent, on Closing, a cash fee equal to 6.5% of the gross proceeds raised under the Offering; and |
(ii) | at Closing, and subject to regulatory approval (where any such approval is required), the Agent will receive options (the “Compensation Options”) exercisable at any time up to 48 months following Closing to purchase common shares in the capital of the Issuer (the “Common Shares”) in an amount equal to 6.5% of the number of Units sold in connection with the Offering, including the amount subscribed for pursuant to the exercise of the Agent’s Option, where any such exercise occurs. The Compensation Options shall be exercisable at the price of $0.79 per Unit. If the Issuer has not caused the Registration Statement to be declared effective by the SEC at or before 5:00 p.m. (Vancouver time) on the date that is four months following the Closing Date, the Agent shall be entitled to receive an additional 10% of Compensation Options, resulting in the issuance of Compensation Options in the amount of 7.15% of the number of Units sold in connection with the Offering; |
(dd) | except as disclosed above, there is no person acting or purporting to act on behalf of the Subscriber (including any Disclosed Principal), if applicable, in connection with the transactions contemplated herein who is entitled to any brokerage or finder’s fee. Except as disclosed above, if any person establishes a claim that any fee or other compensation is payable in connection with this subscription for the Units on account of the Subscriber’s subscription, the Subscriber covenants to indemnify and hold harmless the Issuer with respect thereto and with respect to all costs reasonably incurred in the defence thereof; |
Other Documents
(ee) | if required by Securities Laws or by any securities commission, stock exchange or other regulatory authority, the Subscriber will execute, deliver, file and otherwise assist the Issuer in filing, such reports, undertakings and other documents with respect to the subscription for and issuance of the Securities; |
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Subscriber’s Responsibility for Legal and Financial Advice
(ff) | the Subscriber confirms that it is responsible for obtaining its own legal, tax, investment and other professional advice with respect to the execution, delivery and performance by it of this Subscription Agreement and the transactions contemplated hereunder including the suitability of the Securities as an investment for the Subscriber, the tax consequences of purchasing and dealing with the Securities, and the resale restrictions and “hold periods” to which the Securities are or may be subject under Securities Laws. The Subscriber has not relied upon any statements made by or purporting to have been made on behalf of the Issuer or its counsel with respect to such matters; and |
(gg) | the Subscriber acknowledges that the Issuer and the Agent’s respective counsel are acting solely as counsel to the Issuer and Agent and not as counsel to the Subscriber. |
9. | Reliance on Representations, Warranties, Covenants and Acknowledgements |
The Subscriber acknowledges and agrees that the representations, warranties, covenants and acknowledgements made by the Subscriber in this Subscription Agreement, including the Schedules hereto, are made with the intention that they may be relied upon by the Issuer and Agent in determining the Subscriber’s eligibility (and, if applicable, the eligibility of others for whom the Subscriber is contracting hereunder) to purchase the Units under Securities Laws. The Subscriber further agrees that by accepting the Units, the Subscriber will be representing and warranting that such representations, warranties, covenants and acknowledgements are true as at the Closing Time with the same force and effect for the benefit of the Issuer as if they had been made by the Subscriber at the Closing Time and that they will survive the purchase by the Subscriber of the Units and will continue in full force and effect for the benefit of the Issuer and the Agent notwithstanding any subsequent disposition by the Subscriber of any of the Units.
10. | Indemnity |
The Subscriber acknowledges that the Issuer, the Agent and their respective counsel are relying upon the representations, warranties, covenants and acknowledgements of the Subscriber set forth herein (including the Schedules attached hereto) in determining the eligibility of the Subscriber (or, if applicable, the eligibility of another on whose behalf the Subscriber is contracting hereunder to subscribe for Units) to purchase Units under the Offering, and hereby agrees to indemnify the Issuer, the Agent and their respective directors, officers, employees, advisers, affiliates, shareholders and agents (including their legal counsel) against all losses, claims, costs, expenses, damages or liabilities that they may suffer or incur as a result of or in connection with their reliance on such representations, warranties, acknowledgements and covenants. The Subscriber undertakes to immediately notify the Issuer and the Agent of any change in any statement or other information relating to the Subscriber set forth herein that occurs prior to the Closing Time.
11. | Subscriber’s Costs |
Subject to the terms of a written agreement between the Agent and the Subscriber, the Subscriber acknowledges and agrees that all costs incurred by the Subscriber (including any fees and disbursements of any counsel retained by the Subscriber) relating to the sale of the Units to the Subscriber will be borne by the Subscriber.
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12. | Consent to the Disclosure of Information |
This Agreement and the attachments hereto require the Subscriber to provide certain Personal Information to the Issuer and the Agent. Such information is being collected by the Issuer and the Agent for the purposes of completing the Offering of the Units, which includes, without limitation, determining the Subscriber’s eligibility to purchase the Subscriber’s Units under applicable Securities Laws, preparing and registering any certificates representing the Subscriber’s Securities to be issued to the Subscriber, completing filings required by any stock exchange or securities regulatory authority, indirect collection of information by the applicable stock exchange or Regulatory Authority under authority granted in applicable securities legislation and the administration and enforcement of the securities legislation of an applicable jurisdiction by the applicable Regulatory Authority. The Subscriber acknowledges that the Subscriber’s Personal Information, including details of its subscription hereunder, will be disclosed by the Issuer and the Agent to: (a) stock exchanges or securities regulatory authorities; (b) the Issuer’s registrar and transfer agent; and (c) any of the other agents or representatives of the Issuer and the Agent, including legal counsel to the Issuer and the Agent; and may be disclosed by the Issuer or the Agent to (d) the Canada Revenue Agency; and (e) any other person to whom it is required to disclose such information under applicable legislation or authority. By executing this Subscription Agreement, the Subscriber consents to and authorizes the foregoing collection, use and disclosure of the Subscriber’s Personal Information. The Subscriber also consents to and authorizes the filing of copies or originals of any of this Subscription Agreement (including attachments) below as may be required to be filed with any stock exchange or securities regulatory authority in connection with the transactions contemplated hereby. In addition, the Subscriber consents to and authorizes the collection, use and disclosure of all such Personal Information by the Exchange and other regulatory authorities in accordance with their requirements, including the provision to third party service providers, from time to time. The contact information for the officer of the Issuer who can answer questions about this collection of information is as follows:
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO
80112
Attn: John F. Ashburn, Jr.
Tel: (720) 639-4650
email: jashburn@niocorp.com
For Subscribers with questions about the collection of Personal Information by the Ontario Securities Commission, please contact the Administrative Support Clerk at the Ontario Securities Commission, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, M5H 3S8, Tel: (416) 593-3684.
13. | United States Registration Rights |
(a) | The Issuer shall use commercially reasonable efforts to (i) prepare and file with the SEC as soon as practicable after the Closing Date and receipt by the Company from the Agent of selling securityholder forms for purchasers under the Offering, a registration statement (on Form S-3, S-1, or other appropriate registration statement form reasonably acceptable to the Subscriber) under the 1933 Act (the “Registration Statement”), at the sole expense of the Issuer (except as specifically provided in Section 13(c) hereof), in respect of the Subscriber, so as to permit a public offering and resale of the Unit Shares and Warrant Shares (collectively, the “Registrable Securities”) in the United States under the 1933 Act by the Subscriber as a selling stockholder and not as underwriter; and (ii) use commercially reasonable efforts to cause a Registration Statement to be declared effective by the SEC at or before 5:00 p.m. (Vancouver time) on the date that is four months following the Closing Date. The Issuer will notify the Subscriber of the effectiveness of the Registration Statement (the “Effective Date”) within three (3) Trading Days (days on which the Exchange is open for trading) (each, a “Trading Day”). The initial Registration Statement shall cover the resale of 100% of the Registrable Securities, for an offering to be made on a continuous basis pursuant to Rule 415 (as promulgated by the SEC pursuant to the 1933 Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such rule). |
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(b) | The Issuer will use commercially reasonable efforts to maintain the Registration Statement or post-effective amendment filed under this Section 13 effective under the 1933 Act until the earlier of the date (i) all of the Registrable Securities have been sold pursuant to such Registration Statement or Rule 144, if available, or (ii) six-months following the expiration of the Warrants (the “Effectiveness Period”). |
(c) | All fees, disbursements and out-of-pocket expenses and costs incurred by the Issuer in connection with the preparation and filing of the Registration Statement and in complying with applicable securities and “blue sky” laws (including, without limitation, all attorneys’ fees of the Issuer, registration, qualification, notification and filing fees, printing expenses, escrow fees, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration) shall be borne by the Issuer. The Subscriber shall bear the cost of underwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Registrable Securities being registered and the fees and expenses of its counsel, if any. The Issuer shall qualify any of the Registrable Securities for sale in such states as the Subscriber reasonably designates. However, the Issuer shall not be required to qualify in any state which will require an escrow or other restriction relating to the Issuer and/or the sellers, or which will require the Issuer to qualify to do business in such state or require the Issuer to file therein any general consent to service of process. The Issuer at its expense will supply the Subscriber with copies of the applicable Registration Statement included therein and other related documents in such quantities as may be reasonably requested by the Subscriber. |
(d) | If at any time or from time to time after the Effective Date, the Issuer notifies the Subscriber in writing of the existence of a Potential Material Event (as defined in Section (e) below), the Subscriber shall not offer or sell any Registrable Securities or engage in any other transaction involving or relating to Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Subscriber receives written notice from the Issuer that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential Material Event. If a Potential Material Event shall occur prior to the date a Registration Statement is required to be filed, then the Issuer’s obligation to file such Registration Statement shall be delayed without penalty for not more than thirty (30) calendar days. The Issuer must, if lawful, give the Subscriber notice in writing at least two (2) Trading Days prior to the first day of the blackout period. |
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(e) | “Potential Material Event” means any of the following: (i) the possession by the Issuer of material information not ripe for disclosure in a registration statement, as determined in good faith by the Chief Executive Officer, President or the Board of Directors of the Issuer that disclosure of such information in a Registration Statement would be detrimental to the business and affairs of the Issuer; or (ii) any material engagement or activity by the Issuer which would, in the good faith determination of the Chief Executive Officer, President or the Board of Directors of the Issuer, be adversely affected by disclosure in a registration statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive Officer, President or the Board of Directors of the Issuer that the applicable Registration Statement would be materially misleading absent the inclusion of such information; provided that, (i) the Issuer shall not use such right with respect to the Registration Statement for more than an aggregate of 60 days in any 12-month period, provided that the issuer may not use such right for more than 21 consecutive days; and (ii) the number of days the Issuer is required to keep the Registration Statement effective shall be extended by the number of days for which the Issuer shall have used such right. |
(f) | The Subscriber will cooperate with the Issuer in all respects in connection with this Agreement, including timely supplying all information reasonably requested by the Issuer (which shall include completing the Selling Shareholder Questionnaire attached hereto as Schedule E, and all information regarding the Subscriber and proposed manner of sale of the Registrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connection with the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offering is an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. Any delay or delays caused by the Subscriber, or by any other purchaser of securities of the Issuer having registration rights similar to those contained herein, by failure to cooperate as required hereunder shall not constitute a breach or default of the Issuer under this Subscription Agreement. |
(g) | Whenever the Issuer is required by any of the provisions of this Subscription Agreement to effect the registration of any of the Registrable Securities under the 1933 Act, the Issuer shall (except as otherwise provided in this Subscription Agreement), as expeditiously as possible, subject to the assistance and cooperation as reasonably required of the Subscriber with respect to each Registration Statement: |
(i) | furnish to the Subscriber such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, in conformity with the requirements of the 1933 Act, and such other documents as the Subscriber may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Subscriber; |
(ii) | register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Subscriber shall reasonably request (subject to the limitations set forth in Section (b) above), and do any and all other acts and things which may be necessary or advisable to enable the Subscriber to consummate the public sale or other disposition in such jurisdiction of the securities owned by the Subscriber; |
(iii) | cause the Registrable Securities to be quoted or listed on each service on which the common shares of the Issuer are then quoted or listed; |
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(iv) | notify the Subscriber, at any time when a prospectus relating thereto covered by the Registration Statement is required to be delivered under the 1933 Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and the Issuer shall prepare and file a curative amendment as promptly as commercially reasonable; |
(v) | as promptly as practicable after becoming aware of such event, notify the Subscriber, (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any stop order or other suspension of the effectiveness of the Registration Statement at the earliest possible time and take all lawful action to effect the withdrawal, rescission or removal of such stop order or other suspension; and |
(vi) | provide a transfer agent and registrar for all securities registered pursuant to the Registration Statement and a CUSIP number for all such securities. |
(h) | With respect to any sale of Registrable Securities pursuant to a Registration Statement filed pursuant to this Section 13, the Subscriber hereby covenants with the Issuer (i) not to make any sale of the Registrable Securities without effectively causing the prospectus delivery requirements under the 1933 Act to be satisfied and (ii) to notify the Issuer promptly upon disposition of all of the Registrable Securities. |
The Subscriber understands and acknowledges that, except as set forth above, the Issuer is not obligated to file and has no present intention of filing with the United States Securities and Exchange Commission or with any state securities commission any registration statement in respect of resales of the Securities in the United States. The Subscriber has reviewed the above and, if the Subscriber desires to be named in the Registration Statement, the Subscriber has executed and delivered the signature page to the Registration Rights Agreements and completed and delivered the Selling Shareholder Questionnaire attached as Schedule E hereto.
14. | United States Securities Law Indemnification |
(a) | The Issuer agrees to indemnify and hold harmless each Subscriber, their respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Subscriber within the meaning of Section 15 of the 1933 Act, and each person who controls any underwriter within the meaning of Section 15 of the 1933 Act, from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which such Subscriber or such other indemnified person may become subject (including in settlement of litigation, whether commenced or threatened) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in the Registration Statement, including all documents filed as a part thereof and information deemed to be a part thereof, on the effective date thereof, or any amendment or supplements thereto, or arise out of any failure by the Issuer to fulfill any undertaking or covenant included in the Registration Statement or to perform its obligations hereunder or under applicable law and the Issuer will, as incurred, reimburse such Subscriber, each of its respective officers, directors, employees, partners, legal counsel and accountants, and each person controlling such Subscriber, and each person who controls any such underwriter, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend, settling, compromising or paying such action, proceeding or claim; provided, however, that the Issuer shall not be liable in any such case to the extent that such loss, claim, damage, expense or liability (or action or proceeding in respect thereof) arises out of, or is based upon, (i) the failure of any Subscriber, or any of their agents, affiliates or persons acting on their behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities, (ii) an untrue statement or omission in such Registration Statement in reliance upon and in conformity with written information furnished to the Issuer by an instrument duly executed by or on behalf of the Subscriber, or any of its agents, affiliates or persons acting on its behalf, and stated to be specifically for use in preparation of the Registration Statement and not corrected in a timely manner by the Subscriber in writing or (iii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Subscriber prior to the pertinent sale or sales by such Subscriber and not delivered by the Subscriber to the individual or entity to which it made such sale(s) prior to such sale(s). |
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(b) | The Subscriber agrees to indemnify and hold harmless the Issuer from and against any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which the Issuer may become subject (under the 1933 Act or otherwise) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) the failure of the Subscriber or any of its agents, affiliates or persons acting on its behalf, to comply with the covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities; or (ii) an untrue statement or alleged untrue statement of a material fact or omission to state a material fact in the Registration Statement in reliance upon and in conformity with written information furnished to the Issuer by an instrument duly executed by or on behalf of such Subscriber and stated to be specifically for use in preparation of the Registration Statement; provided, however, that the Subscriber shall not be liable in any such case for (i) any untrue statement or alleged untrue statement or omission in any prospectus or Registration Statement which statement has been corrected, in writing, by such Subscriber and delivered to the Issuer before the sale from which such loss occurred; or (ii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendment thereto, that was delivered to the Subscriber prior to the pertinent sale or sales by the Subscriber and delivered by the Subscriber to the individual or entity to which it made such sale(s) prior to such sale(s), and the Subscriber, severally and not jointly, will, as incurred, reimburse the Issuer for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. Notwithstanding the foregoing, the Subscriber shall not be liable or required to indemnify the Issuer in the aggregate for any amount in excess of the net amount received by the Subscriber from the sale of the Registrable Securities, to which such loss, claim, damage, expense or liability (or action proceeding in respect thereof) relates. |
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(c) | Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 14, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action and, subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to assume the defense thereof. After notice from the indemnifying person to such indemnified person of the indemnifying person’s election to assume the defense thereof, the indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would, in the opinion of counsel to the indemnified party, make it inappropriate under applicable laws or codes of professional responsibility for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, further, that the indemnifying person shall not be obligated to assume the expenses of more than one counsel to represent all indemnified persons. In the event of such separate counsel, such counsel shall agree to reasonably cooperate. |
(d) | If the indemnification provided for in this Section 14 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Issuer on the one hand and the Subscriber, or its agents, affiliates or persons acting on its behalf, on the other in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer on the one hand or the Subscriber, or its agents, affiliates or persons acting on its behalf, on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Issuer and the Subscriber agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In any event, the Subscriber shall not be liable or required to contribute to the Issuer in the aggregate for any amount in excess of the net amount received by the Subscriber from the sale of its Registrable Securities. |
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15. | Miscellaneous |
(a) | This Subscription Agreement and all related agreements between the Parties hereto shall be governed by and construed in accordance with the laws of the Province of British Columbia, without reference to its rules governing the choice or conflict of laws. The Parties hereto irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of British Columbia, sitting in the city of Vancouver, with respect to any dispute to or arising out of this Subscription Agreement. |
(b) | The Subscriber and the Issuer agree that they each will execute or cause to be executed and delivered all such further and other documents and assurances, and do and cause to be done all such further acts and things as may be necessary or desirable to give effect to this Subscription Agreement and without limiting the generality of the foregoing to do all acts and things, execute and deliver all documents, agreements and writings and provide such assurances, undertakings, information and investment letters as may be required from time to time by all applicable Regulatory Authorities or as may be required from time to time under applicable Securities Laws. |
(c) | This Subscription Agreement, which includes any interest granted or right arising under this Subscription Agreement, may not be assigned or transferred, without the written consent of the other Parties. |
(d) | Except as expressly provided in this Subscription Agreement and in the agreements, instruments and other documents contemplated or provided for herein, this Subscription Agreement contains the entire agreement between the Parties with respect to the Units and there are no other terms, conditions, representations or warranties whether expressed, implied, oral or written, by statute, by common law, by the Issuer, or by anyone else. |
(e) | Any notice or other communication to be given hereunder shall, in the case of notice to be given to: |
the Issuer, be addressed to:
NioCorp
Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO
80112
Attn: John F. Ashburn, Jr.
Tel: (720) 639-4650
email: jashburn@niocorp.com
with a copy to the Issuer’s counsel:
Blake,
Cassels & Graydon LLP
2600-595 Burrard Street
Vancouver, BC V7X 1L3
Attention: Bob
Wooder
Email: bob.wooder@blakes.com
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or to such other address, email address or person that the Party designates by notice given in accordance with the foregoing provisions. Any such notice: (i) if delivered personally or by courier, will be deemed to have been given and received on the date of such delivery provided that if such day is not a Business Day then it will be deemed to have been given and received on the first Business Day following such day; and (ii) if transmitted by email or other form of electronic communication, will be deemed to have been given on the date of transmission if sent before 5:00 p.m. (Vancouver time) on a Business Day or, if not before 5:00 p.m. (Vancouver time), on the first Business Day following the date of transmission provided that the sender has evidence of a successful transmission such as a confirmation or electronic delivery receipt.
(f) | All representations, warranties, agreements and covenants made or deemed to be made by the Issuer and the Subscriber herein will survive the execution and delivery, and acceptance, of this offer and the closing of the issue of the Units contemplated hereby. |
(g) | Subject to the terms hereof, neither this Subscription Agreement nor any provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing signed by the Party against whom any waiver, change, discharge or termination is sought. |
(h) | This Subscription Agreement shall enure to the benefit of and be binding upon the Parties and their respective heirs, executors, administrators and successors but otherwise cannot be assigned. |
(i) | This Subscription Agreement may be executed in any number of counterparts, each of which when delivered, either in original or PDF or other electronic form, shall be deemed to be an original and all of which together shall constitute one and the same document. If less than a complete copy of this Subscription Agreement is delivered to the Agent by the Subscriber (other than the execution pages of this Subscription Agreement required to be executed by the Subscriber), the Issuer and its advisors are entitled to assume, and the Subscriber shall be deemed to have represented and warranted to the Issuer, that the Subscriber accepts and agrees to all of the terms and conditions of the pages of this Subscription Agreement that are not delivered, without any alteration. |
(j) | The Parties hereto confirm their express wish that this Subscription Agreement and all documents and agreements directly or indirectly relating hereto be drawn up in the English language. Les Parties reconnaissent leur volonté expresse que la présente convention de souscription ainsi que tous les documents et contrats s’y rattachant directement ou indirectement soient rédigés en anglais. |
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SCHEDULE A
THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS IN THE UNITED STATES AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S OF THE 1933 ACT), EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE 1933 ACT. THIS SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT IN THE LIMITED CIRCUMSTANCES PROVIDED HEREIN PURSUANT TO TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Term
Sheet
Private Placement of Units
Issuer: | NioCorp Developments Ltd. (“NioCorp” or the “Company”). |
Offering: | Best-efforts private placement offering (the “Offering”) of up to approximately $2,000,050 in units (the “Units”) of the Company. Each Unit will consist of one common share (“Common Share”) and one common share purchase warrant (each whole warrant, a “Warrant”). |
Agent’s Option: | The Company will grant the Agent an option (the “Agent’s Option”) exercisable at any time up to and including the Closing to increase the size of the Offering by up to 15% in Units by giving written notice of the exercise of the Agent’s Option, or a part thereof, to the Company at any time up to 48 hours prior to Closing, provided that the Company and Agent may mutually agree to further increase the size of the Offering by an amount greater than the Agent’s Option. |
Pricing: | Indicative price of $0.65 per Unit, to be priced in the context of the market and to the mutual satisfaction of the Agent and the Company and in accordance with the rules and policies of the Toronto Stock Exchange (“TSX”).
Each Warrant shall entitle the holder thereof to purchase one additional Common Share of the Company (a “Warrant Share”) at an exercise price to be priced in the context of the market, but in any event equal to the lowest price allowable under the rules and policies of the TSX, exercisable at any time up to 48 months from Closing (as defined herein).
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Use of Proceeds: | Proceeds of the Offering will be used for working capital and general corporate purposes. |
Offering Jurisdictions: | The Offering will take place by way of a private placement to qualified investors in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, and otherwise in those jurisdictions where the Offering can lawfully be made. Subscribers will have a $5,000 minimum subscription and Canadian subscribers must be “accredited investors” (as defined in National Instrument 45-106 Prospectus and Registration Exemptions (“NI 45-106”)) or otherwise qualified under NI 45-106 or BC Instrument 45-534 – Exemption from prospectus requirement for certain trades to existing security holders or the provisions of various corresponding blanket orders and rules of other Canadian jurisdictions that have adopted the same or a similar exemption from the prospectus requirement. |
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Hold Period: | The securities will be subject to a “hold period” of not longer than 4 months from Closing under applicable Canadian securities laws. |
Listing: | The Company shall obtain the necessary approvals to list the Common Shares, and Common Shares issuable upon exercise of the Warrants and the Compensation Options, where any such exercise occurs, on the TSX. As promptly as practicable following the Closing (as defined herein) and the receipt by the Company from the Agent of selling securityholder forms for purchasers under the Offering and the Agent, the Company will prepare and file a registration statement and U.S. preliminary prospectus (collectively, the “Registration Statement”) under the United States Securities Act of 1933, as amended, in respect of the Common Shares and Warrant Shares sold under the Offering; provided that if the Company has not caused the Registration Statement to be declared effective by the United States Securities and Exchange Commission at or before 5:00 p.m. (Vancouver time) on November 17, 2017, then each Unit will thereafter entitle the holder to receive, for no additional consideration, an additional 10% of the Warrants underlying each Unit, resulting in the issuance of 1.1 Warrants (instead of one Warrant), with each whole Warrant being exercisable into one Warrant Share, subject to adjustment, on exercise of the Warrants. |
Eligibility for Investment: | Eligible under the usual Canadian statutes as well as for RRSPs, RESPs, RRIFs, TFSAs and DPSPs. |
Agent: | Mackie Research Capital Corporation (the “Agent”) as lead agent and sole bookrunner, and including such other syndicate members as may be determined to the mutual satisfaction of the Agent and the Company. |
Closing: | On or about the week of July 17, 2017, or such other date as is reasonable and agreed upon between the Agent and the Company (the “Closing”). |
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SCHEDULE B
Accredited Investor Status CERTIFICATE
TO BE COMPLETED BY SUBSCRIBERS THAT ARE ACCREDITED INVESTORS AND ARE RESIDENT IN CANADA OR SUBJECT TO CANADIAN SECURITIES LAWS
The categories listed herein contain certain specifically defined terms. If you are unsure as to the meanings of those terms, or are unsure as to the applicability of any category below, please contact your broker and/or legal advisor before completing this certificate.
TO: | NIOCORP DEVELOPMENTS LTD. (the “Issuer”) |
Capitalized terms used in this Schedule “B” and defined in the Subscription Agreement to which this Schedule “B” is attached have the meanings defined in the Subscription Agreement unless otherwise defined herein.
In connection with the purchase by the undersigned Subscriber of the Units, the Subscriber, on its own behalf or on behalf of each Disclosed Principal for whom the Subscriber is acting (collectively, the “Subscriber”), hereby represents, warrants, covenants and certifies to the Issuer and the Agent (and acknowledges that the Issuer, the Agent and their respective counsel are relying thereon) that:
(a) | the Subscriber is purchasing the Units as principal for its own account and not for the benefit of any other person or is deemed to be purchasing as principal pursuant to NI 45-106; |
(b) | the Subscriber is an “accredited investor” within the meaning of NI 45-106 on the basis that the Subscriber fits within one of the categories of an “accredited investor” reproduced below beside which the Subscriber has indicated the undersigned belongs to such category; |
(c) | the Subscriber was not created or used solely to purchase or hold securities as an accredited investor as described in paragraph (m) below; |
(d) | if the Subscriber is an individual purchasing under category (j), (k) or (l) below, it has completed and signed Exhibit “A” attached hereto; and |
(e) | upon execution of this Schedule “B” by the Subscriber, this Schedule “B” shall be incorporated into and form a part of the Subscription Agreement to which this Schedule “B” is attached. |
(PLEASE CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)
☐ | (a) | (i) except in Ontario, a Canadian financial institution, or a Schedule III bank; or |
(ii) in Ontario, a financial institution that is (A) a bank listed in Schedule I, II or III of the Bank Act (Canada); (B) an association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act; or (C) a loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or Ontario to carry on business in Canada or Ontario, as the case may be; | ||
☐ | (b) | the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
☐ | (c) | a subsidiary of any person or company referred to in paragraphs (a) or (b), if the person or company owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
☐ | (d) | a person or company registered under the securities legislation of a jurisdiction (province or territory) of Canada as an adviser or dealer (or in Ontario, except as otherwise prescribed by the regulations under the Securities Act (Ontario)); |
B-1
☐ | (e) | an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
☐ | (e.1) | an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
☐ | (f) | the Government of Canada or a jurisdiction (province or territory) of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
☐ | (g) | a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec; |
☐ | (h) | any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government; |
☐ | (i) | a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction (province or territory) of Canada; |
☐ | (j) | an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes, but net of any related liabilities, exceeds $1,000,000; |
☐ | (j.1) | an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000; |
☐ | (k) | an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; |
☐ | (l) | an individual who, either alone or with a spouse, has net assets of at least $5,000,000; |
☐ | (m) | a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements; |
☐ | (n) | an investment fund that distributes or has distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45-106, or (iii) a person described in sub-paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106; |
☐ | (o) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt; |
☐ | (p) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
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☐ | (q) | a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; |
☐ | (r) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
☐ | (s) | an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function; |
☐ | (t) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
☐ | (u) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; |
☐ | (v) | a person that is recognized or designated by the securities regulatory authority or, except in Québec, the regulator as an accredited investor; |
☐ | (w) | a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accredited investor’s former spouse; or |
☐ | (x) | in Ontario, such other persons or companies as may be prescribed by the regulations under the Securities Act (Ontario).
***If checking this category (x), please provide a description of how this requirement is met.
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For the purposes hereof, the following definitions are included for convenience:
(a) | “bank” means a bank named in Schedule I or II of the Bank Act (Canada); |
(b) | “Canadian financial institution” means (i) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or (ii) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada; |
(c) | “company” means any corporation, incorporated association, incorporated syndicate or other incorporated organization; |
(d) | “eligibility adviser” means: |
(i) | a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed, and |
(ii) | in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not |
(iii) | (A) | have a professional, business or personal relationship with the issuer, or any of its directors, executive officer, founders, or control persons, and |
B-3
(B) | have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the issuer or any of its directors, executive officers, founders or control persons within the previous 12 months; |
(e) | “executive officer” means, for an issuer, an individual who is: (i) a chair, vice-chair or president, (ii) a vice-president in charge of a principal business unit, division or function including sales, finance or production, or (iii) performing a policy-making function in respect of the issuer; |
(f) | “financial assets” means (i) cash, (ii) securities, or (iii) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation; |
(g) | “fully managed account” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction; |
(h) | “investment fund” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure; |
(i) | “person” includes: (i) an individual, (ii) a corporation, (iii) a partnership, trust, fund and an association, syndicate, organization or other organized group of persons whether incorporated or not, and (iv) an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative. |
(j) | “related liabilities” means (i) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or (ii) liabilities that are secured by financial assets; |
(k) | “Schedule III bank” means an authorized foreign bank named in Schedule III of the Bank Act (Canada); |
(l) | “spouse” means, an individual who, (i) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual, (ii) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or (iii) in Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); and |
(m) | “subsidiary” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary. |
In NI 45-106 a person or company is an affiliate of another person or company if one of them is a subsidiary of the other, or if each of them is controlled by the same person.
In NI 45-106 and except in Part 2 Division 4 (Employee, Executive Officer, Director and Consultant Exemption) of NI 45-106, a person (first person) is considered to control another person (second person) if (a) the first person, beneficially owns or directly or indirectly exercises control or direction over securities of the second person carrying votes which, if exercised, would entitle the first person to elect a majority of the directors of the second person, unless that first person holds the voting securities only to secure an obligation, (b) the second person is a partnership, other than a limited partnership, and the first person holds more than 50% of the interests of the partnership, or (c) the second person is a limited partnership and the general partner of the limited partnership is the first person.
B-4
The foregoing representations contained in this Accredited Investor Status Certificate are true and accurate as of the date of this Accredited Investor Status Certificate and will be true and accurate as of the Closing Time and the Subscriber acknowledges that this Accredited Investor Status Certificate is incorporated into and forms a part of the Subscription Agreement to which it is attached. If any such representations shall not be true and accurate prior to the Closing Time, the undersigned shall give immediate written notice of such fact to the Issuer and the Agent prior to the Closing Time.
Dated: | Signed: | |||
Witness (If Subscriber is an Individual)
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Print the name of Subscriber
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Print Name of Witness
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If Subscriber is a corporation, |
B-5
EXHIBIT A TO SCHEDULE B
ACCREDITED INVESTOR RISK ACKNOWLEDGMENT FORM
THIS “EXHIBIT A” TO SCHEDULE “B” IS TO BE COMPLETED BY ACCREDITED INVESTORS WHO COMPLETED SCHEDULE “B” AND ARE INDIVIDUALS SUBSCRIBING UNDER CATEGORIES (J), (K) OR (L) IN SCHEDULE “B” TO WHICH THIS EXHIBIT “A” IS ATTACHED.
This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment.
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SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER | |||
1. About your investment | |||
Type of securities: Units (each comprised of one common share and one common share purchase warrant) | Issuer: NioCorp Developments Ltd. | ||
Purchased from: NioCorp Developments Ltd. | |||
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER | |||
2. Risk acknowledgement | |||
This investment is risky. Initial that you understand that: | Your
Initials | ||
Risk of loss - You could lose your entire investment of $ _____________ . [Instruction: Insert the total dollar amount of the investment.] | |||
Liquidity risk - You may not be able to sell your investment quickly - or at all. | |||
Lack of information - You may receive little or no information about your investment. | |||
Lack of advice - You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca. | |||
3. Accredited investor status | |||
You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria. | Your
initials | ||
● Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.) | |||
● Your net income before taxes combined with your spouse’s was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year. | |||
● Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities. | |||
● Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.) | |||
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4. Your name and signature | ||
By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form. | ||
First and last name (please print): | ||
Signature: | Date: | |
SECTION 5 TO BE COMPLETED BY THE SALESPERSON | ||
5. Salesperson information | ||
[Instruction: The salesperson is the person who meets with, or provides information to, the purchaser with respect to making this investment. That could include a representative of the issuer or selling security holder, a registrant or a person who is exempt from the registration requirement.] | ||
First and last name of salesperson (please print): | ||
Telephone: | Email: | |
Name of firm (if registered): | ||
SECTION 6 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER | ||
6. For more information about this investment | ||
NioCorp Developments Ltd. 7000 South Yosemite Street, Suite 115 Centennial, CO 80112 Attn: John F. Ashburn, Jr. Tel: (720) 639-4650 email: jashburn@niocorp.com For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca. |
Form instructions:
1. | This form does not mandate the use of a specific font size or style but the font must be legible. |
2. | The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form. |
3. | The purchaser must sign this form. Each of the purchaser and the issuer or selling security holder must receive a copy of this form signed by the purchaser. The issuer or selling security holder is required to keep a copy of this form for 8 years after the distribution. |
B-7
SCHEDULE C
REGULATION S CERTIFICATE
TO BE COMPLETED BY PURCHASERS THAT ARE NOT RESIDENT IN THE UNITED STATES AND ARE NOT A U.S. PURCHASER
THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS IN THE UNITED STATES AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE 1933 ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION S OF THE 1933 ACT), EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS OF THE 1933 ACT, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE 1933 ACT.
In connection with the undersigned’s (the “Subscriber”) subscription for Units of the Issuer (a “Unit”), each Unit being comprised of one common share in the capital of the Issuer (a “Unit Share”) and one common share purchase warrant (a “Warrant”) of the Issuer and each Warrant entitling the holder to acquire one additional common share in the capital of the Issuer (a “Warrant Share”), exercisable for a period of 48 months following the Closing at an exercise price of C$0.79 per Warrant Share, by executing this Regulation S Certificate, the Subscriber represents, warrants and covenants to and with the Issuer and the Agent as follows (capitalized terms used herein and not otherwise defined shall have the meaning given in the Subscription Agreement to which this Regulation S Certificate is attached):
(a) | the Subscriber understands that the Securities have not been and will not be, prior to distribution, registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state of the United States and that the offer and sale of the Units to it will be made in reliance upon an exclusion from the registration requirements of the 1933 Act under Regulation S thereunder (“Regulation S”); |
(b) | the Subscriber purchasing the Securities for its own account or for the account of one or more persons for whom it is exercising sole investment discretion, (a “Disclosed Subscriber”), for investment purposes only and not with a view to resale or distribution in violation of applicable securities laws and, in particular, neither it nor any Disclosed Subscriber for whose account it is purchasing the Securities is an underwriter, agent, dealer or “Distributor” as defined in Rule 902(d) of Regulation S or has any intention to distribute either directly or indirectly any of the Securities in the United States or to, or for the account or benefit of, a U.S. person (as defined in Regulation S, a “U.S. Person”) or person in the United States; provided, however, that this paragraph shall not restrict the Subscriber from selling or otherwise disposing of any of the Securities pursuant to registration thereof pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements; |
(c) | the Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Securities and is able, without impairing its financial condition, to hold such Securities for an indefinite period of time and to bear the economic risks of, and withstand a complete loss of, such investment; |
(d) | neither the Subscriber nor the Disclosed Subscriber, if any, is a U.S. Person; |
(e) | (A) The Subscriber and the Disclosed Subscriber, if any, are not resident in the United States and are not purchasing the Securities for the account or benefit of a U.S. Person or person in the United States, (B) the Units were not offered to it or the Disclosed Subscriber, if any, in the United States and (C) at the time its buy order was made and the Subscription Agreement was executed, it (or its authorized signatory) were outside the United States; |
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(f) | the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the 1933 Act; |
(g) | the Subscriber did not receive the offer to purchase the Securities as a result of, nor will it engage in, any directed selling efforts (as defined in Regulation S); |
(h) | the Subscriber agrees not to engage in hedging transactions in the Securities except in compliance with the 1933 Act; |
(i) | the Subscriber agrees that prior to the expiration of the one-year distribution compliance period set forth in Rule 903(b)(3) of Regulation S under the 1933 Act with regard to the Securities, it will not offer, sell or transfer, directly or indirectly, any of the Securities except in accordance with the provisions of Regulation S, pursuant to registration under the 1933 Act or pursuant to an available exemption from registration under the 1933 Act; |
(j) | the Subscriber understands and acknowledges that the Securities are “restricted securities” within the meaning of Rule 144 under the 1933 Act, and that if in the future it decides to offer, resell, pledge or otherwise transfer any of such securities, such securities may be offered, resold, pledged or otherwise transferred, directly or indirectly, only (a) to the Issuer; (b) pursuant to an effective registration statement under the 1933 Act; (c) in accordance with Rule 144 under the 1933 Act, if available, and, in each case, in compliance with any applicable securities laws of any state of the United States; or (d) pursuant to another exemption from the registration requirements under the 1933 Act and any applicable securities laws of any state of the United States, after providing an opinion of counsel, of recognized standing, in form and substance reasonably satisfactory to the Issuer, to the effect that the proposed transfer may be effected without registration under the 1933 Act |
(k) | the Subscriber acknowledges and agrees that the Issuer is hereby bound by this Agreement and its agreements with its transfer agent to refuse to register any transfer of the Securities not made in accordance with Regulation S, pursuant to registration under the 1933 Act or pursuant to an available exemption from registration under the 1933 Act and in compliance with any applicable local laws and regulations; the Subscriber consents to the Issuer making a notation on its records or giving instructions to any transfer agent of the Securities in order to implement the restrictions on transfer set forth and described herein; |
(l) | the Subscriber acknowledges that upon the issuance of the Securities, and until such time as the same is no longer required under the applicable requirements of the 1933 Act or applicable state securities laws and regulations, the certificates representing the Securities, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form: |
“THE SECURITIES REPRESENTED HEREBY [For warrants Include: and the securities issuable upon exercise hereof] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. Securities Act”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE securities, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COmpany”), THAT THESE securities MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, directly or indirectly ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
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if any of the Securities are being sold pursuant to clause (C) in the legend above, the legend may be removed by delivery to Computershare Investor Services Inc. of an opinion of counsel of recognized standing in form and substance satisfactory to the Issuer, to the effect that the legend is no longer required under applicable requirements of the 1933 Act;
(g) | the Subscriber acknowledges that the Warrants may not be exercised unless exemptions are available from the registration requirements of the 1933 Act and the securities laws of all applicable states of the United States, and the holder has furnished an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Issuer to such effect; provided that a holder of warrants (a “Warrantholder”) will not be required to deliver an opinion of counsel in connection with its due exercise of the Warrants that comprise part of the Units purchased pursuant to the offering, for its own account or for the account of the original beneficial purchaser, if any, at a time when the Warrantholder and such original beneficial purchaser, if any, are outside the United States, are not U.S. Persons and are not exercising on behalf of U.S. Persons or persons in the United States and its representations and warranties contained in this Regulation S Certificate attached hereto remain true and correct in respect to the exercise of the Warrants and the holder represents to the Issuer as such. |
(h) | Upon the original issuance of the Warrants and until such time as is no longer required under applicable requirements of the 1933 Act or applicable state securities laws, all certificates representing the Warrants and all certificates issued in exchange therefor or in substitution thereof, shall bear a legend substantially in the following form: |
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.”
(m) | the Subscriber acknowledges that the Issuer is not a “foreign issuer” as defined in Regulation S and therefore, pursuant to Rule 905 of Regulation S, the United States securities law legend set forth above may not be removed from certificates representing the Securities upon any resale made pursuant to Rule 903 or 904 of Regulation S; therefore the certificates representing the Securities which bear such legend may not constitute “good delivery” in settlement of transactions on stock exchanges; |
C-3
(n) | the Subscriber understands that (i) the Issuer may be deemed to be an issuer that is, or that has been at any time previously, an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents (a “Shell Company”), (ii) if the Issuer is deemed to be, or to have been at any time previously, a Shell Company, Rule 144 under the 1933 Act may not be available for resales of the Securities, and (iii) except as set forth in the Subscription Agreement, the Issuer is not obligated to make Rule 144 under the 1933 Act available for resales of the Securities; |
(o) | the Subscriber has been independently advised as to the applicable hold period and restrictions with respect to trading imposed in respect of the Securities by securities legislation in the jurisdiction in which it resides, and confirms that no representation has been made respecting the applicable hold periods for such Securities and is aware of the risks and other characteristics of the Securities and of the fact that the Subscriber may not be able to resell any of the Securities except in accordance with applicable securities legislation and regulatory policy; and |
(p) | the Subscriber understands and acknowledges that it is making the representations and warranties and agreements contained herein with the intent that the they may be relied upon by the Issuer, in determining its eligibility or (if applicable) the eligibility of others on whose behalf it is contracting hereunder to purchase the Units. |
The Subscriber undertakes to notify the Issuer and the Agent immediately at the principal offices of the Issuer of any change in any representation, warranty or other information relating to the Subscriber set forth herein which takes place prior to the Closing.
The Issuer shall be entitled to rely on delivery of a facsimile or PDF copy of this Regulation S Certificate.
DATED this________ day of ________________, 2017.
(Name of Subscriber - please print) | ||
by: | ||
(Official Capacity or Title - please print) | ||
Authorized Signature | ||
(Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.) |
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SCHEDULE D
EXISTING SECURITY HOLDER CERTIFICATE
TO BE COMPLETED BY SUBSCRIBERS THAT ARE NOT ACCREDITED INVESTORS, ARE RESIDENT IN BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, ONTARIO OR NEW BRUNSWICK, AND ARE SUBSCRIBING UNDER THE EXISTING SECURITY HOLDER EXEMPTION
Capitalized terms used in this Schedule “D” and defined in the Subscription Agreement to which this Schedule “D” is attached have the meanings defined in the Subscription Agreement unless otherwise defined herein.
In connection with the purchase by the undersigned Subscriber of the Units, the Subscriber, on its own behalf or on behalf of each Disclosed Principal for whom the Subscriber is acting (collectively, the “Subscriber”), hereby represents, warrants, covenants and certifies to the Issuer and the Agent (and acknowledges that the Issuer, the Agent and their respective counsel are relying thereon) that:
(a) | on or before July 3, 2017 (the “Record Date”) the Subscriber acquired and continues to hold a common share of the Issuer; |
(b) | the Subscriber is purchasing the Units as principal for its own account, not for the benefit of any other person; and |
(c) | one of the following applies: |
(i) | the Subscriber is resident in Alberta, British Columbia, Saskatchewan, Ontario or New Brunswick and has obtained advice regarding the suitability of the subscribed for Units from an Investment Dealer, as defined in National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations, registered in such province; or |
(ii) | the Subscriber is resident in Alberta, British Columbia, Saskatchewan, Ontario or New Brunswick and the aggregate acquisition cost of the above subscribed for Units, when combined with the acquisition cost to the Subscriber of all common shares of the Issuer distributed pursuant to one of (i) BC Instrument 45-534 Exemption from prospectus requirement for certain trades to existing security holders in British Columbia, (ii) Alberta Securities Commission Rule 45-513 Prospectus exemption for distribution to existing security holders in Alberta, (iii) Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions in Ontario, (iv) General Order 45-926 Exemption from prospectus requirement for certain trades to existing security holders in Saskatchewan, or (v) Blanket Order 45-505 - Prospectus Exemption for Distribution to Existing Security Holders in New Brunswick in the last 12 months, does not exceed $15,000. |
In the event that the Subscriber fully complies with and solely relies upon the Existing Security Holding Exemption, then by accepting this Subscription Agreement, the Issuer hereby represents and warrants to the Subscriber that:
(a) | the Issuer’s “documents” and “core documents”, as those terms are defined in Section 140.1 of the B.C. Act, Section 17.01 of the Securities Act (Alberta), Section 136.01 of The Securities Act, 1988 (Saskatchewan), Section 138.1 of the Securities Act (Ontario) and Section 161.1 of the Securities Act (New Brunswick), do not contain a misrepresentation; and |
(b) | there is no material fact or material change related to the Issuer which has not been generally disclosed. |
D-1
In the event that the Subscriber fully complies with and solely relies upon the Existing Security Holding Exemption, then by accepting this Subscription Agreement, the Issuer shall provide the Subscriber with the following contractual right of action against the Issuer for rescission or damages in respect of the Subscriber’s subscription for the Securities if the Subscriber is resident in British Columbia, Saskatchewan or New Brunswick (the “Contractual Right”). The Contractual Right:
(a) | is available to the Subscriber if the Issuer’s “documents” or “core documents”, as those terms are defined in Section 140.1 of the B.C. Act, Section 136.01 of the Securities Act, 1988 (Saskatchewan) and Section 161.1 of the Securities Act (New Brunswick), contain a misrepresentation which was not corrected before the Subscriber acquired the Units, without regard to whether the Subscriber relied on such misrepresentation; |
(b) | is enforceable by the Subscriber delivering a notice to the Issuer: |
(i) | in the case of an action for rescission, within 180 days after execution of this Subscription Agreement by the Subscriber, or |
(ii) | in the case of an action for damages, before the earlier of: |
A. | 180 days after the Subscriber first has knowledge of the facts giving rise to the cause of action, or |
B. | three years after execution of this Subscription Agreement by the Subscriber; |
(c) | is subject to the defense that the Subscriber had knowledge of the misrepresentation; |
(d) | in the case of an action for damages, limits the maximum amount recoverable by the Subscriber, as follows: |
(i) | to not exceed the aggregate Subscription Price for each Unit subscribed for by the Subscriber hereunder; and |
(ii) | to not include all or any part of the damages that the Issuer proves does not represent the depreciation in value of the Units resulting from the misrepresentation; and |
(e) | is in addition to, and does not detract from, any other right of the Subscriber. |
[Remainder of Page Intentionally Left Blank]
D-2
The representations, warranties, statements and covenants made in this Existing Security Holder Certificate are true and accurate as of the date of this Existing Security Holder Certificate and will be true and accurate as of the Closing Time and the undersigned acknowledges that this Existing Security Holder Certificate is incorporated into and forms part of the Subscription Agreement to which it is attached. If any such representation, warranty, statement or covenant of the Subscriber becomes untrue or inaccurate prior to the Closing Time, the Subscriber shall give the Issuer and Agent immediate written notice thereof.
DATED _____________________________, 2017.
Name of Subscriber [Please Print] | ||
Witness (If Subscriber is an individual) | Signature of Subscriber or Authorized Signatory of Subscriber | |
Name of Witness [Please Print] | Name and Office of Authorized Signatory of Subscriber [Please Print] | |
Address of Subscriber |
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SCHEDULE E
SELLING SHAREHOLDER
QUESTIONNAIRE
TO BE COMPLETED BY ANY PURCHASER THAT DESIRES TO BE NAMED IN THE RESALE REGISTRATION STATEMENT
This questionnaire is being sent to each selling shareholder of NioCorp Developments Ltd. (the “Company”) that purchased the Units in the offering (the “Offering”). Each Unit shall be comprised of one common share (each, a “Share”) of the Company and one common share purchase warrant (each, a “Warrant”), each of which Warrants shall entitle the holder thereof to purchase one additional common share (each, a “Warrant Share”) of the Company at an exercise price of $0.79 per Warrant, subject to certain conditions. We refer to the Shares and the Warrant Shares to be acquired upon exercise of the Warrants collectively, as the “Registrable Securities”. The undersigned understands that it will be named as a selling shareholder in the Company’s resale registration statement to be filed with the Securities and Exchange Commission (the “Resale Registration Statement”). The Resale Registration Statement registers for resale under the Securities Act of 1933, as amended (the “Securities Act”), the Shares and Warrant Shares underlying the Units that the undersigned will beneficially own at the closing of the Offering (the “Registrable Securities”). The Company will use the information that the undersigned provides in this Questionnaire to ensure the accuracy of the Resale Registration Statement.
Certain legal consequences arise from being named as a selling shareholder in the Resale Registration Statement. Accordingly, holders and beneficial owners of securities to be registered under the Resale Registration Statement are advised to consult their own securities counsel regarding the consequences of being named or not being named as a selling shareholder in the Resale Registration Statement.
The undersigned acknowledges that by completing, dating, executing and returning this Questionnaire to the Company, the undersigned is giving written notice to the Company of its desire to have the securities disclosed in response to Question 5(c) of this Questionnaire included in the Resale Registration Statement.
Please answer every question.
If the answer to any question is “none” or “not applicable,” please so state.
1. Name. Type or print the full legal name of the selling shareholder.
__________________________________________________________________
2. Contact Information. Provide the address, telephone number, fax number and email address of the selling shareholder.
Address: | _________________________ | |
_________________________ | ||
Phone: | _________________________ | |
Fax: | _________________________ | |
Email: | _________________________ |
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3. Relationship with the Company. Describe the nature of any position, office or other material relationship the selling shareholder has had with the Company during the past three years. If not applicable please state so.
__________________________________________________________________
__________________________________________________________________
4. Organizational Structure. Please indicate or (if applicable) describe how the selling shareholder is organized.
Is the selling shareholder a natural person?
(If yes, please mark the box and skip to Question 5.)
|
___ Yes | ___ No |
Is the selling shareholder a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)?
(If yes, please mark the box and skip to Question 5.)
|
___ Yes | ___ No |
Is the selling shareholder a majority-owned subsidiary of a reporting company under the Exchange Act?
(If yes, please mark the box and skip to Question 5.)
|
___ Yes | ___ No |
Is the selling shareholder a registered investment company under the Investment Company Act of 1940?
(If yes, please mark the box and skip to Question 5.) |
___ Yes | ___ No |
If the answer to all of the foregoing questions is “no,” please describe: (i) the exact legal description of the selling shareholder (e.g., corporation, partnership, limited liability company, etc.); (ii) whether the legal entity so described is managed by another entity and the exact legal description of such entity (repeat this step until the last entity described is managed by a person or persons, each of whom is described in any one of (a) through (d) above); (iii) the names of each person or persons having voting and investment control over the Company’s securities that the entity owns (e.g., director(s), general partner(s), managing member(s), etc.).
(a) Legal Description of Entity:
____________________________________________________________
(b) Name of Entit(ies)/(y) Managing Such Entity (if any):
____________________________________________________________
____________________________________________________________
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(c) Name of Entit(ies)/(y) Managing such Entit(ies)/(y) (if any):
____________________________________________________________
____________________________________________________________
(d) Name(s) of Natural Person(s) Having Voting or Investment Control Over the Shares Held by such Entit(ies)/(y):
____________________________________________________________
5. Ownership of the Company’s Securities. This question covers beneficial ownership of the Company’s securities. Please consult Appendix A to this Questionnaire for information as to the meaning of “beneficial ownership”. Please state below (a) the number of common shares of the Company (including any shares issuable upon exercise of warrants) that the selling shareholder beneficially owned as of the date this Questionnaire is signed (not including the Registrable Securities); (b) the number of Units purchased in the Offering; and (c) the number of Registrable Securities purchased in the Offering that the selling shareholder wishes to have registered for resale in the Resale Registration Statement:
(a) Number of common shares of the Company beneficially owned (not including the Registrable Securities):
Number of noted security | Terms |
A) Common shares currently held | |
B) January 2016 Warrants – C$0.75 expiring Jan 2019 | |
C) February 2017 Warrants – C$0.85 expiring Feb 2020 | |
Total Number of Beneficially Held Common Shares (A + B + C) |
Do you wish to disclaim beneficial ownership of any of the common shares reported in the table above?
___ Yes | ___ No |
If so, please indicate the number of shares in question, the name of the actual beneficial owner(s) and the relationship of such person(s) to you: ___________________________________________________________
(b) Number of Units purchased in the Offering:
__________________________________________________________
(c) Number of Registrable Securities to be registered for resale in the Resale Registration Statement:
__________________________________________________________
6. Broker-Dealer Status.
(a) Is the selling shareholder a broker-dealer? | ___ Yes | ___ No |
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(b) If the answer to Section 6(a) is “yes,” did the selling shareholder receive the Registrable Securities as compensation for investment banking services to the Company?
Note: If the answer to 6(b) is “no,” guidance from the Securities and Exchange Commission (“SEC”) has indicated that the selling shareholder should be identified as an underwriter in the Resale Registration Statement.
|
___ Yes | ___ No | |
(c) Is the selling shareholder an affiliate of a broker-dealer? | ___ Yes | ___ No |
(d) If the selling shareholder is an affiliate of a broker-dealer, does the selling shareholder certify that it purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, the selling shareholder had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
Note: If the answer to 6(d) is “no,” SEC guidance has indicated that the selling shareholder should be identified as an underwriter in the Resale Registration Statement.
|
___ Yes | ___ No |
7. Plan of Distribution. Do you have any agreement, “arrangement” or understanding with any securities underwriter, broker or dealer relating to the sale or proposed sale of any of the common shares of the Company held by you, or as to which you have the right to acquire, as listed above in response to Question 5(b)?
___ Yes | ___ No |
If the answer is “yes”, please describe:
__________________________________________________________________
__________________________________________________________________
8. Legal Proceedings with the Company. Is the Company a party to any pending legal proceeding in which the selling shareholder is named as an adverse party?
___ Yes | ___ No |
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State any exceptions here:
__________________________________________________________________
__________________________________________________________________
9. Reliance on Responses. The undersigned acknowledges and agrees that the Company and its legal counsel shall be entitled to rely on its responses in this Questionnaire in all matters pertaining to the Resale Registration Statement and the sale of any Registrable Securities pursuant to the Resale Registration Statement.
If the Company is required to file a new or additional resale registration statement to register Registrable Securities beneficially owned by the selling shareholder, the undersigned hereby agrees to complete and return to the Company, upon the request of the Company, a new Questionnaire (in a form substantially similar to this Questionnaire).
If the selling shareholder transfers all or any portion of its Registrable Securities after the date on which the information in this Questionnaire is provided to the Company, the undersigned hereby agrees to notify the transferee(s) at the time of transfer of its rights and obligations hereunder.
By signing below, the undersigned represents that the information provided herein is accurate and complete. The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Resale Registration Statement remains effective.
By signing below, the undersigned consents to the disclosure of the information contained herein and the inclusion of such information in the Resale Registration Statement and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Resale Registration Statement.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Dated: ___________________ |
Beneficial Owner: ____________________________________ By:_________________________________ Name: Title: |
AS SOON AS POSSIBLE, PLEASE EMAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO THE ADDRESS IDENTIFIED IN THE SUBSCRIPTION AGREEMENT.
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APPENDIX A TO SCHEDULE E
Definition of “Beneficial Ownership”
1. A “Beneficial Owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares:
(a) Voting power which includes the power to vote, or to direct the voting of, such security; and/or
(b) Investment power which includes the power to dispose, or direct the disposition of, such security.
Please note that either voting power or investment power, or both, is sufficient for you to be considered the beneficial owner of shares.
2. Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of the federal securities acts shall be deemed to be the beneficial owner of such security.
3. Notwithstanding the provisions of paragraph (1), a person is deemed to be the “beneficial owner” of a security if that person has the right to acquire beneficial ownership of such security within 60 days, including but not limited to any right to acquire: (a) through the exercise of any option, warrant or right; (b) through the conversion of a security; (c) pursuant to the power to revoke a trust, discretionary account or similar arrangement; or (d) pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, however, any person who acquires a security or power specified in (a), (b) or (c) above, with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the securities which may be acquired through the exercise or conversion of such security or power.
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Exhibit 4.3
THE BROKER WARRANTS REPRESENTED HEREBY ARE EXERCISABLE AT ANY TIME AND TIME TO TIME ON OR BEFORE 5:00 P.M. (VANCOUVER TIME) ON JULY 26, 2021 AFTER WHICH TIME THEY SHALL EXPIRE AND BE OF NO FURTHER FORCE OR EFFECT.
NON-TRANSFERABLE BROKER WARRANTS TO PURCHASE COMMON SHARES
OF
NIOCORP DEVELOPMENTS LTD.
(incorporated under the laws of British Columbia)
Certificate No.: BW-001
Number of Warrants: 192,562 |
Date: July 26, 2017 |
THIS CERTIFIES THAT, for value received, Mackie Research Capital Corporation (the “Holder”), being the registered holder of 192,562 non-transferrable broker warrants (the “Broker Warrants”), is entitled, at any time prior to 5:00 p.m. (Vancouver time) on the Expiry Day (as defined below) to subscribe for and purchase the number of common shares (the “Common Shares”) of NioCorp Developments Ltd. (the “Company”) set forth above on the basis of one Common Share at a price of $0.79 (the “Exercise Price”) for each Broker Warrant exercised, subject to adjustment as set out herein, by surrendering to the Company at its principal office, 7000 South Yosemite Street, Suite 115, Centennial, CO 80112, this Broker Warrant certificate (the “Broker Warrant Certificate”), with a completed and executed Subscription Form (as defined herein), and payment in full for the Common Shares being purchased.
The Company shall treat the Holder as the absolute owner of this Broker Warrant for all purposes and the Company shall not be affected by any notice or knowledge to the contrary. The Holder shall be entitled to the rights evidenced by this Broker Warrant free from all equities and rights of set-off or counterclaim between the Company and the Holder and all persons may act accordingly and the receipt by the Holder of the Common Shares issuable upon exercise hereof shall be a good discharge to the Company and the Company shall not be bound to inquire into the title of any such Holder.
1. | Definitions: In this Broker Warrant Certificate, unless there is something in the subject matter or context inconsistent therewith, the following expressions shall have the following meanings namely: |
(a) | “Adjustment Period” means the period commencing on the date hereof and ending at the Expiry Time; |
(b) | “Broker Warrant Certificate” means this Broker Warrant certificate; |
(c) | “Broker Warrant” means a non-transferable broker warrant exercisable to purchase one Common Share at the Exercise Price until the Expiry Time; |
(d) | “Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which banking institutions are closed in Toronto, Ontario or Vancouver, British Columbia; |
(e) | “Common Share” means the common shares in the capital of the Company. |
(f) | “Company” means NioCorp Developments Ltd., a company incorporated under the laws of British Columbia and its successors and assigns; |
(g) | “Current Market Price” of a Common Share at any date means the price per share equal to the volume weighted average price at which the Common Shares have traded on the TSX or, if the Common Shares are not listed on the TSX, on any other stock exchange on which such shares are then listed as may be selected by the directors of the Company, for the five Trading Days ending three Trading Days prior to the relevant date or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market with the volume weighted average price per Common Share being determined by dividing the aggregate sale price of all Common Shares sold on the said exchange or market, as the case may be, during the said five Trading Days by the aggregate number of Common Shares so sold or, if the Common Shares are not listed or quoted on any stock exchange or over-the-counter market, such price as may be determined by such firm of independent charted accountants as may be selected by the directors of the Company; |
(h) | “Dividends Paid in the Ordinary Course” means dividends paid in any financial year of the Company, whether in (i) cash; (ii) shares of the Company; (iii) warrants or similar rights to purchase any shares of the Company or property or other assets of the Company provided that the value of such dividends does not in such financial year exceed the greater of: |
(i) | 150% of the aggregate amount of dividends paid by the Company on the Common Shares in the 12-month period ending immediately prior to the first day of such financial year; and |
(ii) | 100% of the consolidated net earnings from continuing operations of the Company, before any extraordinary items, for the 12-month period ending immediately prior to the first day of such financial year (such consolidated net earnings from continuing operations to be computed in accordance with generally accepted accounting principles in Canada); |
(i) | “Exercise Price” means $0.79 per Common Share, subject to adjustment in accordance with Section 10 hereof; |
(j) | “Expiry Day” means July 26, 2021; |
(k) | “Expiry Time” means 5:00 p.m. (Vancouver time), on the Expiry Day; |
(l) | “Holder” shall have the meaning ascribed thereto on the face page hereof; |
(m) | “person” means an individual, corporation, partnership, unincorporated association, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative; |
(n) | “Rights Offering” has the meaning set out in Section 10(b)(ii) in this Broker Warrant Certificate; |
(o) | “Subscription Form” means the subscription form annexed to this Broker Warrant Certificate; |
(p) | “TSX” means the Toronto Stock Exchange; |
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(q) | “Trading Day” with respect to a stock exchange, market or over-the-counter market means a day on which such stock exchange or over-the-counter market is open for business; |
(r) | “United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; |
(s) | “U.S. Person” means U.S. person as that term is defined in Regulation S under the U.S. Securities Act; |
(t) | “U.S. Securities Act” means the United States Securities Act of 1933, as amended; and |
(u) | “$” means Canadian Dollars. |
2. | Expiry Time: At the Expiry Time, all rights under the Broker Warrants evidenced hereby, in respect of which the right of subscription and purchase herein provided for shall not theretofore have been exercised, shall expire and be void and of no further force and effect. |
3. | Exercise Procedure: |
(a) | The Holder may exercise the right to subscribe and purchase the number of Common Shares herein provided, by delivering to the Company prior to the Expiry Time at its principal office this Broker Warrant Certificate, with the Subscription Form duly completed and executed by the Holder or its legal representative or attorney, duly appointed by an instrument in writing in form and manner satisfactory to the Company, together with a certified cheque or bank draft payable to or to the order of the Company in an amount equal to the aggregate Exercise Price in respect of the Broker Warrants so exercised. Any Broker Warrant Certificate so surrendered shall be deemed to be surrendered only upon delivery thereof to the Company at its principal office set forth herein in the manner provided in Section 24 hereof (or to such other address as the Company may notify the Holder). |
(b) | Upon such delivery and payment as aforesaid, the Company shall cause to be issued to the Holder hereof the Common Shares subscribed for not exceeding those which such Holder is entitled to purchase pursuant to this Broker Warrant Certificate and the Holder hereof shall become a shareholder of the Company in respect of the Common Shares subscribed for with effect from the date of such delivery and payment and shall be entitled to delivery of a certificate evidencing the Common Shares and the Company shall cause such certificates to be mailed to the Holder hereof at the address or addresses specified in such subscription as soon as practicable, and in any event within five (5) Business Days of such delivery and payment. |
(c) | In the event that any Broker Warrants are exercised before November 27, 2017, the certificate(s) representing the Common Shares issued upon such exercise shall bear the following legend: |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE NOVERMBER 27, 2017.”
provided that, if at any time, in the opinion of counsel to the Company, such legend is no longer necessary or advisable under any such securities laws, or the holder of any such legended certificate, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of counsel satisfactory to the Company) to the effect that such legends are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.
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(d) | The Broker Warrants shall not be exercised by, or for the account or benefit of, any person in the United States or any “U.S. person” (a “U.S. Person”) as defined in Rule 902(k) of Regulation S under the U.S. Securities Act during any time that no Registration Statement (as defined below) registering the Warrants and the Common Shares issuable upon the exercise of the Broker Warrant evidenced hereby is effective, unless an exemption from the registration requirements of the U.S. Securities Act is available and such holder provides evidence of the availability of such exemption satisfactory to the Company, and the certificate representing the Common Shares issued upon such exercise, if then required pursuant to Rule 144 of the U.S. Securities Act, shall bear the following legend: |
“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”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
provided that, if at any time, in the opinion of counsel to the Company, such legend is no longer necessary or advisable under any such securities laws, or the holder of any such legended certificate, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of counsel satisfactory to the Company) to the effect that such legends are not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legend.
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(e) | Prior to effectiveness of a registration statement (the “Registration Statement”) under the U.S. Securities Act, including any amendments or supplements thereto, registering the Warrants and the Common Shares issuable upon the exercise of the Warrants and at any time the Registration Statement ceases to be effective, prior to the Expiry Time and for so long as the Registration Statement is not effective, the Holder may exercise this Broker Warrant as set forth in Section 3(a). Within three business days of notice from the Holder of the election to exercise while no Registration Statement is effective, the Corporation shall elect, at its sole discretion, to either (a) redeem the Broker Warrants, or (b) permit the cashless exercise of the Broker Warrants. If the Holder exercises the right provided for in this Section 3(e) in respect of a lesser number of Broker Warrants than the aggregate number of Broker Warrants represented by the Broker Warrant Certificate surrendered, the Holder shall be entitled to receive a further Broker Warrant Certificate in respect of the Broker Warrants represented by the Broker Warrant Certificate that have not been part of a cashless exercise or redeemed. |
(f) | In the event Holder exercises this Broker Warrant in accordance with Section 3(e), the Corporation shall, within three business days, either (i) redeem the Broker Warrants, or (ii) permit the cashless exercise of the Broker Warrants, each as provided in this Section 3(f) and the Corporation shall cause either (a) in the case of a redemption, a cheque in the amount of money determined by multiplying the number of Common Shares that would have been issued if the Broker Warrants to be redeemed were exercised on the Determination Date (as defined below) by the excess (if any) of the Current Market Price per Common Share on the date (the “Determination Date”) of execution by the Holder of the Subscription Form, over the exercise price of the Broker Warrant, or (b) in the case of a cashless exercise, a certificate representing the number of Common Shares equal to the quotient obtained by dividing: (A) (i) the Current Market Price per Common Share on the Determination Date minus the Exercise Price; (ii) multiplied by the number of Common Shares which would, but for such cashless exercise, have been issued, by (B) the Current Market Price of the Common Shares on the Determination Date, to be mailed to such Holder at the address specified in Subscription Form, or, if so specified in such Subscription Form, to be made available for pick-up by such Holder at the Company or its transfer agent. |
4. | Partial Exercise: The Holder may subscribe for and purchase a number of Common Shares less than the maximum number the Holder is entitled to purchase pursuant to the full exercise of this Broker Warrant Certificate. In the event of any such subscription prior to the Expiry Time, the Holder shall be entitled to receive, without charge, a new Broker Warrant Certificate in respect of the balance of the Common Shares which the Holder was entitled to subscribe for pursuant to this Broker Warrant Certificate and which were then not purchased. |
5. | No Fractional Shares: Notwithstanding any adjustments provided for in Section 10 hereof or otherwise, the Company shall not be required upon the exercise of any Broker Warrants to issue fractional Common Shares in satisfaction of its obligations hereunder and, in any such case, the number of Common Shares issuable upon the exercise of any Broker Warrants shall be rounded down to the nearest whole number. The Company shall not be required to make any payment to the Holder who, absent this Section 5 hereof, would otherwise have been entitled to receive a fractional Common Share. |
6. | Limitation on Transfer: The Broker Warrants are non-transferable and non-assignable. |
7. | Not a Shareholder: Nothing in this Broker Warrant Certificate or in the holding of a Broker Warrant evidenced hereby shall be construed as conferring upon the Holder any right or interest whatsoever as a shareholder of the Company or any other right or interest except as herein expressly provided. |
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8. | No Obligation to Purchase: Nothing herein contained or done pursuant hereto shall obligate the Holder to subscribe for or the Company to issue any shares except those shares in respect of which the Holder shall have exercised its right to purchase hereunder in the manner provided herein. |
9. | Covenants: |
(a) | The Company covenants and agrees that so long as any Broker Warrants evidenced hereby remain outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the right of purchase herein provided for, it will cause the Common Shares subscribed for and purchased in the manner herein provided to be issued and delivered as directed and such Common Shares shall be issued as fully paid and non-assessable Common Shares and free from all taxes, liens and charges with respect to the issue thereof and the holders thereof shall not be liable to the Company or to its creditors in respect thereof. |
(b) | The Company covenants and agrees that until the Expiry Time, while the Broker Warrants (or remaining portion thereof) shall be outstanding, the Company shall use its best efforts to preserve and maintain its corporate existence, to carry on and conduct its business in a prudent manner in accordance with industry standards and good business practice, to remain listed on the TSX, maintain its status as a “reporting issuer” not in default of the requirements of the applicable securities laws in the Canadian jurisdictions in which the Company is currently a reporting issuer, provided that this covenant shall not prevent the Company from completing any transaction which would result in the Company to cease its corporate existence, cease to be listed on the TSX or cease to be a reporting issuer, respectively, so long as the holders of the Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX. |
(c) | The Company shall use its best efforts to ensure the Common Shares are listed and posted for trading on the TSX or such other stock exchange or over-the-counter market as the Common Shares may be listed or quoted (as the case may be) at the time of exercise of the Broker Warrants. In addition, the Company shall make all requisite filings under applicable securities legislation necessary to remain a reporting issuer not in default. |
(d) | If the issuance of the Common Shares upon the exercise of the Broker Warrants requires any filing or registration with or approval of any securities regulatory authority or other governmental authority or compliance with any other requirement under any law before such Common Shares may be validly issued (other than the filing of a prospectus or similar disclosure document), the Company and the Holder agree to take such actions as may be necessary to secure such filing, registration, approval or compliance, as the case may be. |
(e) | The Company will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as may be reasonably required for the better accomplishing and effecting of the intentions and provisions of this Broker Warrant Certificate. |
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10. | Adjustments: |
(a) | Adjustment: The rights of the holder of this Broker Warrant Certificate, including the number of Common Shares issuable upon the exercise of such Broker Warrants evidenced hereunder, will be adjusted from time to time in the events and in the manner provided in, and in accordance with the provisions of, this Section. The purpose and intent of the adjustments provided for in this Section is to ensure that the rights and obligations of the Holder are neither diminished nor enhanced as a result of any of the events set forth in paragraphs (b), (c) or (d) of this Section 10. Accordingly, the provisions of this Section 10 shall be interpreted and applied in accordance with such purpose and intent. |
(b) | The Exercise Price in effect at any date will be subject to adjustment from time to time as follows: |
(i) | Share Reorganization: If and whenever at any time during the Adjustment Period, the Company shall (A) subdivide, redivide or change the outstanding Common Shares into a greater number of Common Shares, (B) consolidate, combine or reduce the outstanding Common Shares into a lesser number of Common Shares, or (C) fix a record date for the issue of Common Shares or securities convertible into or exchangeable for Common Shares to all or substantially all of the holders of Common Shares by way of a stock dividend or other distribution other than a Dividend Paid in the Ordinary Course, then, in each such event, the Exercise Price shall, on the record date for such event or, if no record date is fixed, the effective date of such event, be adjusted so that it will equal the rate determined by multiplying the Exercise Price in effect immediately prior to such date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such date before giving effect to such event, and of which the denominator shall be the total number of Common Shares outstanding on such date after giving effect to such event (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would have been outstanding had such securities been fully exchanged for or converted into Common Shares on such record date or effective date). Such adjustment shall be made successively whenever any such event shall occur. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date for such stock dividend for the purpose of calculating the number of outstanding Common Shares under paragraphs 10(b)(i) and (ii) hereof. |
(ii) | Rights Offering: If and whenever at any time during the Adjustment Period, the Company shall fix a record date for the issue of rights, options or warrants to all or substantially all of the holders of Common Shares entitling the holders thereof, within a period expiring not more than 45 days after the record date for such issue, to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for Common Shares) at a price per share (or having a conversion or exchange price per share) less than 95% of the Current Market Price on such record date (each such event, a “Rights Offering”), then the Exercise Price shall be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date plus the number of Common Shares equal to the number arrived at by dividing the aggregate price of the total number of additional Common Shares so offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by such Current Market Price, and of which the denominator shall be the total number of Common Shares outstanding on such record date plus the total number of additional Common Shares so offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable). Any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, provided that if two or more such record dates referred to in this subsection 10(b)(ii) are fixed within a period of 25 Trading Days, such adjustment will be made successively as if each of such record dates occurred on the earliest of such record dates. To the extent that any such rights, options or warrants are not exercised prior to the expiration thereof, the Exercise Price shall then be readjusted to the Exercise Price which would then be in effect based upon the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be. |
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(iii) | Distribution: If and whenever at any time during the Adjustment Period, the Company shall fix a record date for the making of a distribution to all or substantially all of the holders of Common Shares of (A) shares of any class other than Common Shares whether of the Company or any other corporation, (B) rights, options or warrants to acquire Common Shares or securities exchangeable for or convertible into Common Shares or property or other assets of the Company (other than a Rights Offering as described in Section 10(b)(ii)), (C) evidences of indebtedness, or (D) cash, securities or other property or assets then, in each such case, provided that such distribution does not constitute a Dividend Paid in the Ordinary Course or fall under clauses (i) or (ii) of this Section 10 above, the Exercise Price will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date multiplied by the Current Market Price on the earlier of such record date and the date on which the Company announces its intention to make such distribution, less the aggregate fair market value (as determined by the directors, acting reasonably, at the time such distribution is authorized, and subject to TSX acceptance) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets so distributed, and of which the denominator shall be the total number of Common Shares outstanding on such record date multiplied by such Current Market Price. Any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, provided that if two or more such record dates or record dates referred to in this subsection 10(b)(iii) are fixed within a period of 25 Trading Days, such adjustment will be made successively as if each of such record dates occurred on the earliest of such record dates. To the extent that any such rights, options or warrants so distributed are not exercised prior to the expiration thereof, the Exercise Price shall then be readjusted to the Exercise Price which would then be in effect based upon such rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets actually distributed or based upon the number or amount of securities or the property or assets actually issued or distributed upon the exercise of such rights, options or warrants, as the case may be. |
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(c) | Reclassifications: If and whenever at any time during the Adjustment Period, there is (A) any reclassification of or amendment to the outstanding Common Shares, any change of the Common Shares into other shares or any other reorganization of the Company (other than as described in subsection 10(b) hereof), (B) any consolidation, amalgamation, arrangement, merger or other form of business combination of the Company with or into any other corporation resulting in any reclassification of the outstanding Common Shares, any change of the Common Shares into other shares or any other reorganization of the Company, or (C) any sale, lease, exchange or transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or entity, then, in each such event, the Holder of the Broker Warrants evidenced hereby which are thereafter exercised shall be entitled to receive, and shall accept, in lieu of the number of Common Shares to which such Holder was theretofore entitled upon such exercise, the kind and number or amount of shares or other securities or property which such Holder would have been entitled to receive as a result of such event if, on the effective date thereof, such Holder had been the registered holder of the number of Common Shares to which such Holder was theretofore entitled upon such exercise. If necessary as a result of any such event, appropriate adjustments will be made in the application of the provisions set forth in this subsection with respect to the rights and interests thereafter of the Holder of this Broker Warrant Certificate to the end that the provisions set forth in this subsection will thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Broker Warrants. Any such adjustments will be made by and set forth in an instrument supplemental hereto approved by the directors, acting reasonably, and shall for all purposes be conclusively deemed to be an appropriate adjustment. No reclassification in accordance with this subsection 10(c) shall be completed unless all necessary steps shall have been taken so that the Holders of the Broker Warrants shall thereafter be entitled to receive the number of Common Shares or other securities or property of the Company or of the continuing, successor or purchasing person, as the case may be, under the reclassification, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 10. |
(d) | If at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price shall occur pursuant to the provisions of subsection 10(b) or 10(c) of this Broker Warrant Certificate, then the number of Common Shares purchasable upon the subsequent exercise of the Broker Warrants shall be simultaneously adjusted or readjusted, as the case may be, by multiplying the number of Common Shares purchasable upon the exercise of the Broker Warrants immediately prior to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction used in the adjustment or readjustment of the Exercise Price. |
11. | Rules Regarding Calculation of Adjustment of Exercise Price: |
(a) | The adjustments provided for in Section 10 are cumulative and will, in the case of adjustments to the Exercise Price, be computed to the nearest whole Common Share and will be made successively whenever an event referred to therein occurs, subject to the following subsections of this Section 11. |
(b) | No adjustment in the Exercise Price is required to be made unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment in the Exercise Price is required unless such adjustment would result in a change of at least one one-hundredth of a Common Share; provided, however, that any adjustments which, except for the provisions of this subsection, would otherwise have been required to be made, will be carried forward and taken into account in any subsequent adjustments. |
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(c) | No adjustment in the Exercise Price will be made in respect of any event described in Section 10, other than the events referred to in subsection 10(c), if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if the Holder had exercised this Broker Warrant prior to or on the effective date or record date of such event. Any participation by the Holder in a distribution, dividend, or other event referred to in Section 10 is subject to the approval of the TSX. |
(d) | No adjustment in the Exercise Price will be made under Section 10 in respect of the issue from time to time of Common Shares issuable from time to time as Dividends Paid in the Ordinary Course to holders of Common Shares who exercise an option or election to receive substantially equivalent dividends in Common Shares in lieu of receiving a cash dividend. |
(e) | If at any time a question or dispute arises with respect to adjustments provided for in Section 10, such question or dispute will be conclusively determined by such firm of independent chartered accountants as may be selected by action of the directors of the Company and any such determination, subject to regulatory approval and absent manifest error, will be binding upon the Company and the Holder. The Company will provide such chartered accountant with access to all necessary records of the Company. |
(f) | In case the Company after the date of issuance of this Broker Warrant Certificate takes any action affecting the Common Shares, other than any action described in Section 10, which in the reasonable opinion of the board of directors of the Company would materially affect the rights of the Holder, the Exercise Price will be adjusted in such manner, if any, and at such time, by action of the directors of the Company in their sole discretion, acting reasonably and in good faith, as such directors deem equitable, but subject in all cases to any necessary regulatory approval. Failure of the taking of action by the directors of the Company so as to provide for an adjustment on or prior to the effective date of any action by the Company affecting the Common Shares will be conclusive evidence that the board of directors of the Company has determined that it is equitable to make no adjustment in the circumstances. |
(g) | If the Company sets a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any dividend or distribution or sets a record date to take any other action and, thereafter and before the distribution to such shareholders of any such dividend or distribution or the taking of any other action, decides not to implement its plan to pay or deliver such dividend or distribution or take such other action, then no adjustment in the Exercise Price will be required by reason of the setting of such record date. |
(h) | In the absence of a resolution of the directors of the Company fixing a record date for any event which would require any adjustment to the Broker Warrants, the Company will be deemed to have fixed as the record date therefor the date on which the event is effected. |
(i) | As a condition precedent to the taking of any action which would require any adjustment to the Common Shares issuable under the Broker Warrants, including the Exercise Price, the Company shall take any corporate action which may be necessary in order that the Company or any successor to the Company or successor to the undertaking or assets of the Company have unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the shares or other securities which the Holder is entitled to receive on the full exercise thereof in accordance with the provisions hereof. |
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(j) | The Company will from time to time, immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 10, forthwith give notice to the Holder specifying the event requiring such adjustment or readjustment and the results thereof, including the resulting Exercise Price. |
(k) | The Company covenants to and in favour of the Holder that so long as any Broker Warrants evidenced hereby remain outstanding, it will give notice to the Holder of the effective date or of its intention to fix a record date for any event referred to in Section 10 whether or not such action would give rise to an adjustment in the Exercise Price or the number and type of securities issuable upon the exercise of the Broker Warrants, and, in each case, such notice shall specify the particulars of such event and the record date and the effective date for such event; provided that the Company shall only be required to specify in such notice such particulars of such event as have been fixed and determined on the date on which such notice is given. Such notice shall be given not less than 14 days in each case prior to such applicable record date or effective date. |
(l) | In any case that an adjustment pursuant to Section 10 shall become effective immediately after a record date for or an effective date of an event referred to herein, the Company may defer, until the occurrence and consummation of such event, issuing to the Holder of this Broker Warrant Certificate, if exercised after such record date or effective date and before the occurrence and consummation of such event, the additional Common Shares or other securities or property issuable upon such exercise by reason of the adjustment required by such event, provided, however, that the Company will deliver to the Holder an appropriate instrument evidencing the Holder’s right to receive such additional Common Shares or other securities or property upon the occurrence and consummation of such event and the right to receive any dividend or other distribution in respect of such additional Common Shares or other securities or property declared in favour of the holders of record of Common Shares or of such other securities or property on or after the Exercise Date or such later date as the Holder would, but for the provisions of this subsection, have become the holder of record of such additional Common Shares or of such other securities or property. |
(m) | On the happening of each and every such event set out in Section 10, the applicable provisions of this Broker Warrant Certificate, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Company shall take all necessary action so as to comply with such provisions as so amended. |
12. | Consolidation and Amalgamation |
(a) | In the event that the Company enters into any transaction whereby all or substantially all of its undertaking, property and assets would become the property of any other corporation (herein called a “successor corporation”) whether by way of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale, disposition or otherwise, the Company will ensure that contemporaneously with the consummation of such transaction the Company and the successor corporation shall have executed such instruments and done such things as the Company, acting reasonably, considers necessary or advisable to establish that upon the consummation of such transaction: |
i. | the successor corporation will have assumed all the covenants and obligations of the Company under this Broker Warrant Certificate, and |
ii. | the Broker Warrants and the terms set forth in this Broker Warrant Certificate will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation, to all the rights of the Holder under this Broker Warrant Certificate. |
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(b) | Whenever the conditions of subsection 12(a) shall have been duly observed and performed the successor corporation shall possess, and from time to time may exercise, each and every right and power of the Company under the Broker Warrants in the name of the Company or otherwise and any act or proceeding by any provision hereof required to be done or performed by any director or officer of the Company may be done and performed with like force and effect by the like directors or officers of the successor corporation. |
13. | Representation and Warranty: The Company hereby represents and warrants with and to the Holder that the Company is duly authorized and has all corporate and lawful power and authority to create and issue the Broker Warrants evidenced hereby and the Common Shares issuable upon the exercise hereof and perform its obligations hereunder and that this Broker Warrant Certificate represents a valid, legal and binding obligation of the Company enforceable in accordance with its terms. |
14. | If Share Transfer Books Closed: The Company shall not be required to deliver certificates for Common Shares while the share transfer books of the Company are properly closed, prior to any meeting of shareholders or for the payment of dividends or for any other purpose and in the event of the surrender of any Broker Warrant in accordance with the provisions hereof and the making of any subscription and payment for the Common Shares called for thereby during any such period delivery of certificates for Common Shares may be postponed for a period not exceeding three (3) Business Days after the date of the re-opening of said share transfer books provided that any such postponement of delivery of certificates shall be without prejudice to the right of the Holder, if the Holder has surrendered the same and made payment during such period, to receive such certificates for the Common Shares called for after the share transfer books shall have been re-opened. |
15. | Protection of Shareholders, Officers and Directors: Subject as herein provided, all or any of the rights conferred upon the Holder may be enforced by the Holder by appropriate legal proceedings. No recourse under or upon any obligation, covenant or agreement herein contained or in any of the Broker Warrants represented hereby shall be taken against any shareholder, officer or director of the Company, either directly or through the Company, it being expressly agreed and declared that the obligations under the Broker Warrants evidenced hereby, are solely corporate obligations of the Company and that no personal liability whatever shall attach to or be incurred by the shareholders, officers, or directors of the Company or any of them in respect thereof, any and all rights and claims against every such shareholder, officer or director being hereby expressly waived as a condition of and as a consideration for the issue of the Broker Warrants evidenced hereby. |
16. | Replacement Certificate: Upon receipt of evidence satisfactory to the Company of loss, theft, destruction or mutilation of this Broker Warrant Certificate and, if requested by the Company, upon delivery of a bond of indemnity satisfactory to the Company (or, in the case of mutilation, upon surrender of this Broker Warrant Certificate), the Company will issue to the Holder a replacement certificate containing the same terms and conditions as this Broker Warrant Certificate. |
17. | Governing Law: This Broker Warrant Certificate shall be governed by, and construed in accordance with, the laws of the Province of British Columbia and the laws of Canada applicable therein but the references to such laws shall not, by conflict of laws, rules or otherwise, require the application of the law of any jurisdiction other than the Province of British Columbia. |
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18. | Severability: If any one or more of the provisions or parts thereof contained in this Broker Warrant Certificate should be or become invalid, illegal or unenforceable in any respect in any jurisdiction, the remaining provisions or parts thereof contained herein shall be and shall be conclusively deemed to be, as to such jurisdiction, severable therefrom. |
19. | Amendments: Subject to the approval of the TSX, the provisions of these Broker Warrants may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to in writing by the Company and the Holder. |
20. | Headings: The headings of the articles, sections, subsections and clauses of this Broker Warrant Certificate have been inserted for convenience and reference only and do not define, limit, alter or enlarge the meaning of any provision of this Broker Warrant Certificate. |
21. | Numbering of Articles, etc.: Unless otherwise stated, a reference herein to a numbered or lettered article, section, subsection, clause, subclause or schedule refers to the article, section, subsection, clause, subclause or schedule bearing that number or letter in this Broker Warrant Certificate. |
22. | Gender: Whenever used in this Broker Warrant Certificate, words importing the singular number only shall include the plural, and vice versa, and words importing the masculine gender shall include the feminine gender. |
23. | Day not a Business Day: In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day. |
24. | Binding Effect: This Broker Warrant Certificate and all of its provisions shall enure to the benefit of the Holder, its successors, assigns and legal personal representatives and shall be binding upon the Company and its successors. |
25. | Notice: Notice must be given by facsimile (in the case of notice to the Company), prepaid same day courier, or hand delivery, and addressed as follows: |
(a) | If to the Holder at the latest address of the Holder as recorded on the books of the Company; and |
(b) | If to the Company at: |
7000 South Yosemite Street
Suite 115
Centennial, CO 80112
Attention: Mark Alan Smith, Executive,
Chairman, CEO and President
Email: msmith@niocorp.com
Unless herein otherwise expressly provided, a notice to be given hereunder will be deemed to be validly given on the: (i) same day if notice is sent during regular business hours in the recipient’s jurisdiction, or (ii) the next Business Day if notice is sent outside of regular business hours in the recipient’s jurisdiction or on a day that is not a Business Day.
26. | Time of Essence: Time shall be of the essence hereof. |
[Signature page follows.]
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IN WITNESS WHEREOF the Company has caused this Broker Warrant Certificate to be signed by its duly authorized officer as of this 26 day of July, 2017.
NIOCORP DEVELOPMENTS LTD. | ||
Per: | /s/ John F. Ashburn, Jr. | |
Authorized Signing Officer |
Broker Warrant Certificate
SUBSCRIPTION FORM
Capitalized terms used herein have the meanings ascribed thereto in the Broker Warrant Certificate (the “Broker Warrant Certificate”) to which this Subscription Form is attached.
The undersigned holder of the attached Broker Warrant Certificate hereby subscribes for _______________ common shares (the “Common Shares”) of NioCorp Developments Ltd. (the “Company”) pursuant to the terms of the Broker Warrant Certificate at the Exercise Price on the terms specified in the Broker Warrant Certificate and contemporaneously with the execution and delivery hereof makes payment therefor on the terms specified in the Broker Warrant Certificate. If any Broker Warrants represented by this Broker Warrant Certificate are not being exercised, a new Broker Warrant Certificate representing the unexercised Broker Warrants will be issued and delivered with the certificate representing the Common Shares.
At any time when there is no effective registration statement under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), registering the Common Shares issuable upon exercise of the Broker Warrants to which this Subscription Form relates, the undersigned must comply with the procedures set forth in the paragraph immediately below.
The undersigned hereby certifies that the undersigned (i) is not (and is not exercising the Broker Warrants for the account or benefit of) a person in the “United States or a “U.S. Person”, (ii) did not execute or deliver this Subscription Form in the United States and (iii) has in all other aspects complied with the terms of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any successor rule or regulation of the United States Securities and Exchange Commission in effect. Alternatively, the undersigned is tendering with this Subscription Form a written opinion of counsel or other evidence, in form and substance satisfactory to the Company, to the effect that the securities to be delivered upon exercise of the Broker Warrants are exempt from registration under the U.S. Securities Act and all applicable state securities laws. The term “U.S. Person” is as defined in Regulation S under the U.S. Securities Act and includes, but is not limited to, any natural person resident in the United States and any partnership or corporation organized or incorporated under the laws of the United States. “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.
The undersigned hereby directs that the Common Shares be issued as follows:
NAME(S) IN FULL |
ADDRESS(ES) |
NUMBER OF COMMON SHARES |
DATED this day of , 20 .
NAME: | ||
Signature of Authorized Representative: | ||
Print Name: |
Exhibit 4.4
NIOCORP DEVELOPMENTS LTD.
as the Corporation
and
COMPUTERSHARE TRUST COMPANY OF CANADA
as the Warrant Agent
WARRANT
INDENTURE
Providing for the Issue of Warrants
Dated as of July 26, 2017
TABLE OF CONTENTS
Page No. | |
Article 1 INTERPRETATION | |
Section 1.1 Definitions | 2 |
Section 1.2 Gender and Number | 6 |
Section 1.3 Headings, Etc | 6 |
Section 1.4 Day not a Business Day | 6 |
Section 1.5 Time of the Essence | 6 |
Section 1.6 Monetary References | 6 |
Section 1.7 Applicable Law | 6 |
Article 2 ISSUE OF WARRANTS | |
Section 2.1 Creation and Issue of Warrants | 7 |
Section 2.2 Terms of Warrants | 7 |
Section 2.3 Warrantholder not a Shareholder | 7 |
Section 2.4 Warrants to Rank Pari Passu | 7 |
Section 2.5 Form of Warrants, Warrant Certificates | 8 |
Section 2.6 Book Entry Warrants | 8 |
Section 2.7 Warrant Certificate | 10 |
Section 2.8 Legends | 12 |
Section 2.9 Register of Warrants | 15 |
Section 2.10 Issue in Substitution for Warrant Certificates Lost, etc | 16 |
Section 2.11 Exchange of Warrant Certificates | 16 |
Section 2.12 Transfer and Ownership of Warrants | 17 |
Section 2.13 Cancellation of Surrendered Warrants | 17 |
Article 3 EXERCISE OF WARRANTS | |
Section 3.1 Right of Exercise | 18 |
Section 3.2 Warrant Exercise | 18 |
Section 3.3 Prohibition on Exercise by U.S. Persons; Legended Certificates | 21 |
Section 3.4 Transfer Fees and Taxes | 23 |
Section 3.5 Warrant Agency | 23 |
Section 3.6 Effect of Exercise of Warrant Certificates | 24 |
Section 3.7 Partial Exercise of Warrants; Fractions | 24 |
Section 3.8 Expiration of Warrants | 25 |
Section 3.9 Accounting and Recording | 25 |
Section 3.10 Securities Restrictions | 25 |
Section 3.11 Cashless Exercise or Redemption of Warrants by Person in the United States and U.S. Persons | 26 |
Article 4 ADJUSTMENT OF NUMBER OF WARRANT SHARES AND EXERCISE PRICE | |
Section 4.1 Adjustment of Number of Common Shares and Exercise Price | 27 |
Section 4.2 Entitlement to Common Shares on Exercise of Warrant | 32 |
Section 4.3 No Adjustment for Certain Transactions | 32 |
TABLE
OF CONTENTS
(continued)
Page No. | |
Section 4.4 Determination by Independent Firm | 32 |
Section 4.5 Proceedings Prior to any Action Requiring Adjustment | 32 |
Section 4.6 Certificate of Adjustment | 32 |
Section 4.7 Notice of Special Matters | 33 |
Section 4.8 No Action after Notice | 33 |
Section 4.9 Other Action | 33 |
Section 4.10 Protection of Warrant Agent | 33 |
Section 4.11 Participation by Warrantholder | 34 |
Article 5 RIGHTS OF THE CORPORATION AND COVENANTS | |
Section 5.1 Optional Purchases by the Corporation | 34 |
Section 5.2 General Covenants | 35 |
Section 5.3 Warrant Agent’s Remuneration and Expenses | 36 |
Section 5.4 Performance of Covenants by Warrant Agent | 36 |
Section 5.5 Enforceability of Warrants | 36 |
Article 6 ENFORCEMENT | |
Section 6.1 Suits by Registered Warrantholders | 37 |
Section 6.2 Suits by the Corporation | 37 |
Section 6.3 Immunity of Shareholders, etc | 37 |
Section 6.4 Waiver of Default | 37 |
Article 7 MEETINGS OF REGISTERED WARRANTHOLDERS | |
Section 7.1 Right to Convene Meetings | 38 |
Section 7.2 Notice | 38 |
Section 7.3 Chairman | 38 |
Section 7.4 Quorum | 39 |
Section 7.5 Power to Adjourn | 39 |
Section 7.6 Show of Hands | 39 |
Section 7.7 Poll and Voting | 39 |
Section 7.8 Regulations | 40 |
Section 7.9 Corporation and Warrant Agent May be Represented | 40 |
Section 7.10 Powers Exercisable by Extraordinary Resolution | 40 |
Section 7.11 Meaning of Extraordinary Resolution | 41 |
Section 7.12 Powers Cumulative | 42 |
Section 7.13 Minutes | 42 |
Section 7.14 Instruments in Writing | 42 |
Section 7.15 Binding Effect of Resolutions | 43 |
Section 7.16 Holdings by Corporation Disregarded | 43 |
Article 8 SUPPLEMENTAL INDENTURES | |
Section 8.1 Provision for Supplemental Indentures for Certain Purposes | 43 |
Section 8.2 Successor Entities | 44 |
TABLE
OF CONTENTS
(continued)
Page No. | |
Article 9 CONCERNING THE WARRANT AGENT | |
Section 9.1 Trust Indenture Legislation | 45 |
Section 9.2 Rights and Duties of Warrant Agent | 45 |
Section 9.3 Evidence, Experts and Advisers | 45 |
Section 9.4 Documents, Monies, etc. Held by Warrant Agent | 46 |
Section 9.5 Actions by Warrant Agent to Protect Interest | 47 |
Section 9.6 Warrant Agent Not Required to Give Security | 47 |
Section 9.7 Protection of Warrant Agent | 47 |
Section 9.8 Replacement of Warrant Agent; Successor by Merger | 49 |
Section 9.9 Acceptance of Agency | 49 |
Section 9.10 Warrant Agent Not to be Appointed Receiver | 50 |
Section 9.11 Warrant Agent Not Required to Give Notice of Default | 50 |
Section 9.12 Anti-Money Laundering | 50 |
Section 9.13 Compliance with Privacy Code | 51 |
Section 9.14 Securities Exchange Commission Certification | 51 |
Article 10 GENERAL | |
Section 10.1 Notice to the Corporation and the Warrant Agent | 52 |
Section 10.2 Notice to Registered Warrantholders | 53 |
Section 10.3 Ownership of Warrants | 53 |
Section 10.4 Counterparts | 53 |
Section 10.5 Satisfaction and Discharge of Indenture | 54 |
Section 10.6 Provisions of Indenture and Warrants for the Sole Benefit of Parties and Registered Warrantholders | 54 |
Section 10.7 Common Shares or Warrants Owned by the Corporation or its Subsidiaries - Certificate to be Provided | 54 |
Section 10.8 Severability | 55 |
Section 10.9 Force Majeure | 55 |
Section 10.10 Assignment, Successors and Assigns | 55 |
Section 10.11 Rights of Rescission and Withdrawal for Holders | 56 |
SCHEDULES
SCHEDULE
“A” FORM of WARRANT
SCHEDULE “B” EXERCISE FORM
SCHEDULE “C” FORM OF U.S. PURCHASER CERTIFICATION UPON EXERCISE OF WARRANTS
SCHEDULE “D” FORM OF REGULATION S CERTIFICATION UPON EXERCISE OF WARRANTS
WARRANT INDENTURE
THIS WARRANT INDENTURE is dated as of July 26, 2017.
BETWEEN:
NIOCORP DEVELOPMENTS LTD., a corporation incorporated under the laws of the Province of British Columbia (the “Corporation”),
- AND -
COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada and authorized to carry on business in all provinces of Canada (the “Warrant Agent”)
WHEREAS the Corporation is proposing to issue up to a maximum of 3,892,405 Warrants pursuant to this Indenture;
AND WHEREAS pursuant to this Indenture, each Warrant shall, subject to adjustment, entitle the holder thereof to acquire one (1) Common Share upon payment of the Exercise Price prior to the Expiry Time upon the terms and conditions herein set forth;
AND WHEREAS all acts and deeds necessary have been done and performed to make the Warrants, when created and issued as provided in this Indenture, legal, valid and binding upon the Corporation with the benefits and subject to the terms of this Indenture;
AND WHEREAS the foregoing recitals are made as representations and statements of fact by the Corporation and not by the Warrant Agent;
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NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Corporation hereby appoints the Warrant Agent as warrant agent to hold the rights, interests and benefits contained herein for and on behalf of those persons who from time to time become the holders of Warrants issued pursuant to this Indenture and the parties hereto agree as follows:
Article
1
INTERPRETATION
Section 1.1 | Definitions. |
In this Indenture, including the recitals and schedules hereto, and in all indentures supplemental hereto:
“Adjustment Period” means the period from the Effective Date up to and including the Expiry Time;
“Applicable Legislation” means any statute of Canada or a province thereof, and the regulations under any such named or other statute, relating to warrant indentures or to the rights, duties and obligations of warrant agents under warrant indentures, to the extent that such provisions are at the time in force and applicable to this Indenture;
“Auditors” means BDO USA, LLP or such other firm of chartered accountants duly appointed as auditors of the Corporation, from time to time;
“Authenticated” means (a) with respect to the issuance of a Warrant Certificate, one which has been duly signed by the Corporation or on which the signatures of the Corporation have been printed, lithographed or otherwise mechanically reproduced and authenticated by manual signature of an authorized officer of the Warrant Agent, and (b) with respect to the issuance of an Uncertificated Warrant, one in respect of which the Warrant Agent has completed all Internal Procedures such that the particulars of such Uncertificated Warrant as required by Section 2.7 are entered in the register of holders of Warrants, “Authenticate”, “Authenticating” and “Authentication” have the appropriate correlative meanings;
“Book Entry Participants” or “Participants” means institutions that participate directly or indirectly in the Depository’s book entry registration system for the Warrants;
“Book Entry Warrants” means Warrants that are to be held only by or on behalf of the Depository;
“Business Day” means any day other than Saturday, Sunday or a statutory or civic holiday, or any other day on which banks are not open for business in the City of Vancouver, Province of British Columbia, and shall be a day on which the TSX is open for trading;
“CDS Global Warrants” means Warrants representing all or a portion of the aggregate number of Warrants issued in the name of the Depository and represented by an Uncertificated Warrant, or if requested by the Depository or the Corporation, by a Warrant Certificate;
“CDSX” means the settlement and clearing system of CDS Clearing and Depository Services Inc. for equity and debt securities in Canada;
“Common Shares” means, subject to Article 4, fully paid and non-assessable common shares in the capital of the Corporation as presently constituted;
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“Common Share Reorganization” has the meaning set forth in Section 4.1;
“Counsel” means a barrister and/or solicitor or a firm of barristers and/or solicitors retained by the Warrant Agent or retained by the Corporation, which may or may not be counsel for the Corporation;
“Current Market Price” of the Common Shares at any date means the weighted average of the trading price per Common Share for such Common Shares for each day there was a closing price for the five (5) consecutive Trading Days ending three (3) Trading Days prior to such date on the TSX or if on such date the Common Shares are not listed on the TSX, on such stock exchange upon which such Common Shares are listed and as selected by the directors of the Corporation, or, if such Common Shares are not listed on any stock exchange then on such over-the-counter market as may be selected for such purpose by the directors of the Corporation;
“Depository” means CDS Clearing and Depository Services Inc. and Depository Trust Clearing Corporation or such other person as is designated in writing by the Corporation to act as depository in respect of the Warrants;
“Dividends” means any dividends paid by the Corporation;
“Effective Date” means the date of this Indenture;
“Exchange Rate” means the number of Common Shares subject to the right of purchase under each Warrant;
“Exercise Date” means, in relation to a Warrant, the Business Day on which such Warrant is validly exercised or deemed to be validly exercised in accordance with Article 3 hereof;
“Exercise Notice” has the meaning set forth in Section 3.2(1);
“Exercise Price” at any time means the price at which a whole Common Share may be purchased by the exercise of a whole Warrant, which is initially $0.79 per Common Share, payable in immediately available Canadian funds, subject to adjustment in accordance with the provisions of Section 4.1;
“Expiry Date” means July 26, 2021;
“Expiry Time” means 4:59 p.m. (Vancouver time) on the Expiry Date;
“Extraordinary Resolution” has the meaning set forth in Section 7.11(1);
“Internal Procedures” means in respect of the making of any one or more entries to, changes in or deletions of any one or more entries in the register at any time (including without limitation, original issuance or registration of transfer of ownership) the minimum number of the Warrant Agent’s internal procedures customary at such time for the entry, change or deletion made to be complete under the operating procedures followed at the time by the Warrant Agent, it being understood that neither preparation and issuance shall constitute part of such procedures for any purpose of this definition;
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“Issue Date” means July 26, 2017;
“Notice of Intent to Exercise Form” has the meaning set forth in Section 3.11(1);
“person” means an individual, body corporate, partnership, trust, warrant agent, executor, administrator, legal representative or any unincorporated organization;
“register” means the one set of records and accounts maintained by the Warrant Agent pursuant to Section 2.9;
“Registered Warrantholders” means the persons who are registered owners of Warrants as such names appear on the register, and for greater certainty, shall include the Depository as well as the holders of Uncertificated Warrants appearing on the register of the Warrant Agent;
“Registration Statement” means a registration statement under the U.S. Securities Act, including any amendments or supplements thereto, registering the Warrants and Common Shares issuable upon the exercise of the Warrants;
“Regulation D” means Regulation D as promulgated by the United States Securities and Exchange Commission under the U.S. Securities Act;
“Regulation S” means Regulation S as promulgated by the United States Securities and Exchange Commission under the U.S. Securities Act;
“Regulation S Certificate” means the Regulation S Certificate in substantially the form attached hereto as Schedule “D”;
“Rights Offering” has the meaning set forth in Section 4.1(b);
“Shareholders” means holders of Common Shares;
“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder;
“this Warrant Indenture”, “this Indenture”, “this Agreement”, “hereto” “herein”, “hereby”, “hereof” and similar expressions mean and refer to this Indenture and any indenture, deed or instrument supplemental hereto; and the expressions “Article”, “Section”, “subsection” and “paragraph” followed by a number, letter or both mean and refer to the specified article, section, subsection or paragraph of this Indenture;
“Trading Day” means, with respect to the TSX, a day on which such exchange is open for the transaction of business and with respect to another exchange or an over-the-counter market means a day on which such exchange or market is open for the transaction of business;
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“TSX” means the Toronto Stock Exchange;
“Uncertificated Warrant” means any Warrant which is not evidenced by a Warrant Certificate;
“United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended;
“U.S. Person” has the meaning set forth in Rule 902(k) of Regulation S;
“U.S. Purchaser Letter” means the U.S. Purchaser letter in substantially the form attached hereto as Schedule “C”;
“U.S. Securities Act” means the United States Securities Act of 1933, as amended;
“U.S. Warrantholder” means any Warrantholder that is a U.S. Person, acquired Warrants in the United States or for the account or benefit of any U.S. Person or Person in the United States;
“Warrant Agency” means the principal office of the Warrant Agent in the City of Vancouver, British Columbia or such other place as may be designated in accordance with Section 3.5;
“Warrant Agent” means Computershare Trust Company of Canada, in its capacity as warrant agent of the Warrants, or its successors from time to time;
“Warrant Certificate” means a certificate, substantially in the form set forth in Schedule “A” hereto, to evidence those Warrants that will be evidenced by a certificate;
“Warrantholders”, or “holders” without reference to Warrants, means the warrantholders as and in respect of Warrants registered in the name of the Depository and includes owners of Warrants who beneficially hold securities entitlements in respect of the Warrants through a Book Entry Participant or means, at a particular time, the persons entered in the register hereinafter mentioned as holders of Warrants outstanding at such time;
“Warrantholders’ Request” means an instrument signed in one or more counterparts by Registered Warrantholders entitled to acquire in the aggregate not less than 50% of the aggregate number of Common Shares which could be acquired pursuant to all Warrants then unexercised and outstanding, requesting the Warrant Agent to take some action or proceeding specified therein; and “written order of the Corporation”, “written request of the Corporation”, “written consent of the Corporation” and “certificate of the Corporation” mean, respectively, a written order, request, consent and certificate signed in the name of the Corporation by any two duly authorized signatories of the Corporation and may consist of one or more instruments so executed; and
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“Warrants” means the Common Share purchase warrants created by and authorized by and issuable under this Indenture, to be issued and countersigned hereunder as a Warrant Certificate and /or Uncertificated Warrant held through the book entry registration system on a no certificate issued basis, entitling the holder or holders thereof to purchase up to 3,892,405 Common Shares (subject to adjustment as herein provided) at the Exercise Price prior to the Expiry Time and, where the context so requires, also means the warrants issued and Authenticated hereunder, whether by way of Warrant Certificate or Uncertificated Warrant.
Section 1.2 | Gender and Number. |
Words importing the singular number or masculine gender shall include the plural number or the feminine or neuter genders, and vice versa.
Section 1.3 | Headings, Etc. |
The division of this Indenture into Articles and Sections, the provision of a Table of Contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture or of the Warrants.
Section 1.4 | Day not a Business Day. |
If any day on or before which any action or notice is required to be taken or given hereunder is not a Business Day, then such action or notice shall be required to be taken or given on or before the requisite time on the next succeeding day that is a Business Day.
Section 1.5 Time of the Essence.
Time shall be of the essence in this Indenture and each Warrant.
Section 1.6 | Monetary References. |
Whenever any amounts of money are referred to herein, such amounts shall be deemed to be in lawful money of Canada unless otherwise expressed.
Section 1.7 | Applicable Law. |
This Indenture, the Warrants, the Warrant Certificates (including all documents relating thereto, which by common accord have been and will be drafted in English) shall be construed in accordance with the laws of the Province of British Columbia, and the federal laws of Canada applicable therein and shall be treated in all respects as British Columbia contracts. Each of the parties hereto, which shall include the Warrantholders, irrevocably attorns to the exclusive jurisdiction of the courts of the Province of British Columbia with respect to all matters arising out of this Indenture and the transactions contemplated herein.
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Article
2
ISSUE OF WARRANTS
Section 2.1 | Creation and Issue of Warrants. |
A maximum of 3,892,405 Warrants (subject to adjustment as herein provided) are hereby created and authorized to be issued in accordance with the terms and conditions hereof. By written order of the Corporation, the Warrant Agent shall deliver Warrants in certificated or uncertificated form pursuant to Section 2.5 hereof to Registered Warrantholders and record the name of the Registered Warrantholders on the Warrant register. Registration of interests in Warrants held by the Depository may be evidenced by a position appearing on the register for Warrants of the Warrant Agent for an amount representing the aggregate number of such Warrants outstanding from time to time.
Section 2.2 | Terms of Warrants. |
(1) | Subject to the applicable conditions for exercise set out in Article 3 having been satisfied and subject to adjustment in accordance with Section 4.1, each whole Warrant shall entitle each Warrantholder thereof, upon exercise at any time after the Issue Date and prior to the Expiry Time, to acquire one (1) Common Share upon payment of the Exercise Price. |
(2) | No fractional Warrants shall be issued or otherwise provided for hereunder and Warrants may only be exercised in a sufficient number to acquire whole numbers of Common Shares. Any fractional Warrants shall be rounded down to the nearest whole number and no consideration shall be paid for any such fractional Warrant. |
(3) | Each whole Warrant shall entitle the holder thereof to such other rights and privileges as are set forth in this Indenture. |
(4) | The number of Common Shares which may be purchased pursuant to the Warrants and the Exercise Price therefor shall be adjusted upon the events and in the manner specified in Section 4.1. |
Section 2.3 | Warrantholder not a Shareholder. |
Except as may be specifically provided herein, nothing in this Indenture or in the holding of a Warrant Certificate, entitlement to a Warrant or otherwise, shall, in itself, confer or be construed as conferring upon a Warrantholder any right or interest whatsoever as a Shareholder, including, but not limited to, the right to vote at, to receive notice of, or to attend, meetings of Shareholders or any other proceedings of the Corporation, or the right to Dividends and other allocations.
Section 2.4 | Warrants to Rank Pari Passu. |
All Warrants shall rank equally and without preference over each other, whatever may be the actual date of issue thereof.
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Section 2.5 | Form of Warrants, Warrant Certificates. |
(1) | The Warrants may be issued in both certificated and uncertificated form. Each Warrant originally issued to a U.S. Warrantholder will be evidenced in certificated form only and bear the applicable legends as set forth in Schedule “A” hereto, until such time as the Registration Statement has been declared effective. All Warrants issued in certificated form shall be evidenced by a Warrant Certificate (including all replacements issued in accordance with this Indenture), substantially in the form and bearing the applicable legends as set out in Schedule “A” hereto, which shall be dated as of the Issue Date, shall bear such distinguishing letters and numbers as the Corporation may, with the approval of the Warrant Agent, prescribe, and shall be issuable in any denomination excluding fractions. All Warrants issued to the Depository may be in either a certificated or uncertificated form, such uncertificated form being evidenced by a book position on the register of Warrantholders to be maintained by the Warrant Agent in accordance with Section 2.6. |
(2) | Each Warrantholder by purchasing such Warrant acknowledges and agrees that the terms and conditions set forth in the form of the Warrant Certificate set out in Schedule “A: hereto shall apply to all Warrants and Warrantholders regardless of whether such Warrants are issued in certificated or uncertificated form or whether such Warrantholders are Registered Warrantholders or owners of Warrant who beneficially hold security entitlements in respect of the Warrants through a Depository. |
Section 2.6 | Book Entry Warrants. |
(1) | Reregistration of beneficial interests in and transfers of Warrants held by the Depository shall be made only through the book entry registration system and no Warrant Certificates shall be issued in respect of such Warrants except where physical certificates evidencing ownership in such securities are required or as set out herein or as may be requested by the Depository, as determined by the Corporation, from time to time. Except as provided in this Section 2.6, owners of beneficial interests in any CDS Global Warrants shall not be entitled to have Warrants registered in their names and shall not receive or be entitled to receive Warrants in definitive form or to have their names appear in the register referred to in Section 2.9 herein. Notwithstanding any terms set out herein, Warrants held in the name of the Depository having any legend set forth in Section 2.8 herein and may only be held in the form of Uncertificated Warrants with the prior consent of the Warrant Agent and in accordance Internal Procedures of the Warrant Agent. |
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(2) | Notwithstanding any other provision in this Indenture, no CDS Global Warrants may be exchanged in whole or in part for Warrants registered, and no transfer of any CDS Global Warrants in whole or in part may be registered, in the name of any person other than the Depository for such CDS Global Warrants or a nominee thereof unless: |
(a) | the Depository notifies the Corporation that it is unwilling or unable to continue to act as depository in connection with the Book Entry Warrants and the Corporation is unable to locate a qualified successor; |
(b) | the Corporation determines that the Depository is no longer willing, able or qualified to properly discharge its responsibilities as holder of the CDS Global Warrants and the Corporation is unable to locate a qualified successor; |
(c) | the Depository ceases to be a clearing agency or otherwise ceases to be eligible to be a depository and the Corporation is unable to locate a qualified successor; |
(d) | the Corporation determines that the Warrants shall no longer be held as Book Entry Warrants through the Depository; |
(e) | such right is required by Applicable Legislation, as determined by the Corporation and the Corporation’s Counsel; |
(f) | the Warrant is to be Authenticated to or for the account or benefit of a person in the United States or a U.S. Person; or |
(g) | such registration is effected in accordance with the internal procedures of the Depository and the Warrant Agent, |
following which, Warrants for those holders requesting the same shall be registered and issued to the beneficial owners of such Warrants or their nominees as directed by the holder. The Corporation shall provide a certificate executed by an officer of the Corporation giving notice to the Warrant Agent of the occurrence of any event outlined in this Section 2.6(2)(a) – (f).
(3) | Subject to the provisions of this Section 2.6, any exchange of CDS Global Warrants for Warrants which are not CDS Global Warrants may be made in whole or in part in accordance with the provisions of Section 2.11, mutatis mutandis. All such Warrants issued in exchange for a CDS Global Warrant or any portion thereof shall be registered in such names as the Depository for such CDS Global Warrants shall direct and shall be entitled to the same benefits and be subject to the same terms and conditions (except insofar as they relate specifically to CDS Global Warrants) as the CDS Global Warrants or portion thereof surrendered upon such exchange. |
(4) | Every Warrant that is Authenticated upon registration or transfer of a CDS Global Warrant, or in exchange for or in lieu of a CDS Global Warrant or any portion thereof, whether pursuant to this Section 2.6, or otherwise, shall be Authenticated in the form of, and shall be, a CDS Global Warrant, unless such Warrant is registered in the name of a person other than the Depository for such CDS Global Warrant or a nominee thereof. |
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(5) | Notwithstanding anything to the contrary in this Indenture, subject to Applicable Legislation, the CDS Global Warrant will be issued as an Uncertificated Warrant, unless otherwise requested in writing by the Depository or the Corporation. |
(6) | The rights of beneficial owners of Warrants who hold securities entitlements in respect of the Warrants through the book entry registration system shall be limited to those established by applicable law and agreements between the Depository and the Book Entry Participants and between such Book Entry Participants and the beneficial owners of Warrants who hold securities entitlements in respect of the Warrants through the book entry registration system, and such rights must be exercised through a Book Entry Participant in accordance with the rules and procedures of the Depository. |
(7) | Notwithstanding anything herein to the contrary, neither the Corporation nor the Warrant Agent nor any agent thereof shall have any responsibility or liability for: |
(a) | the electronic records maintained by the Depository relating to any ownership interests or any other interests in the Warrants or the depository system maintained by the Depository, or payments made on account of any ownership interest or any other interest of any person in any Warrant represented by an electronic position in the book entry registration system (other than the Depository or its nominee); |
(b) | maintaining, supervising or reviewing any records of the Depository or any Book Entry Participant relating to any such interest; or |
(c) | any advice or representation made or given by the Depository or those contained herein that relate to the rules and regulations of the Depository or any action to be taken by the Depository on its own direction or at the direction of any Book Entry Participant. |
(8) | The Corporation may terminate the application of this Section 2.6 in its sole discretion in which case all Warrants shall be evidenced by Warrant Certificates registered in the name of a Person other than the Depository. |
Section 2.7 | Warrant Certificate. |
(1) | For Warrants issued in certificated form, the form of certificate representing the Warrants shall be substantially as set out in Schedule “A” hereto or such other form as is authorized from time to time by the Warrant Agent. Each Warrant Certificate shall be Authenticated manually on behalf of the Warrant Agent. Each Warrant Certificate shall be signed by any one duly authorized signatory of the Corporation; whose signature shall appear on the Warrant Certificate and may be printed, lithographed or otherwise mechanically reproduced thereon and, in such event, certificates so signed are as valid and binding upon the Corporation as if it had been signed manually. Any Warrant Certificate which has one signature duly executed by the Corporation as hereinbefore provided shall be valid notwithstanding that the person whose signature is printed, lithographed or mechanically reproduced no longer holds office at the date of issuance of such Warrant Certificate. The Warrant Certificates may be engraved, printed or lithographed, or partly in one form and partly in another, as the Warrant Agent may determine. |
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(2) | The Warrant Agent shall Authenticate Uncertificated Warrants (whether upon original issuance, exchange, registration of transfer, partial payment, or otherwise) by completing its Internal Procedures and the Corporation shall, and hereby acknowledges that it shall, thereupon be deemed to have duly and validly issued such Uncertificated Warrants under this Indenture. Such Authentication shall be conclusive evidence that such Uncertificated Warrant has been duly issued hereunder and that the holder or holders are entitled to the benefits of this Indenture. The register shall be final and conclusive evidence as to all matters relating to Uncertificated Warrants with respect to which this Indenture requires the Warrant Agent to maintain records or accounts. In case of differences between the register at any time and any other time the register at the later time shall be controlling, absent manifest error and such Uncertificated Warrants are binding on the Corporation. |
(3) | Any Warrant Certificate validly issued in accordance with the terms of this Indenture in effect at the time of issue of such Warrant Certificate shall, subject to the terms of this Indenture and Applicable Legislation, validly entitle the holder to acquire Common Shares, notwithstanding that the form of such Warrant Certificate may not be in the form currently required by this Indenture. |
(4) | No Warrant shall be considered issued and shall be valid or obligatory or shall entitle the holder thereof to the benefits of this Indenture, until it has been Authenticated by the Warrant Agent. Authentication by the Warrant Agent, including by way of entry on the register, shall not be construed as a representation or warranty by the Warrant Agent as to the validity of this Indenture or of such Warrant Certificates or Uncertificated Warrants (except the due Authentication thereof) or as to the performance by the Corporation of its obligations under this Indenture and the Warrant Agent shall in no respect be liable or answerable for the use made of the Warrants or any of them or of the consideration thereof. Authentication by the Warrant Agent shall be conclusive evidence as against the Corporation that the Warrants so Authenticated have been duly issued hereunder and that the holder thereof is entitled to the benefits of this Indenture. |
(5) | No Warrant Certificate shall be considered issued and Authenticated or, if Authenticated, shall be obligatory or shall entitle the holder thereof to the benefits of this Indenture, until it has been Authenticated by manual signature by or on behalf of the Warrant Agent substantially in the form of the Warrant set out in Schedule “A” hereto. Such Authentication on any such Warrant Certificate shall be conclusive evidence that such Warrant Certificate is duly Authenticated and is valid and a binding obligation of the Corporation and that the holder is entitled to the benefits of this Indenture. |
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(6) | No Uncertificated Warrant shall be considered issued and shall be obligatory or shall entitle the holder thereof to the benefits of this Indenture, until it has been Authenticated by entry on the register of the particulars of the Uncertificated Warrant. Such entry on the register of the particulars of an Uncertificated Warrant shall be conclusive evidence that such Uncertificated Warrant is a valid and binding obligation of the Corporation and that the holder is entitled to the benefits of this Indenture. |
(7) | The Authentication by the Warrant Agent of any Warrants whether by way of entry on the register or otherwise shall not be construed as a representation or warranty by the Warrant Agent as to the validity of the Indenture or such Warrants (except the due Authentication thereof) or as to the performance by the Corporation of its obligations under this Indenture and the Warrant Agent shall in no respect be liable or answerable for the use made of the Warrants or any of them or the proceeds thereof. |
Section 2.8 | Legends. |
(1) | Neither the Warrants nor the Warrant Shares have been registered under the U.S. Securities Act or under any United States state securities laws. Each Warrant Certificate originally issued and each Warrant Certificate issued in exchange therefor or in substitution thereof shall, only until such time as the Registration Statement is declared effective, bear or be deemed to bear the following legends or such variations thereof as the Corporation may prescribe from time to time: |
“THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.”;
The Warrant Agent shall be entitled to request any other documents that it may require in accordance with its internal policies for the removal of the legend set forth above.
(2) | Each CDS Global Warrant if issued on a certificated basis originally issued in Canada and held by the Depository, and each CDS Global Warrant issued in exchange therefor or in substitution thereof shall bear or be deemed to bear the following legend or such variations thereof as the Corporation may prescribe from time to time: |
“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO NIOCORP DEVELOPMENTS LTD. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.”
(3) | Each Warrant Certificate originally issued and each CDS Global Warrant originally issued in Canada and held by the Depository on the date hereof (and each such Warrant Certificate or CDS Global Warrant, as the case may be, issued in exchange therefore or in substitution thereof prior to the date that is four months and a day after the date hereof) shall bear or be deemed to bear the following legend or such variations thereof as the Corporation my prescribe from time to time: |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE NOVEMBER 27, 2017.
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And, if applicable, the additional legend:
WITHOUT PRIOR APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL NOVEMBER 27, 2017.
(4) | Notwithstanding any other provisions of this Indenture, in processing and registering transfers of Warrants, no duty or responsibility whatsoever shall rest upon the Warrant Agent to determine the compliance by any transferor or transferee with the terms of the legend contained in Section 2.8(1), 2.8(2), or 2.8(3) or with the relevant securities laws or regulations, including, without limitation, Regulation S, and the Warrant Agent shall be entitled to assume that all transfers are legal and proper. The Corporation shall direct the Warrant Agent in writing as to matters related to any applicable hold periods and applicable securities legislation and legending restrictions and requirements. Notwithstanding any other provisions of this Indenture, on the issuance or transfer of any Warrants and Common Shares, no duty or responsibility whatsoever shall rest upon the Warrant Agent, or transfer agent to determine or verify the compliance with any applicable laws or regulatory requirements including, without limitation, Regulation S of the U.S. Securities Act, and the Warrant Agent shall be entitled to assume that all transfers of Warrants and Common Shares issuable upon conversion thereof are permissible pursuant to all applicable laws and regulatory requirements and the terms of this Indenture. |
(5) | The Warrant Agent may assume that the address on the register of the Warrantholder is the actual address of the Warrantholder and is also determinative of the residence of such Warrantholder and the address of any transferee to whom securities are transferred as shown on the transfer form is also determinative of the residence of such transferee |
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Section 2.9 | Register of Warrants |
(1) | The Warrant Agent shall maintain records and accounts concerning the Warrants, whether certificated or uncertificated, which shall contain the information called for below with respect to each Warrant, together with such other information as may be required by law or as the Warrant Agent may elect to record. All such information shall be kept in one set of accounts and records which the Warrant Agent shall designate (in such manner as shall permit it to be so identified as such by an unaffiliated party) as the register of the holders of Warrants. The information to be entered for each account in the register of Warrants at any time shall include (without limitation): |
(a) | the name and address of the Registered Warrantholder, the date of Authentication thereof and the number of Warrants; |
(b) | whether such Warrant is a Warrant Certificate or an Uncertificated Warrant and, if a Warrant Certificate, the unique number or code assigned to and imprinted thereupon and, if an Uncertificated Warrant, the unique number or code assigned thereto if any; |
(c) | whether such Warrant has been cancelled; and |
(d) | a register of transfers in which all transfers of Warrants and the date and other particulars of each transfer shall be entered. |
The register shall be available for inspection by the Corporation and or any Warrantholder during the Warrant Agent’s regular business hours on a Business Day and upon payment to the Warrant Agent of its reasonable fees. Any Warrantholder exercising such right of inspection shall first provide an affidavit in form satisfactory to the Corporation and the Warrant Agent stating the name and address of the Warrantholder and agreeing not to use the information therein except in connection with an effort to call a meeting of Warrantholders or to influence the voting of Warrantholders at any meeting of Warrantholders.
(2) | Once an Uncertificated Warrant has been Authenticated, the information set forth in the register with respect thereto at the time of Authentication may be altered, modified, amended, supplemented or otherwise changed only to reflect exercise or proper instructions to the Warrant Agent from the holder as provided herein, except that the Warrant Agent may act unilaterally to make purely administrative changes internal to the Warrant Agent and changes to correct errors. Each person who becomes a holder of an Uncertificated Warrant, by his, her or its acquisition thereof shall be deemed to have irrevocably (i) consented to the foregoing authority of the Warrant Agent to make such minor error corrections and (ii) agreed to pay to the Warrant Agent, promptly upon written demand, the full amount of all loss and expense (including without limitation reasonable legal fees of the Corporation and the Warrant Agent plus interest, at an appropriate then prevailing rate of interest to the Warrant Agent), sustained by the Corporation or the Warrant Agent as a proximate result of such error if but only if and only to the extent that such present or former holder realized any benefit as a result of such error and could reasonably have prevented, forestalled or minimized such loss and expense by prompt reporting of the error or avoidance of accepting benefits thereof whether or not such error is or should have been timely detected and corrected by the Warrant Agent; provided, that no person who is a bona fide purchaser shall have any such obligation to the Corporation or to the Warrant Agent. |
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Section 2.10 | Issue in Substitution for Warrant Certificates Lost, etc. |
(1) | If any Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law, shall issue and thereupon the Warrant Agent shall certify and deliver, a new Warrant Certificate of like tenor, and bearing the same legend, if applicable, as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated Warrant Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Warrant Certificate, and the substituted Warrant Certificate shall be in a form approved by the Warrant Agent and the Warrants evidenced thereby shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Warrants issued or to be issued hereunder. |
(2) | The applicant for the issue of a new Warrant Certificate pursuant to this Section 2.10 shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issuance thereof, furnish to the Corporation and to the Warrant Agent such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to the Corporation and to the Warrant Agent, in their sole discretion, and such applicant shall also be required to furnish an indemnity and surety bond in amount and form satisfactory to the Corporation and the Warrant Agent, in their sole discretion, and shall pay the reasonable charges of the Corporation and the Warrant Agent in connection therewith. |
Section 2.11 | Exchange of Warrant Certificates. |
(1) | Any one or more Warrant Certificates representing any number of Warrants may, upon compliance with the reasonable requirements of the Warrant Agent (including compliance with applicable securities legislation), be exchanged for one or more other Warrant Certificates representing the same aggregate number of Warrants, and bearing the same legend, if applicable, as represented by the Warrant Certificate or Warrant Certificates so exchanged. |
(2) | Warrant Certificates may be exchanged only at the Warrant Agency or at any other place that is designated by the Corporation with the approval of the Warrant Agent. Any Warrant Certificate from the holder (or such other instructions, in form satisfactory to the Warrant Agent), tendered for exchange shall be surrendered to the Warrant Agency and cancelled by the Warrant Agent. |
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Section 2.12 | Transfer and Ownership of Warrants. |
(1) | The Warrants may only be transferred on the register kept by the Warrant Agent at the Warrant Agency by the holder or its legal representatives or its attorney duly appointed by an instrument in writing in form and execution satisfactory to the Warrant Agent only upon (a) in the case of a Warrant Certificate, surrendering to the Warrant Agent at the Warrant Agency the Warrant Certificates representing the Warrants to be transferred together with a duly executed transfer form as set forth in Schedule “A” attached hereto and (b) in the case of Book Entry Warrants, in accordance with procedures prescribed by the Depository under the book entry registration system, and (c) upon compliance with: |
(i) | the conditions herein; |
(ii) | such reasonable requirements as the Warrant Agent may prescribe; and |
(iii) | all applicable securities legislation and requirements of regulatory authorities; |
and such transfer shall be duly noted in such register by the Warrant Agent. Upon compliance with such requirements, the Warrant Agent shall issue to the transferee of a Warrant Certificate, a Warrant Certificate and to the transferee of an Uncertificated Warrant, an Uncertificated Warrant (and Uncertificated Warrants that are held as Book Entry Warrants shall be transferred and recorded through the relevant Book Entry Participant in accordance with the book entry registration system as the entitlement holder in respect of such Warrants), or the Warrant Agent shall Authenticate and deliver a Warrant Certificate upon request that part of the CDS Global Warrant be certificated. Transfers within the systems of the Depository are not the responsibility of the Warrant Agent and will not be noted on the register maintained by the Warrant Agent.
(2) | If a Warrant Certificate tendered for transfer bears any of the legends set forth in Section 2.8(1), the Warrant Agent shall not register such transfer unless the transferor has provided the Warrant Agent with the Warrant Certificate and (A) the transfer is made to the Corporation or (B) the transferor provides an opinion of counsel of recognized standing, reasonably satisfactory to the Corporation and the Warrant Agent that the proposed transfer is exempt from registration with applicable state laws and the U.S. Securities Act or (C) Registration Statement with respect to the Warrants has been declared effective. |
(3) | Subject to the provisions of this Indenture, Applicable Legislation and applicable law, the Warrantholder shall be entitled to the rights and privileges attaching to the Warrants, and the issue of Common Shares by the Corporation upon the exercise of Warrants in accordance with the terms and conditions herein contained shall discharge all responsibilities of the Corporation and the Warrant Agent with respect to such Warrants and neither the Corporation nor the Warrant Agent shall be bound to inquire into the title of any such holder. |
Section 2.13 | Cancellation of Surrendered Warrants. |
All Warrant Certificates surrendered pursuant to Article 3 shall be cancelled by the Warrant Agent and upon such circumstances all such Uncertificated Warrants shall be deemed cancelled and so noted on the register by the Warrant Agent. Upon request by the Corporation, the Warrant Agent shall furnish to the Corporation a cancellation certificate identifying the Warrant Certificates so cancelled, the number of Warrants evidenced thereby, the number of Common Shares, if any, issued pursuant to such Warrants and the details of any Warrant Certificates issued in substitution or exchange for such Warrant Certificates cancelled.
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Article
3
EXERCISE OF WARRANTS
Section 3.1 | Right of Exercise. |
Subject to the provisions hereof, each Registered Warrantholder may exercise the right conferred on such holder to subscribe for and purchase one (1) Common Share for each Warrant after the Issue Date and prior to the Expiry Time and in accordance with the conditions herein.
Section 3.2 | Warrant Exercise. |
(1) | Other than Warrants held by the Depository, Registered Warrantholders of Warrant Certificates who wish to exercise the Warrants held by them in order to acquire Common Shares must complete the exercise form (the “Exercise Notice”) attached to the Warrant Certificate(s) which form is attached hereto as Schedule “B”, which may be amended by the Corporation with the consent of the Warrant Agent, if such amendment does not, in the reasonable opinion of the Corporation and the Warrant Agent, which may be based on the advice of Counsel, materially and adversely affect the rights, entitlements and interests of the Warrantholders, and deliver such certificate(s), the executed Exercise Notice and a certified cheque, bank draft or money order payable to or to the order of the Corporation for the aggregate Exercise Price to the Warrant Agent at the Warrant Agency. The Warrants represented by a Warrant Certificate shall be deemed to be surrendered upon personal delivery of such certificate, Exercise Notice and aggregate Exercise Price or, if such documents are sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at the office referred to above. |
(2) | In addition to completing the Exercise Form attached to the Warrant Certificate(s), at any time prior to effectives of the Registration Statement a Warrantholder who is a person outside of the United States, not a U.S. Person, a person not exercising for the account or benefit of a U.S. Person or person in the United States, and person not requesting delivery of the Common Shares issuable upon exercise of the Warrants in the United States must (a) provide a completed and executed Regulation S Certificate or (b) an opinion of counsel of recognised standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent that the exercise is exempt from the registration requirements of the U.S. Securities Act. |
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(3) | In addition to completing the Exercise Form attached to the Warrant Certificate(s), at any time prior to effectiveness of the Registration Statement a Warrantholder who is a person in the United States, a U.S. Person, a person exercising for the account or benefit of a U.S. Person, or person requesting delivery of the Warrant Shares issuable upon the exercise of the Warrants in the United States must (a) provide a completed and executed U.S. Purchaser Letter or (b) an opinion of counsel of recognised standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent that the exercise is exempt from the registration requirements of applicable securities laws of any state of the United States and the U.S. Securities Act; provided however that in the case of a Warrantholder that is the original purchaser of Warrants and who delivered the U.S. Accredited Investor Certificate attached to the subscription agreement of the Corporation in connection with its purchase of Units pursuant to the private placement under which the Warrants were issued, such Warrantholder will not be required to deliver a U.S. Purchaser Letter or an opinion of counsel in connection with the due exercise of the Warrant at a time when the representations, warranties and covenants made by the Warrantholder in the U.S. Accredited Investor Certificate remain true and correct and the Warrantholder represents to the Corporation as such. |
(4) | A Registered Warrantholder of Uncertificated Warrants evidenced by a security entitlement in respect of Warrants must complete the Exercise Notice and deliver the executed Exercise Notice and a certified cheque, bank draft or money order payable to or to the order of the Corporation for the aggregate Exercise Price to the Warrant Agent at the Warrant Agency. The Uncertificated Warrants shall be deemed to be surrendered upon receipt of the Exercise Notice and aggregate Exercise Price or, if such documents are sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at the office referred to above. |
(5) | A beneficial owner of Uncertificated Warrants by a security entitlement in respect of Warrants in the book entry registration system, or Warrant Certificates held by the Depository, who desires to exercise his or her Warrants must do so by causing a Book Entry Participant to deliver to the Depository on behalf of the entitlement holder, notice of the owner’s intention to exercise Warrants in a manner acceptable to the Depository. Forthwith upon receipt by the Depository of such notice, as well as payment for the aggregate Exercise Price, the Depository shall deliver to the Warrant Agent confirmation of its intention to exercise Warrants (a “Confirmation”) in a manner acceptable to the Warrant Agent, including by electronic means through a book based registration system, including CDSX. An electronic exercise of the Warrants at any time prior to effectiveness of the Registration Statement initiated by the Book Entry Participant through a book based registration system, including CDSX, shall constitute a representation to both the Corporation and the Warrant Agent that the Warrant Shares when issued will not be subject to United States or Canadian resale restrictions. If the CDS Participant is not able to make or deliver the foregoing representations by initiating the electronic exercise of the Warrants, then such Warrants shall be withdrawn from the book based registration system, including CDSX by the Book Entry Participant and an individually registered Warrant Certificate shall be issued by the Warrant Agent to such beneficial owner or Book Entry Participant and the exercise procedures set forth in Section 3.2(1) shall be followed. |
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(6) | Payment representing the aggregate Exercise Price must be provided to the appropriate office of the Book Entry Participant in a manner acceptable to it. A notice in form acceptable to the Book Entry Participant and payment from such beneficial holder should be provided to the Book Entry Participant sufficiently in advance so as to permit the Book Entry Participant to deliver notice and payment to the Depository and for the Depository in turn to deliver notice and payment to the Warrant Agent prior to the Expiry Time. The Depository will initiate the exercise by way of the Confirmation and forward the aggregate Exercise Price electronically to the Warrant Agent and the Warrant Agent, in accordance with Section 3.6, will execute the exercise by issuing to the Depository through the book entry registration system the Common Shares to which the exercising Warrantholder is entitled pursuant to the exercise. Any expense associated with the exercise process will be for the account of the entitlement holder exercising the Warrants and/or the Book Entry Participant exercising the Warrants on its behalf. |
(7) | By causing a Book Entry Participant to deliver notice to the Depository, a Warrantholder shall be deemed to have irrevocably surrendered his or her Warrants so exercised and appointed such Book Entry Participant to act as his or her exclusive settlement agent with respect to the exercise and the receipt of Common Shares in connection with the obligations arising from such exercise. |
(8) | Any notice which the Depository determines to be incomplete, not in proper form or not duly executed shall for all purposes be void and of no force and effect and the exercise to which it relates shall be considered for all purposes not to have been exercised thereby. A failure by a Book Entry Participant to exercise or to give effect to the settlement thereof in accordance with the Warrantholder’s instructions will not give rise to any obligations or liability on the part of the Corporation or Warrant Agent to the Book Entry Participant or the Warrantholder. |
(9) | The Exercise Notice referred to in this Section 3.2 shall be signed by the Registered Warrantholder, or its executors or administrators or other legal representatives or an attorney of the Registered Warrantholder, duly appointed by an instrument in writing satisfactory to the Warrant Agent but such Exercise Notice need not be executed by the Depository. |
(10) | Any exercise referred to in this Section 3.2 shall require that the entire Exercise Price for Common Shares subscribed must be paid at the time of subscription and such Exercise Price and original Exercise Notice executed by the Registered Warrantholder or the Confirmation from the Depository must be received by the Warrant Agent prior to the Expiry Time. |
(11) | Warrants may only be exercised pursuant to this Section 3.2 by or on behalf of a Registered Warrantholder, as applicable, who makes the certifications set forth on the Exercise Notice set out in Schedule “B” or as provided herein. |
(12) | If the form of Exercise Notice set forth in the Warrant Certificate shall have been amended, the Corporation shall cause the amended Exercise Notice to be forwarded to all Registered Warrantholders. |
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(13) | Exercise Notices and Confirmations must be delivered to the Warrant Agent at any time during the Warrant Agent’s actual business hours on any Business Day prior to the Expiry Time. Any Exercise Notice or Confirmations received by the Warrant Agent after business hours on any Business Day other than the Expiry Date will be deemed to have been received by the Warrant Agent on the next following Business Day. |
(14) | Any Warrant with respect to which a Confirmation or Exercise Notice is not received by the Warrant Agent before the Expiry Time shall be deemed to have expired and become void and all rights with respect to such Warrants shall terminate and be cancelled. |
Section 3.3 | Prohibition on Exercise by U.S. Persons; Legended Certificates |
(1) | Subject to Section 3.3(2) below, at any time prior to effectiveness of the Registration Statement, (i) Warrants may not be exercised within the United States or by or on behalf of any U.S. Person; and (ii) no Warrant Shares issued upon exercise of Warrants may be delivered to any address in the United States. Subject to Section 3.3(3) below, Warrants may not be exercised outside of the United States by or behalf of a non-U.S. Person, provided that following effectiveness of the Registration Statement the foregoing shall not be applicable. |
(2) | Notwithstanding Section 3.3(1), at any time prior to effectiveness of the Registration Statement, Warrants which bear the legend set forth in Section 2.8(1) may be exercised in the United States or by or on behalf of a U.S. Person, and Warrant shares issued upon exercise of any such Warrants may be delivered to an address in the United States, provided that (a) the Person exercising the Warrants (i) is an original U.S. Purchaser who purchased the Warrants directly from the Corporation (ii) is an accredited investor that satisfies one or more of the criteria set forth in Rule 501(a) of Regulation D or is a “qualified purchaser” as defined in Section 2(a)(51) of the U.S. Investment Company Act and (b) delivers a completed and executed U.S. Purchaser Letter or provides in form and substance satisfactory to the Corporation and Warrant Agent a legal opinion which confirms that issuance of shares is in compliance with the applicable state laws and the U.S. Securities Act; provided however that in the case of a Warrantholder that is the original purchaser of the Warrants and who delivered the U.S. Accredited Investor Certificate attached to the subscription agreement of the Corporation in connection with its purchase of Units pursuant to the private placement under which the Warrants were issued, such Warrantholder will not be required to deliver a U.S. Purchaser Letter or an opinion of counsel in connection with the due exercise of the Warrant at a time when the representations, warranties and covenants made by the Warrantholder in the U.S. Accredited Investor Certificate remain true and correct and the Warrantholder represents to the Corporation as such, provided that following effectiveness of the Registration Statement the foregoing shall not be applicable. |
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(3) | Notwithstanding Section 3.3(1), at any time prior to effectiveness of the Registration Statement, Warrants may be exercised outside the United States by or on behalf of a non-U.S. Person, provided that the person exercising the Warrants delivers a completed and executed Regulation S Certificate or provides in form and substance satisfactory to the Corporation and Warrant Agent a legal opinion from counsel of recognized standing which confirms that issuance of shares is in compliance with the U.S. Securities Act, provided that following effectiveness of the Registration Statement the foregoing shall not be applicable. |
(4) | At any time prior to effectiveness of the Registration Statement, all certificates representing Common Shares issued upon the exercise of Warrants shall bear the following legend: |
“THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
(5) | Certificates representing Common Shares issued upon the exercise of Warrant Certificates (and issued in substitution or exchange therefor) prior to the date that is four months and one day after the date hereof shall bear the following legend: |
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE NOVEMBER 27, 2017.”
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And, if applicable, the additional legend as follows:
“WITHOUT PRIOR APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL NOVEMBER 27, 2017.”
Section 3.4 | Transfer Fees and Taxes. |
If any of the Common Shares subscribed for are to be issued to a person or persons other than the Registered Warrantholder, the Registered Warrantholder shall execute the form of transfer and will comply with such reasonable requirements as the Warrant Agent may stipulate and will pay to the Corporation or the Warrant Agent on behalf of the Corporation, all applicable transfer or similar taxes and the Corporation will not be required to issue or deliver certificates evidencing Common Shares unless or until such Warrantholder shall have paid to the Corporation or the Warrant Agent on behalf of the Corporation, the amount of such tax or shall have established to the satisfaction of the Corporation and the Warrant Agent that such tax has been paid or that no tax is due.
Section 3.5 | Warrant Agency. |
To facilitate the exchange, transfer or exercise of Warrants and compliance with such other terms and conditions hereof as may be required, the Corporation has appointed the Warrant Agency, as the agency at which Warrants may be surrendered for exchange or transfer or at which Warrants may be exercised and the Warrant Agent has accepted such appointment. The Corporation may from time to time designate alternate or additional places as the Warrant Agency (subject to the Warrant Agent’s prior approval) and will give notice to the Warrant Agent of any proposed change of the Warrant Agency. Branch registers shall also be kept at such other place or places, if any, as the Corporation, with the approval of the Warrant Agent, may designate. The Warrant Agent will from time to time when requested to do so by the Corporation or any Registered Warrantholder, upon payment of the Warrant Agent’s reasonable charges, furnish a list of the names and addresses of Registered Warrantholders showing the number of Warrants held by each such Registered Warrantholder.
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Section 3.6 | Effect of Exercise of Warrant Certificates. |
(1) | Upon the exercise of Warrants Certificates pursuant to and in compliance with Section 3.2 and subject to Section 3.3, the Common Shares to be issued pursuant to the Warrants exercised shall be deemed to have been issued and the person or persons to whom such Common Shares are to be issued shall be deemed to have become the holder or holders of such Common Shares within five Business Days of the Exercise Date unless the register shall be closed on such date, in which case the Common Shares subscribed for shall be deemed to have been issued and such person or persons deemed to have become the holder or holders of record of such Common Shares, on the date on which such register is reopened. It is hereby understood that in order for persons to whom Common Shares are to be issued, to become holders of Common Shares on record on the Exercise Date, beneficial holders must commence the exercise process sufficiently in advance so that the Warrant Agent is in receipt of all items of exercise at least one Business Day prior to such Exercise Date. |
(2) | Within five Business Days after the Exercise Date with respect to a Warrant, the Warrant Agent shall use commercially reasonable efforts to cause to be delivered or mailed to the person or persons in whose name or names the Warrant is registered or, if so specified in writing by the holder, cause to be delivered to such person or persons at the Warrant Agency where the Warrant Certificate was surrendered, a certificate or certificates for the appropriate number of Common Shares subscribed for, or any other appropriate evidence of the issuance of Common Shares to such person or persons in respect of Common Shares issued under the book entry registration system. |
Section 3.7 | Partial Exercise of Warrants; Fractions. |
(1) | The holder of any Warrants may exercise his right to acquire a number of whole Common Shares less than the aggregate number which the holder is entitled to acquire. In the event of any exercise of a number of Warrants less than the number which the holder is entitled to exercise, the holder of Warrants upon such exercise shall, in addition, be entitled to receive, without charge therefor, a new Warrant Certificate(s), bearing the same legend, if applicable, or other appropriate evidence of Warrants, in respect of the balance of the Warrants held by such holder and which were not then exercised. |
(2) | Notwithstanding anything herein contained including any adjustment provided for in Section 4.1, the Corporation shall not be required, upon the exercise of any Warrants, to issue fractions of Common Shares. Warrants may only be exercised in a sufficient number to acquire whole numbers of Common Shares. Any fractional Common Shares shall be rounded down to the nearest whole number and the holder of such Warrants shall not be entitled to any compensation in respect of any fractional Common Shares which is not issued. |
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Section 3.8 | Expiration of Warrants. |
Immediately after the Expiry Time, all rights under any Warrant in respect of which the right of acquisition provided for herein shall not have been exercised shall cease and terminate and each Warrant shall be void and of no further force or effect.
Section 3.9 | Accounting and Recording. |
(1) | The Warrant Agent shall promptly account to the Corporation with respect to Warrants exercised, and shall promptly forward to the Corporation (or into an account or accounts of the Corporation with the bank or trust company designated by the Corporation for that purpose), all monies received by the Warrant Agent on the subscription of Common Shares through the exercise of Warrants. All such monies and any securities or other instruments, from time to time received by the Warrant Agent, shall be received in trust for, and shall be segregated and kept apart by the Warrant Agent, the Warrantholders and the Corporation as their interests may appear. |
(2) | The Warrant Agent shall record the particulars of Warrants exercised, which particulars shall include the names and addresses of the persons who become holders of Common Shares on exercise and the Exercise Date, in respect thereof. The Warrant Agent shall provide such particulars in writing to the Corporation within five Business Days of any request by the Corporation therefor. |
Section 3.10 | Securities Restrictions. |
Notwithstanding any provision to the contrary contained in this Indenture, in relation to the issuance of Common Shares outside of Canada or the United States, no Common Shares will be issued pursuant to the exercise of any Warrant if the issuance of such securities would constitute a violation of the securities laws of any such jurisdiction, and, without limiting the generality of the foregoing, the Corporation will legend the certificates representing the Common Shares if, in the opinion of counsel to the Corporation such legend is necessary in order to avoid a violation of any securities laws of any such jurisdiction or to comply with the requirements of any stock exchange on which the Common Shares are listed, provided that if, at any time, in the opinion of outside counsel to the Corporation, acting reasonably, such legends are no longer necessary in order to avoid a violation of any such laws, or the holder of any such legended certificate, at his expense, provides the Corporation and Warrant Agent with evidence satisfactory in form and substance to the Corporation and Warrant Agent (which may include an opinion of counsel of recognized standing satisfactory to the Corporation and Warrant Agent) to the effect that such holder is entitled to sell or otherwise transfer such securities in a transaction in which such legends are not required, such legended certificates may thereafter be surrendered to the Corporation in exchange for a certificate which does not bear such legends. For greater certainty, should no Registration Statement be effective, the Corporation shall permit, at as set forth in Section 3.11, the cashless exercise or redemption of Warrants and shall not be permitted to issue legended Common Shares in lieu thereof.
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Section 3.11 | Cashless Exercise or Redemption of Warrants. |
(1) | If at any time prior to the Registration Statement becoming effective or at any time after effectiveness the Registration Statement ceases to be effective, prior to the Expiry Time and for so long as the Registration Statement is not effective, any holder of any Warrant may provide the Corporation and the Warrant Agent with a notice of intent to exercise such Warrant by surrendering the certificate representing such Warrant at any time during such period to the Warrant Agent at the Warrant Agency, with a duly completed and executed Exercise Notice and a notice of intent to exercise form in substantially the form attached hereto in Schedule “A” (“Notice of Intent to Exercise Form”), upon which the holder shall indicate that he or she is exercising his or her right to exercise the Warrants. Upon receipt of the Exercise Notice and Notice of Intent to Exercise Form, the Warrant Agent at the Warrant Agency shall inform the Corporation of the Warrantholder’s intent to exercise. Within three business days of notice from the Warrant Agent to the Corporation of the provision of a Notice of Intent to Exercise Form, the Corporation shall (i) elect, at its sole discretion, to either (a) redeem the Warrants or (b) permit the cashless exercise of the Warrants, each as provided in this section, and (ii) deliver an officer’s certificate to the Warrant Agent of such election (the “Officer’s Certificate”), which election shall be irrevocable. Alternatively, the Corporation shall notify the Warrant Agent by Officer’s Certificate within three business days of notice from the Warrant Agent of such provision of the Notice of Intent to Exercise Form, that such Warrantholder is entitled to exercise his or her Warrant, in whole or in part, in accordance with Section 3.2, and such Warrantholder shall be notified forthwith by the Warrant Agent and shall return the certificate representing Warrants that were surrendered with the Notice of Intent to Exercise Form. If the holder exercises the right provided for in this Section 3.11(1) in respect of a lesser number of Warrants than the aggregate number of Warrants represented by the Warrant Certificate surrendered, the Warrantholder shall be entitled to receive a further Warrant Certificate in respect of the Warrants represented by the Warrant Certificates that have not been part of a cashless exercise or redeemed. |
(2) | In connection with the election of the Corporation to permit the exercise by a Warrantholder of the cashless exercise or to redeem the Warrants in accordance with Section 3.11(1) the Corporation shall in the Officer’s Certificate delivered to the Warrant Agent in accordance with Section 3.11(1), set out the details of the Corporation’s decision whether to either (i) redeem the Warrants or (ii) permit the cashless exercise of the Warrants, each as provided in section 3.11(3), and set out the particulars of the Warrants to be exercised and the name and address of the Warrantholder, the number of Common Shares to be issued and not be subject to any restrictions on transfer in the United States or Canada, or Total Redemption Amount (less any w/h tax applicable) to be paid and setting out the basis of the calculations pursuant to Section 3.11(3) (“Final Exercise Notice”). The Warrant Agent shall rely on the Officer’s Certificate without further investigation. |
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(3) | Within five Business Days of receipt of the Final Exercise Notice referred to in Section 3.11(2), the Corporation shall deliver or cause to deliver either (a) in the case of a redemption, a cheque in the amount of money determined (“Total Redemption Amount”) by multiplying the number of Common Shares that would have been issued if the Warrants to be redeemed were exercised on the Determination Date (as defined below) by the excess (if any) of the Current Market Price per Common Share on the Determination Date over the Exercise Price or (b) in the case of a cashless exercise, a certificate representing the number of Common Shares to be issued equal to the quotient obtained by dividing (A) (i) the Current Market Price per Common Share on the Determination Date minus the Exercise Price; (ii) multiplied by the number of Common Shares which would, but for such cashless exercise, have been issuable (“Total Share Number”) by (B) the Current Market Price of the Common Shares on the Determination Date, to be mailed to such Warrantholder at the address specified in such Notice of Intent to Exercise Form, or, if so specified in such Notice of Intent to Exercise Form, to be made available for pick-up by such Warrantholder at the Warrant Agency. In the event of a redemption, if payment is made through the Warrant Agent, the Corporation shall deposit sufficient funds by 11:00am (EST) three Business Days prior to the date that a cheque is to be mailed out to such Warrantholder. The Corporation shall provide written instructions with regards to any applicable w/h tax and tax reporting requirements. |
(4) | “Determination Date” means, with respect to any Warrants subject to the provisions of Error! Reference source not found. hereof, the date the Warrant Certificate together with a duly completed and executed Notice of Intent to Exercise Form is surrendered to the Warrant Agent. A Warrant Certificate with the duly completed and executed Notice of Intent to Exercise Form shall be deemed to be surrendered upon personal delivery thereof, or if sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at the Warrant Agency. |
Article
4
ADJUSTMENT OF NUMBER OF WARRANT SHARES
AND EXERCISE PRICE
Section 4.1 | Adjustment of Number of Common Shares and Exercise Price. |
The subscription rights in effect under the Warrants for Common Shares issuable upon the exercise of the Warrants shall be subject to adjustment from time to time as follows:
(a) | if, at any time during the Adjustment Period, the Corporation shall: |
(i) | subdivide, re-divide or change its outstanding Common Shares into a greater number of Common Shares; |
(ii) | reduce, combine or consolidate its outstanding Common Shares into a lesser number of Common Shares; or |
(iii) | issue Common Shares or securities exchangeable for, or convertible into, Common Shares to all or substantially all of the holders of Common Shares by way of stock dividend or other distribution (other than a distribution of Common Shares upon the exercise of Warrants or any outstanding options); |
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(any of such events in Section 4.1(a)(i), (ii) or (iii) being called a “Common Share Reorganization”) then the Exercise Price shall be adjusted as of the effect on the effective date or record date of such subdivision, re-division, change, reduction, combination, consolidation or distribution, as the case may be, shall in the case of the events referred to in (i) or (iii) above be decreased in proportion to the number of outstanding Common Shares resulting from such subdivision, re-division, change or distribution, or shall, in the case of the events referred to in (ii) above, be increased in proportion to the number of outstanding Common Shares resulting from such reduction, combination or consolidation by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding as of the effective date or record date after giving effect to such Common Shares Reorganization (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Share that would have been outstanding had such securities been exchanged for or converted into Common Shares on such record date or effective date). Such adjustment shall be made successively whenever any event referred to in this Section 4.1(a) shall occur. Upon any adjustment of the Exercise Price pursuant to Section 4.1(a), the Exchange Rate shall be contemporaneously adjusted by multiplying the number of Common Shares theretofore obtainable on the exercise thereof by a fraction of which the numerator shall be the Exercise Price in effect immediately prior to such adjustment and the denominator shall be the Exercise Price resulting from such adjustment;
(b) | if and whenever at any time during the Adjustment Period, the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all the holders of its outstanding Common Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Common Shares (or securities convertible or exchangeable into Common Shares) at a price per Common Share (or having a conversion or exchange price per Common Share) less than 95% of the Current Market Price on such record date (a “Rights Offering”), the Exercise Price shall be adjusted immediately after such record date so that it shall equal the amount determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date plus a number of Common Shares equal to the number arrived at by dividing the aggregate price of the total number of additional Common Shares offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered) by the Current Market Price, and of which the denominator shall be the total number of Common Shares outstanding on such record date plus the total number of additional Common Shares offered for subscription or purchase or into which the convertible or exchangeable securities so offered are convertible or exchangeable; any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such computation; such adjustment shall be made successively whenever such a record date is fixed; to the extent that no such rights or warrants are exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be in effect if such record date had not been fixed or, if any such rights or warrants are exercised, to the Exercise Price which would then be in effect based upon the number of Common Shares (or securities convertible or exchangeable into Common Shares) actually issued upon the exercise of such rights or warrants, as the case may be. Upon any adjustment of the Exercise Price pursuant to this Section 4.1(b), the Exchange Rate will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exchange Rate in effect on such record date by a fraction, of which the numerator shall be the Exercise Price in effect immediately prior to such adjustment and the denominator shall be the Exercise Price resulting from such adjustment. Such adjustment will be made successively whenever such a record date is fixed, provided that if two or more such record dates or record dates referred to in this Section 4.1(b) are fixed within a period of 25 Trading Days, such adjustment will be made successively as if each of such record dates occurred on the earliest of such record dates; |
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(c) | if and whenever at any time during the Adjustment Period the Corporation shall fix a record date for the making of a distribution to all or substantially all the holders of its outstanding Common Shares of (i) securities of any class, whether of the Corporation or any other trust (other than Common Shares), (ii) rights, options or warrants to subscribe for or purchase Common Shares (or other securities convertible into or exchangeable for Common Shares), other than pursuant to a Rights Offering; (iii) evidences of its indebtedness or (iv) any property or other assets then, in each such case, and if such distribution does not fall under Section 4.1(a) or Section 4.1(b), the Exercise Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date multiplied by the Current Market Price on such record date, less the excess, if any, of the fair market value (as determined by the directors, acting reasonably, at the time such distribution is authorized and subject to TSX acceptance) on such record date of such securities or other assets so issued or distributed over the fair market value of any consideration received therefor by the Corporation from the holders of the Common Shares, and of which the denominator shall be the total number of Common Shares outstanding on such record date multiplied by the Current Market Price; and Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such computation; such adjustment shall be made successively whenever such a record date is fixed; to the extent that such distribution is not so made, the Exercise Price shall be readjusted to the Exercise Price which would then be in effect if such record date had not been fixed. Upon any adjustment of the Exercise Price pursuant to this Section 4.1(c), the Exchange Rate will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exchange Rate in effect on such record date by a fraction, of which the numerator shall be the Exercise Price in effect immediately prior to such adjustment and the denominator shall be the Exercise Price resulting from such adjustment; |
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(d) | if and whenever at any time during the Adjustment Period, there is a reclassification of the Common Shares or a capital reorganization of the Corporation other than as described in Section 4.1(a) or a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate, trust, partnership or other entity, or a sale or conveyance of the property and assets of the Corporation as an entirety or substantially as an entirety to any other body corporate, trust, partnership or other entity, any Registered Warrantholder who has not exercised its right of acquisition prior to the effective date of such reclassification, capital reorganization, consolidation, amalgamation, arrangement or merger, sale or conveyance, upon the exercise of such right thereafter, shall be entitled to receive upon payment of the Exercise Price and shall accept, in lieu of the number of Common Shares that prior to such effective date the Registered Warrantholder would have been entitled to receive, the number of shares or other securities or property of the Corporation or of the body corporate, trust, partnership or other entity resulting from such merger, amalgamation or consolidation, or to which such sale or conveyance may be made, as the case may be, that such Registered Warrantholder would have been entitled to receive on such reclassification, capital reorganization, consolidation, amalgamation, arrangement or merger, sale or conveyance, if, on the effective date thereof, as the case may be, the Registered Warrantholder had been the registered holder of the number of Common Shares to which prior to such effective date it was entitled to acquire upon the exercise of the Warrants. If determined appropriate by the Warrant Agent, relying on advice of Counsel, to give effect to or to evidence the provisions of this Section 4.1(d), the Corporation, its successor, or such purchasing body corporate, partnership, trust or other entity, as the case may be, shall, prior to or contemporaneously with any such reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance, enter into an indenture which shall provide, to the extent possible, for the application of the provisions set forth in this Indenture with respect to the rights and interests thereafter of the Registered Warrantholders to the end that the provisions set forth in this Indenture shall thereafter correspondingly be made applicable, as nearly as may reasonably be, with respect to any shares, other securities or property to which a Registered Warrantholder is entitled on the exercise of its acquisition rights thereafter. Any indenture entered into between the Corporation and the Warrant Agent pursuant to the provisions of this Section 4.1(d) shall be a supplemental indenture entered into pursuant to the provisions of Article 8 hereof. Any indenture entered into between the Corporation, any successor to the Corporation or such purchasing body corporate, partnership, trust or other entity and the Warrant Agent shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Section 4.1 and which shall apply to successive reclassifications, capital reorganizations, amalgamations, consolidations, mergers, sales or conveyances; |
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(e) | in any case in which this Section 4.1 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Corporation may defer, until the occurrence of such event, issuing to the Registered Warrantholder of any Warrant exercised after the record date and prior to completion of such event the additional Common Shares issuable by reason of the adjustment required by such event before giving effect to such adjustment; provided, however, that the Corporation shall deliver to such Registered Warrantholder an appropriate instrument evidencing such Registered Warrantholder’s right to receive such additional Common Shares upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Common Shares declared in favour of holders of record of Common Shares on and after the relevant date of exercise or such later date as such Registered Warrantholder would, but for the provisions of this Section 4.1(e), have become the holder of record of such additional Common Shares pursuant to Section 4.1; |
(f) | in any case in which Section 4.1(a)(iii), Section 4.1(b) or Section 4.1(c) require that an adjustment be made to the Exercise Price, no such adjustment shall be made if the Registered Warrantholders of the outstanding Warrants receive, subject to any required stock exchange or regulatory approval, the rights or warrants referred to in Section 4.1(a)(iii), Section 4.1(b) or the shares, rights, options, warrants, evidences of indebtedness or assets referred to in Section 4.1(c), as the case may be, in such kind and number as they would have received if they had been holders of Common Shares on the applicable record date or effective date, as the case may be, by virtue of their outstanding Warrant having then been exercised into Common Shares at the Exercise Price in effect on the applicable record date or effective date, as the case may be; |
(g) | the adjustments provided for in this Section 4.1 are cumulative, and shall, in the case of adjustments to the Exercise Price be computed to the nearest whole cent and shall apply to successive subdivisions, re-divisions, reductions, combinations, consolidations, distributions, issues or other events resulting in any adjustment under the provisions of this Section 4.1, provided that, notwithstanding any other provision of this Section, no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price then in effect; provided, however, that any adjustments which by reason of this Section 4.1(g) are not required to be made shall be carried forward and taken into account in any subsequent adjustment; and |
(h) | after any adjustment pursuant to this Section 4.1, the term “Common Shares” where used in this Indenture shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section 4.1, the Registered Warrantholder is entitled to receive upon the exercise of his Warrant, and the number of Common Shares indicated by any exercise made pursuant to a Warrant shall be interpreted to mean the number of Common Shares or other property or securities a Registered Warrantholder is entitled to receive, as a result of such adjustment and all prior adjustments pursuant to this Section 4.1, upon the full exercise of a Warrant. |
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Section 4.2 | Entitlement to Common Shares on Exercise of Warrant. |
All Common Shares or shares of any class or other securities, which a Registered Warrantholder is at the time in question entitled to receive on the exercise of its Warrant, whether or not as a result of adjustments made pursuant to this Article 4, shall, for the purposes of the interpretation of this Indenture, be deemed to be Common Shares which such Registered Warrantholder is entitled to acquire pursuant to such Warrant.
Section 4.3 | No Adjustment for Certain Transactions. |
Notwithstanding anything in this Article 4, no adjustment shall be made in the acquisition rights attached to the Warrants if the issue of Common Shares is being made pursuant to this Indenture or in connection with (a) any share incentive plan or restricted share plan or share purchase plan in force from time to time for directors, officers, employees, consultants or other service providers of the Corporation; or (b) the satisfaction of existing instruments issued at the date hereof.
Section 4.4 | Determination by Independent Firm. |
In the event of any question arising with respect to the adjustments provided for in this Article 4 such question shall be conclusively determined by an independent firm of chartered public accountants other than the Auditors, who shall have access to all necessary records of the Corporation, and such determination shall be binding upon the Corporation, the Warrant Agent, all holders and all other persons interested therein.
Section 4.5 | Proceedings Prior to any Action Requiring Adjustment. |
As a condition precedent to the taking of any action which would require an adjustment in any of the acquisition rights pursuant to any of the Warrants, including the number of Common Shares which are to be received upon the exercise thereof, the Corporation shall take any action which may, in the opinion of Counsel, be necessary in order that the Corporation has unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the Common Shares which the holders of such Warrants are entitled to receive on the full exercise thereof in accordance with the provisions hereof.
Section 4.6 | Certificate of Adjustment. |
The Corporation shall from time to time immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 4.1, deliver a certificate of the Corporation to the Warrant Agent specifying the nature of the event requiring the same and the amount of the adjustment or readjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate shall be supported by a certificate of the Corporation’s Auditors verifying such calculation. The Warrant Agent shall rely, and shall be protected in so doing, upon the certificate of the Corporation or of the Corporation’s Auditor and any other document filed by the Corporation pursuant to this Article 4 for all purposes.
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Section 4.7 | Notice of Special Matters. |
The Corporation covenants with the Warrant Agent that, so long as any Warrant remains outstanding, it will give notice to the Warrant Agent and to the Registered Warrantholders of its intention to fix a record date that is prior to the Expiry Date for any matter for which an adjustment may be required pursuant to Section 4.1 Such notice shall specify the particulars of such event and the record date for such event, provided that the Corporation shall only be required to specify in the notice such particulars of the event as shall have been fixed and determined on the date on which the notice is given. The notice shall be given in each case not less than 14 days prior to such applicable record date. If notice has been given and the adjustment is not then determinable, the Corporation shall promptly, after the adjustment is determinable, file with the Warrant Agent a computation of the adjustment and give notice to the Registered Warrantholders of such adjustment computation.
Section 4.8 | No Action after Notice. |
The Corporation covenants with the Warrant Agent that it will not close its transfer books or take any other corporate action which might deprive the Registered Warrantholder of the opportunity to exercise its right of acquisition pursuant thereto during the period of 14 days after the giving of the certificate or notices set forth in Section 4.6 and Section 4.7.
Section 4.9 | Other Action. |
If the Corporation, after the date hereof, shall take any action affecting the Common Shares other than action described in Section 4.1, which in the reasonable opinion of the directors of the Corporation would materially affect the rights of Registered Warrantholders, the Exercise Price and/or Exchange Rate, the number of Common Shares which may be acquired upon exercise of the Warrants shall be adjusted in such manner and at such time, by action of the directors, acting reasonably and in good faith, in their sole discretion as they may determine to be equitable to the Registered Warrantholders in the circumstances, provided that no such adjustment will be made unless any requisite prior approval of any stock exchange on which the Common Shares are listed for trading has been obtained.
Section 4.10 | Protection of Warrant Agent. |
The Warrant Agent shall not:
(a) | at any time be under any duty or responsibility to any Registered Warrantholder to determine whether any facts exist which may require any adjustment contemplated by Section 4.1, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same; |
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(b) | be accountable with respect to the validity or value (or the kind or amount) of any Common Shares or of any other securities or property which may at any time be issued or delivered upon the exercise of the rights attaching to any Warrant; |
(c) | be responsible for any failure of the Corporation to issue, transfer or deliver Common Shares or certificates for the same upon the surrender of any Warrants for the purpose of the exercise of such rights or to comply with any of the covenants contained in this Article; and |
(d) | incur any liability or be in any way responsible for the consequences of any breach on the part of the Corporation of any of the representations, warranties or covenants herein contained or of any acts of the directors, officers, employees, agents or servants of the Corporation. |
Section 4.11 | Participation by Warrantholder. |
No adjustments shall be made pursuant to this Article 4 if the Registered Warrantholders are entitled to participate in any event described in this Article 4 on the same terms, mutatis mutandis, as if the Registered Warrantholders had exercised their Warrants prior to, or on the effective date or record date of, such event.
Article
5
RIGHTS OF THE CORPORATION AND COVENANTS
Section 5.1 | Optional Purchases by the Corporation. |
Subject to compliance with applicable securities legislation and approval of applicable regulatory authorities, if any, the Corporation may from time to time purchase by private contract or otherwise any of the Warrants. Any such purchase shall be made at the lowest price or prices at which, in the opinion of the directors of the Corporation, such Warrants are then obtainable, plus reasonable costs of purchase, and may be made in such manner, from such persons and on such other terms as the Corporation, in its sole discretion, may determine. In the case of Warrant Certificates, Warrant Certificates representing the Warrants purchased pursuant to this Section 5.1 shall forthwith be delivered to and cancelled by the Warrant Agent and reflected accordingly on the register of Warrants. In the case of Uncertificated Warrants, the Warrants purchased pursuant to this Section 5.1 shall be reflected accordingly on the register of Warrants and in accordance with procedures prescribed by the Depository under the book entry registration system. No Warrants shall be issued in replacement thereof.
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Section 5.2 | General Covenants. |
The Corporation covenants with the Warrant Agent that so long as any Warrants remain outstanding:
(a) | it will reserve and keep available a sufficient number of Common Shares for the purpose of enabling it to satisfy its obligations to issue Common Shares upon the exercise of the Warrants; |
(b) | it will cause the Common Shares from time to time acquired pursuant to the exercise of the Warrants to be duly issued and delivered in accordance with the Warrants and the terms hereof; |
(c) | all Common Shares which shall be issued upon exercise of the right to acquire provided for herein shall be fully paid and non-assessable, free and clear of all encumbrances; |
(d) | it will use its best efforts to maintain its existence and carry on its business in the ordinary course; |
(e) | it will use its best efforts to ensure that all Common Shares outstanding or issuable from time to time (including without limitation the Common Shares issuable on the exercise of the Warrants) continue to be or are listed and posted for trading on the TSX (or such other Canadian stock exchange acceptable to the Corporation), provided that this clause shall not be construed as limiting or restricting the Corporation from completing a consolidation, amalgamation, arrangement, takeover bid or merger that would result in the Common Shares ceasing to be listed and posted for trading on the TSX, so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada, or cash, or the holders of the Common shares have approved the transaction in accordance with the requirements of applicable corporate and securities laws and the policies of the TSX; |
(f) | it will make all requisite filings under applicable Canadian securities legislation including those necessary to remain a reporting issuer not in default in each of the provinces and other Canadian jurisdictions where it is or becomes a reporting issuer; |
(g) | the Corporation shall give written notice to the Warrant Agent forthwith, in accordance with the provisions set out in Article 10, when a Registration Statement has been declared effective. Until such written notice is given to the Warrant Agent, the Warrant Agent shall assume no Registration Statement has been declared effective. If at any time a Registration Statement that is declared effective as notified by the Corporation ceases to be effective, it will give notice to the Warrant Agent forthwith and will give notice, in accordance with the provisions set out in Article 10 and the Warrant Agent shall assume such Registration Statement is effective until such written notice is given to the Warrant Agent. |
(h) | it will use commercially reasonable efforts to maintain the Registration Statement continuously effective under the U.S. Securities Act until the Expiry Date or exercise of all Warrants; |
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(i) | generally, it will well and truly perform and carry out all of the acts or things to be done by it as provided in this Indenture; and |
(j) | The Corporation will promptly notify the Warrant Agent and the Warrantholders in writing of any default under the terms of this Warrant Indenture which remains unrectified for more than five days following its occurrence. |
Section 5.3 | Warrant Agent’s Remuneration and Expenses. |
The Corporation covenants that it will pay to the Warrant Agent from time to time reasonable remuneration for its services hereunder and will pay or reimburse the Warrant Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Warrant Agent in the administration or execution of its duties hereby created (including the reasonable compensation and the disbursements of its Counsel and all other advisers and assistants not regularly in its employ) both before any default hereunder and thereafter until all duties of the Warrant Agent hereunder shall be finally and fully performed. Any amount owing hereunder and remaining unpaid after 30 days from the invoice date will bear interest at the then current rate charged by the Warrant Agent against unpaid invoices and shall be payable upon demand. This Section shall survive the resignation or removal of the Warrant Agent and/or the termination of this Indenture.
Section 5.4 | Performance of Covenants by Warrant Agent. |
If the Corporation shall fail to perform any of its covenants contained in this Indenture, the Warrant Agent may notify the Registered Warrantholders of such failure on the part of the Corporation and may itself perform any of the covenants capable of being performed by it but, subject to Section 9.2, shall be under no obligation to perform said covenants or to notify the Registered Warrantholders of such performance by it. All sums expended or advanced by the Warrant Agent in so doing shall be repayable as provided in Section 5.3. No such performance, expenditure or advance by the Warrant Agent shall relieve the Corporation of any default hereunder or of its continuing obligations under the covenants herein contained.
Section 5.5 | Enforceability of Warrants. |
The Corporation covenants and agrees that it is duly authorized to create and issue the Warrants to be issued hereunder and that the Warrants, when issued and Authenticated as herein provided, will be valid and enforceable against the Corporation in accordance with the provisions hereof and the terms hereof and that, subject to the provisions of this Indenture, the Corporation will cause the Common Shares from time to time acquired upon exercise of Warrants issued under this Indenture to be duly issued and delivered in accordance with the terms of this Indenture.
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Article
6
ENFORCEMENT
Section 6.1 | Suits by Registered Warrantholders. |
All or any of the rights conferred upon any Registered Warrantholder by any of the terms of this Indenture may be enforced by the Registered Warrantholder by appropriate proceedings but without prejudice to the right which is hereby conferred upon the Warrant Agent to proceed in its own name to enforce each and all of the provisions herein contained for the benefit of the Registered Warrantholders.
Section 6.2 | Suits by the Corporation. |
The Corporation shall have the right to enforce full payment of the Exercise Price of all Common Shares issued by the Warrant Agent to a Registered Warrantholder hereunder and shall be entitled to demand such payment from the Registered Warrantholder or alternatively to instruct the Warrant Agent to cancel the share certificates representing such Common Shares and amend the securities register of the Corporation accordingly.
Section 6.3 | Immunity of Shareholders, etc. |
The Warrant Agent and the Warrantholders hereby waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any incorporator or any past, present or future shareholder, trustee, employee or agent of the Corporation or any successor entity on any covenant, agreement, representation or warranty by the Corporation herein.
Section 6.4 | Waiver of Default. |
Upon the happening of any default hereunder:
(a) | the Registered Warrantholders of not less than 51% of the Warrants then outstanding shall have power (in addition to the powers exercisable by Extraordinary Resolution) by requisition in writing to instruct the Warrant Agent to waive any default hereunder and the Warrant Agent shall thereupon waive the default upon such terms and conditions as shall be prescribed in such requisition; or |
(b) | the Warrant Agent shall have power to waive any default hereunder upon such terms and conditions as the Warrant Agent may deem advisable, on the advice of Counsel, if, in the Warrant Agent’s opinion, based on the advice of Counsel, the same shall have been cured or adequate provision made therefor; |
provided that no delay or omission of the Warrant Agent or of the Registered Warrantholders to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein and provided further that no act or omission either of the Warrant Agent or of the Registered Warrantholders in the premises shall extend to or be taken in any manner whatsoever to affect any subsequent default hereunder of the rights resulting therefrom.
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Article
7
MEETINGS OF REGISTERED WARRANTHOLDERS
Section 7.1 | Right to Convene Meetings. |
The Warrant Agent may at any time and from time to time, and shall on receipt of a written request of the Corporation or of a Warrantholders’ Request and upon being indemnified and funded to its reasonable satisfaction by the Corporation or by the Registered Warrantholders signing such Warrantholders’ Request against the costs which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Registered Warrantholders. If the Warrant Agent fails to so call a meeting within seven days after receipt of such written request of the Corporation or such Warrantholders’ Request and the indemnity and funding given as aforesaid, the Corporation or such Registered Warrantholders, as the case may be, may convene such meeting. Every such meeting shall be held in the City of Vancouver or at such other place as may be approved or determined by the Warrant Agent.
Section 7.2 | Notice. |
At least 21 days’ prior written notice of any meeting of Registered Warrantholders shall be given to the Registered Warrantholders in the manner provided for in Section 10.2 and a copy of such notice shall be sent by mail to the Warrant Agent (unless the meeting has been called by the Warrant Agent) and to the Corporation (unless the meeting has been called by the Corporation). Such notice shall state the time when and the place where the meeting is to be held, shall state briefly the general nature of the business to be transacted thereat and shall contain such information as is reasonably necessary to enable the Registered Warrantholders to make a reasoned decision on the matter, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions of this Section 7.2.
Section 7.3 | Chairman. |
An individual (who need not be a Registered Warrantholder) designated in writing by the Warrant Agent shall be chairman of the meeting and if no individual is so designated, or if the individual so designated is not present within fifteen minutes from the time fixed for the holding of the meeting, the Registered Warrantholders present in person or by proxy shall choose an individual present to be chairman.
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Section 7.4 | Quorum. |
Subject to the provisions of Section 7.11, at any meeting of the Registered Warrantholders a quorum shall consist of Registered Warrantholder(s) present in person or by proxy and entitled to purchase at least 50% of the aggregate number of Common Shares which may be acquired pursuant to all the then outstanding Warrants. If a quorum of the Registered Warrantholders shall not be present within thirty minutes from the time fixed for holding any meeting, the meeting, if summoned by Registered Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day, in which case it shall be adjourned to the next following Business Day) at the same time and place and no notice of the adjournment need be given. Any business may be brought before or dealt with at an adjourned meeting which might have been dealt with at the original meeting in accordance with the notice calling the same. No business shall be transacted at any meeting unless a quorum be present at the commencement of business. At the adjourned meeting the Registered Warrantholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened, notwithstanding that they may not be entitled to acquire at least 50% of the aggregate number of Common Shares which may be acquired pursuant to all then outstanding Warrants.
Section 7.5 | Power to Adjourn. |
The chairman of any meeting at which a quorum of the Registered Warrantholders is present may, with the consent of the meeting, adjourn any such meeting, and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.
Section 7.6 | Show of Hands. |
Every question submitted to a meeting shall be decided in the first place by a majority of the votes given on a show of hands except that votes on an Extraordinary Resolution shall be given in the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact.
Section 7.7 | Poll and Voting. |
(1) | On every Extraordinary Resolution, and on any other question submitted to a meeting and after a vote by show of hands when demanded by the chairman or by one or more of the Registered Warrantholders acting in person or by proxy and entitled to acquire in the aggregate at least 5% of the aggregate number of Common Shares which may be acquired pursuant to all the Warrants then outstanding, a poll shall be taken in such manner as the chairman shall direct. Questions other than those required to be determined by Extraordinary Resolution shall be decided by a majority of the votes cast on the poll. |
(2) | On a show of hands, every person who is present and entitled to vote, whether as a Registered Warrantholder or as proxy for one or more absent Registered Warrantholders, or both, shall have one vote. On a poll, each Registered Warrantholder present in person or represented by a proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each Warrant then held or represented by it. A proxy need not be a Registered Warrantholder. The chairman of any meeting shall be entitled, both on a show of hands and on a poll, to vote in respect of the Warrants, if any, held or represented by him. |
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Section 7.8 | Regulations. |
(1) | The Warrant Agent, or the Corporation with the approval of the Warrant Agent, may from time to time make and from time to time vary such regulations as it shall think fit for the setting of the record date for a meeting for the purpose of determining Registered Warrantholders entitled to receive notice of and to vote at the meeting. |
(2) | Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons who shall be recognized at any meeting as a Registered Warrantholder, or be entitled to vote or be present at the meeting in respect thereof (subject to Section 7.9), shall be Registered Warrantholders or proxies of Registered Warrantholders. |
Section 7.9 | Corporation and Warrant Agent May be Represented. |
The Corporation and the Warrant Agent, by their respective directors, officers, agents, and employees and the Counsel for the Corporation and for the Warrant Agent may attend any meeting of the Registered Warrantholders.
Section 7.10 | Powers Exercisable by Extraordinary Resolution. |
In addition to all other powers conferred upon them by any other provisions of this Indenture or by law, the Registered Warrantholders at a meeting shall, subject to the provisions of Section 7.11, have the power exercisable from time to time by Extraordinary Resolution:
(a) | to agree to any modification, abrogation, alteration, compromise or arrangement of the rights of Registered Warrantholders or the Warrant Agent in its capacity as warrant agent hereunder (subject to the Warrant Agent’s prior consent, acting reasonably) or on behalf of the Registered Warrantholders against the Corporation whether such rights arise under this Indenture or otherwise; |
(b) | to amend, alter or repeal any Extraordinary Resolution previously passed or sanctioned by the Registered Warrantholders; |
(c) | to direct or to authorize the Warrant Agent, subject to Section 9.2(2) hereof, to enforce any of the covenants on the part of the Corporation contained in this Indenture or to enforce any of the rights of the Registered Warrantholders in any manner specified in such Extraordinary Resolution or to refrain from enforcing any such covenant or right; |
(d) | to waive, and to direct the Warrant Agent to waive, any default on the part of the Corporation in complying with any provisions of this Indenture either unconditionally or upon any conditions specified in such Extraordinary Resolution; |
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(e) | to restrain any Registered Warrantholder from taking or instituting any suit, action or proceeding against the Corporation for the enforcement of any of the covenants on the part of the Corporation in this Indenture or to enforce any of the rights of the Registered Warrantholders; |
(f) | to direct any Registered Warrantholder who, as such, has brought any suit, action or proceeding to stay or to discontinue or otherwise to deal with the same upon payment of the costs, charges and expenses reasonably and properly incurred by such Registered Warrantholder in connection therewith; |
(g) | to assent to any change in or omission from the provisions contained in this Indenture or any ancillary or supplemental instrument which may be agreed to by the Corporation, and to authorize the Warrant Agent to concur in and execute any ancillary or supplemental indenture embodying the change or omission; |
(h) | with the consent of the Corporation, such consent not to be unreasonably withheld, to remove the Warrant Agent or its successor in office and to appoint a new warrant agent or warrant agents to take the place of the Warrant Agent so removed; and |
(i) | to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation. |
Section 7.11 | Meaning of Extraordinary Resolution. |
(1) | The expression “Extraordinary Resolution” when used in this Indenture means, subject as hereinafter provided in this Section 7.11 and in Section 7.14, a resolution proposed at a meeting of Registered Warrantholders duly convened for that purpose and held in accordance with the provisions of this Article 7 at which there are present in person or by proxy Registered Warrantholders holding at least 25% of the aggregate number of Common Shares that may be acquired on exercise of the Warrants and passed by the affirmative votes of Registered Warrantholders holding not less than 66 2/3% of the aggregate number of Common Shares that may be acquired on exercise of the Warrants at the meeting and voted on the poll upon such resolution. |
(2) | If, at the meeting at which an Extraordinary Resolution is to be considered, Registered Warrantholders holding at least 25% of the aggregate number of Common Shares that may be acquired are not present in person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by Registered Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case it shall stand adjourned to such day, being not less than 15 or more than 60 days later, and to such place and time as may be appointed by the chairman. Not less than 14 days’ prior notice shall be given of the time and place of such adjourned meeting in the manner provided for in Section 10.2. Such notice shall state that at the adjourned meeting the Registered Warrantholders present in person or by proxy shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars. At the adjourned meeting the Registered Warrantholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed by the requisite vote as provided in Section 7.11(1) shall be an Extraordinary Resolution within the meaning of this Indenture notwithstanding that Registered Warrantholders entitled to acquire at least 25% of the aggregate number of Common Shares which may be acquired pursuant to all the then outstanding Warrants are not present in person or by proxy at such adjourned meeting. |
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(3) | Subject to Section 7.14, votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary. |
Section 7.12 | Powers Cumulative. |
Any one or more of the powers or any combination of the powers in this Indenture stated to be exercisable by the Registered Warrantholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the Registered Warrantholders to exercise such power or powers or combination of powers then or thereafter from time to time.
Section 7.13 | Minutes. |
Minutes of all resolutions and proceedings at every meeting of Registered Warrantholders shall be made and duly recorded in the books to be provided from time to time for that purpose by the Warrant Agent at the expense of the Corporation, and any such minutes as aforesaid, if signed by the chairman or the secretary of the meeting at which such resolutions were passed or proceedings had shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes shall have been made shall be deemed to have been duly convened and held, and all resolutions passed thereat or proceedings taken shall be deemed to have been duly passed and taken.
Section 7.14 | Instruments in Writing. |
All actions which may be taken and all powers that may be exercised by the Registered Warrantholders at a meeting held as provided in this Article 7 may also be taken and exercised by Registered Warrantholders holding at least 66 2/3% of the aggregate number of the then outstanding Warrants by an instrument in writing signed in one or more counterparts by such Registered Warrantholders in person or by attorney duly appointed in writing, and the expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so signed.
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Section 7.15 | Binding Effect of Resolutions. |
Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article 7 at a meeting of Registered Warrantholders shall be binding upon all the Warrantholders, whether present at or absent from such meeting, and every instrument in writing signed by Registered Warrantholders in accordance with Section 7.14 shall be binding upon all the Warrantholders, whether signatories thereto or not, and each and every Warrantholder and the Warrant Agent (subject to the provisions for indemnity herein contained) shall be bound to give effect accordingly to every such resolution and instrument in writing.
Section 7.16 | Holdings by Corporation Disregarded. |
In determining whether Registered Warrantholders holding Warrants evidencing the entitlement to acquire the required number of Common Shares are present at a meeting of Registered Warrantholders for the purpose of determining a quorum or have concurred in any consent, waiver, Extraordinary Resolution, Warrantholders’ Request or other action under this Indenture, Warrants owned legally or beneficially by the Corporation shall be disregarded in accordance with the provisions of Section 10.7.
Article
8
SUPPLEMENTAL INDENTURES
Section 8.1 | Provision for Supplemental Indentures for Certain Purposes. |
From time to time, the Corporation (when authorized by action of the directors of the Corporation) and the Warrant Agent may, subject to the provisions hereof and subject to the prior approval of the TSX, as need be, and they shall, when so directed in accordance with the provisions hereof, execute and deliver by their proper officers, indentures or instruments supplemental hereto, which thereafter shall form part hereof, for any one or more or all of the following purposes:
(a) | setting forth any adjustments resulting from the application of the provisions of Article 4; |
(b) | adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of Counsel, are necessary or advisable in the premises, provided that the same are not in the opinion of the Warrant Agent, relying on the advice of Counsel, prejudicial to the interests of the Registered Warrantholders; |
(c) | giving effect to any Extraordinary Resolution passed as provided in Section 7.11; |
(d) | making such provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder or for the purpose of obtaining a listing or quotation of the Warrants on any stock exchange or quotation system, provided that such provisions are not, in the opinion of the Warrant Agent, relying on the advice of Counsel, prejudicial to the interests of the Registered Warrantholders; |
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(e) | adding to or altering the provisions hereof in respect of the transfer of Warrants, making provision for the exchange of Warrants, and making any modification in the form of the Warrant Certificates which does not affect the substance thereof; |
(f) | modifying any of the provisions of this Indenture, including relieving the Corporation from any of the obligations, conditions or restrictions herein contained, provided that such modification or relief shall be or become operative or effective only if, in the opinion of the Warrant Agent, relying on the advice of Counsel, such modification or relief in no way prejudices any of the rights of the Registered Warrantholders or of the Warrant Agent, and provided further that the Warrant Agent may in its sole discretion decline to enter into any such supplemental indenture which in its opinion may not afford adequate protection to the Warrant Agent when the same shall become operative; |
(g) | providing for the issuance of additional Warrants hereunder, including Warrants in excess of the number set out in Section 2.1 and any consequential amendments hereto as may be required by the Warrant Agent relying on the advice of Counsel; and |
(h) | for any other purpose not inconsistent with the terms of this Indenture, including the correction or rectification of any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions herein, provided that in the opinion of the Warrant Agent, relying on the advice of Counsel, the rights of the Warrant Agent and of the Registered Warrantholders are in no way prejudiced thereby. |
Section 8.2 | Successor Entities. |
In the case of the consolidation, amalgamation, arrangement, merger or transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to or with another entity (“successor entity”), the successor entity resulting from such consolidation, amalgamation, arrangement, merger or transfer (if not the Corporation) shall expressly assume, by supplemental indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant Agent, the due and punctual performance and observance of each and every covenant and condition of this Indenture to be performed and observed by the Corporation.
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Article
9
CONCERNING THE WARRANT AGENT
Section 9.1 | Trust Indenture Legislation. |
(1) | If and to the extent that any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of Applicable Legislation, such mandatory requirement shall prevail. |
(2) | The Corporation and the Warrant Agent agree that each will, at all times in relation to this Indenture and any action to be taken hereunder, observe and comply with and be entitled to the benefits of Applicable Legislation. |
Section 9.2 | Rights and Duties of Warrant Agent. |
(1) | In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Warrant Agent shall exercise that degree of care, diligence and skill that a reasonably prudent warrant agent would exercise in comparable circumstances. No provision of this Indenture shall be construed to relieve the Warrant Agent from liability for its own gross negligent action, wilful misconduct, bad faith or fraud under this Indenture. |
(2) | The obligation of the Warrant Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Warrant Agent or the Registered Warrantholders hereunder shall be conditional upon the Registered Warrantholders furnishing, when required by notice by the Warrant Agent, sufficient funds to commence or to continue such act, action or proceeding and an indemnity reasonably satisfactory to the Warrant Agent to protect and to hold harmless the Warrant Agent and its officers, directors, employees and agents, against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof. None of the provisions contained in this Indenture shall require the Warrant Agent to expend or to risk its own funds or otherwise to incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers unless indemnified and funded as aforesaid. |
(3) | The Warrant Agent may, before commencing or at any time during the continuance of any such act, action or proceeding, require the Registered Warrantholders, at whose instance it is acting to deposit with the Warrant Agent the Warrants Certificates held by them, for which Warrants the Warrant Agent shall issue receipts. |
(4) | Every provision of this Indenture that by its terms relieves the Warrant Agent of liability or entitles it to rely upon any evidence submitted to it is subject to the provisions of Applicable Legislation. |
Section 9.3 | Evidence, Experts and Advisers. |
(1) | In addition to the reports, certificates, opinions and other evidence required by this Indenture, the Corporation shall furnish to the Warrant Agent such additional evidence of compliance with any provision hereof, and in such form, as may be prescribed by Applicable Legislation or as the Warrant Agent may reasonably require by written notice to the Corporation. |
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(2) | In the exercise of its rights and duties hereunder, the Warrant Agent may, if it is acting in good faith, rely as to the truth of the statements and the accuracy of the opinions expressed in statutory declarations, opinions, reports, written requests, consents, or orders of the Corporation, certificates of the Corporation or other evidence furnished to the Warrant Agent pursuant to a request of the Warrant Agent, provided that such evidence complies with Applicable Legislation and that the Warrant Agent complies with Applicable Legislation and that the Warrant Agent examines the same and determines that such evidence complies with the applicable requirements of this Indenture. |
(3) | Whenever it is provided in this Indenture or under Applicable Legislation that the Corporation shall deposit with the Warrant Agent resolutions, certificates, reports, opinions, requests, orders or other documents, it is intended that the truth, accuracy and good faith on the effective date thereof and the facts and opinions stated in all such documents so deposited shall, in each and every such case, be conditions precedent to the right of the Corporation to have the Warrant Agent take the action to be based thereon. |
(4) | The Warrant Agent may employ or retain such Counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of discharging its duties hereunder and may pay reasonable remuneration for all services so performed by any of them, without taxation of costs of any Counsel, and shall not be responsible for any misconduct or negligence on the part of any such experts or advisers who have been appointed with due care by the Warrant Agent. |
(5) | The Warrant Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any Counsel, accountant, appraiser, engineer or other expert or adviser, whether retained or employed by the Corporation or by the Warrant Agent, in relation to any matter arising in the administration of the agency hereof. |
Section 9.4 | Documents, Monies, etc. Held by Warrant Agent. |
(1) | Any monies, securities, documents of title or other instruments that may at any time be held by the Warrant Agent shall be placed in the deposit vaults of the Warrant Agent or of any Canadian chartered bank listed in Schedule I of the Bank Act (Canada), or deposited for safekeeping with any such bank. Any monies held pending the application or withdrawal thereof under any provisions of this Indenture, shall be held, invested and reinvested in “Permitted Investments” as directed in writing by the Corporation. “Permitted Investments” shall be treasury bills guaranteed by the Government of Canada having a term to maturity not to exceed ninety (90) days, or term deposits or bankers’ acceptances of a Canadian chartered bank having a term to maturity not to exceed ninety (90) days, or such other investments that is in accordance with the Warrant Agent’s standard type of investments. Unless otherwise specifically provided herein, all interest or other income received by the Warrant Agent in respect of such deposits and investments shall belong to the Corporation. |
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(2) | Any written direction for the investment or release of funds received shall be received by the Warrant Agent by 9:00a.m. (Vancouver time) on the Business Day on which such investment or release is to be made, failing which such direction will be handled on a commercially reasonable efforts basis and may result in funds being invested or released on the next Business Day. |
(3) | The Warrant Agent shall have no responsibility or liability for any diminution of any funds resulting from any investment made in accordance with this Indenture, including any losses on any investment liquidated prior to maturity in order to make a payment required hereunder. |
(4) | In the event that the Warrant Agent does not receive a direction or only a partial direction, the Warrant Agent may hold cash balances constituting part or all of such monies and may, but need not, invest same in its deposit department, the deposit department of one of its affiliates, or the deposit department of a Canadian chartered bank; but the Warrant Agent, its affiliates or a Canadian chartered bank shall not be liable to account for any profit to any parties to this Indenture or to any other person or entity. |
Section 9.5 | Actions by Warrant Agent to Protect Interest. |
The Warrant Agent shall have power to institute and to maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Registered Warrantholders.
Section 9.6 | Warrant Agent Not Required to Give Security. |
The Warrant Agent shall not be required to give any bond or security in respect of the execution of the agency and powers of this Indenture or otherwise in respect of the premises.
Section 9.7 | Protection of Warrant Agent. |
By way of supplement to the provisions of any law for the time being relating to the Warrant Agent it is expressly declared and agreed as follows:
(a) | the Warrant Agent shall not be liable for or by reason of any statements of fact or recitals in this Indenture or in the Warrant Certificates (except the representation contained in Section 9.9 or in the authentication of the Warrant Agent on the Warrant Certificates) or be required to verify the same, but all such statements or recitals are and shall be deemed to be made by the Corporation; |
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(b) | nothing herein contained shall impose any obligation on the Warrant Agent to see to or to require evidence of the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto; |
(c) | the Warrant Agent shall not be bound to give notice to any person or persons of the execution hereof; |
(d) | the Warrant Agent shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach on the part of the Corporation of any of its covenants herein contained or of any acts of any directors, officers, employees, agents or servants of the Corporation; |
(e) | the Corporation hereby indemnifies and agrees to hold harmless the Warrant Agent, its affiliates, their officers, directors, employees, agents, successors and assigns (the “Indemnified Parties”) from and against any and all liabilities whatsoever, losses, damages, penalties, claims, demands, actions, suits, proceedings, costs, charges, assessments, judgments, expenses and disbursements, including reasonable legal fees and disbursements of whatever kind and nature which may at any time be imposed on or incurred by or asserted against the Indemnified Parties, or any of them, whether at law or in equity, in any way caused by or arising, directly or indirectly, in respect of any act, deed, matter or thing whatsoever made, done, acquiesced in or omitted in or about or in relation to the execution of the Indemnified Parties’ duties, or any other services that Warrant Agent may provide in connection with or in any way relating to this Indenture. The Corporation agrees that its liability hereunder shall be absolute and unconditional regardless of the correctness of any representations of any third parties and regardless of any liability of third parties to the Indemnified Parties, and shall accrue and become enforceable without prior demand or any other precedent action or proceeding; provided that the Corporation shall not be required to indemnify the Indemnified Parties in the event of the gross negligence or wilful misconduct of the Warrant Agent, and this provision shall survive the resignation or removal of the Warrant Agent or the termination or discharge of this Indenture; and |
(f) | notwithstanding the foregoing or any other provision of this Indenture, any liability of the Warrant Agent shall be limited, in the aggregate, to the amount of annual retainer fees paid by the Corporation to the Warrant Agent under this Indenture in the twelve (12) months immediately prior to the Warrant Agent receiving the first notice of the claim. Notwithstanding any other provision of this Indenture, and whether such losses or damages are foreseeable or unforeseeable, the Warrant Agent shall not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages. |
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Section 9.8 | Replacement of Warrant Agent; Successor by Merger. |
(1) | The Warrant Agent may resign its agency and be discharged from all further duties and liabilities hereunder, subject to this Section 9.8, by giving to the Corporation not less than 60 days’ prior notice in writing or such shorter prior notice as the Corporation may accept as sufficient. The Registered Warrantholders by Extraordinary Resolution shall have power at any time to remove the existing Warrant Agent and to appoint a new warrant agent. In the event of the Warrant Agent resigning or being removed as aforesaid or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Corporation shall forthwith appoint a new warrant agent unless a new warrant agent has already been appointed by the Registered Warrantholders; failing such appointment by the Corporation, the retiring Warrant Agent or any Registered Warrantholder may apply to a judge of the Province of British Columbia on such notice as such judge may direct, for the appointment of a new warrant agent; but any new warrant agent so appointed by the Corporation or by the Court shall be subject to removal as aforesaid by the Registered Warrantholders. Any new warrant agent appointed under any provision of this Section 9.8 shall be an entity authorized to carry on the business of a trust company in the Province of British Columbia and, if required by the Applicable Legislation for any other provinces, in such other provinces. On any such appointment the new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Warrant Agent hereunder. |
(2) | Upon the appointment of a successor warrant agent, the Corporation shall promptly notify the Registered Warrantholders thereof in the manner provided for in Section 10.2. |
(3) | Any Warrant Certificates Authenticated but not delivered by a predecessor Warrant Agent may be Authenticated by the successor Warrant Agent in the name of the predecessor or successor Warrant Agent. |
(4) | Any corporation into which the Warrant Agent may be merged or consolidated or amalgamated, or any corporation resulting therefrom to which the Warrant Agent shall be a party, or any corporation succeeding to substantially the corporate trust business of the Warrant Agent shall be the successor to the Warrant Agent hereunder without any further act on its part or any of the parties hereto, provided that such corporation would be eligible for appointment as successor Warrant Agent under (1). |
Section 9.9 | Acceptance of Agency |
The Warrant Agent hereby accepts the agency in this Indenture declared and provided for and agrees to perform the same upon the terms and conditions herein set forth.
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Section 9.10 | Warrant Agent Not to be Appointed Receiver. |
The Warrant Agent and any person related to the Warrant Agent shall not be appointed a receiver, a receiver and manager or liquidator of all or any part of the assets or undertaking of the Corporation.
Section 9.11 | Warrant Agent Not Required to Give Notice of Default. |
The Warrant Agent shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required so to do under the terms hereof; nor shall the Warrant Agent be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Warrant Agent and in the absence of any such notice the Warrant Agent may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given to the Warrant Agent to determine whether or not the Warrant Agent shall take action with respect to any default.
Section 9.12 | Anti-Money Laundering. |
(1) | Each party to this Agreement other than the Warrant Agent hereby represents to the Warrant Agent that any account to be opened by, or interest to be held by the Warrant Agent in connection with this Indenture, for or to the credit of such party, either (i) is not intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a third party, in which case such party hereto agrees to complete and execute forthwith a declaration in the Warrant Agent’s prescribed form as to the particulars of such third party. |
(2) | The Warrant Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Warrant Agent, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering, anti-terrorist or economic sanctions legislation, regulation or guideline. Further, should the Warrant Agent, in its sole judgment, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering, anti-terrorist or economic sanctions legislation, regulation or guideline, then it shall have the right to resign on ten (10) days written notice to the other parties to this Indenture, provided (i) that the Warrant Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Warrant Agent’s satisfaction within such ten (10) day period, then such resignation shall not be effective. |
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Section 9.13 | Compliance with Privacy Code. |
(1) | The parties acknowledge that the Warrant Agent may, in the course of providing services hereunder, collect or receive financial and other personal information about such parties and/or their representatives, as individuals, or about other individuals related to the subject matter hereof, and use such information for the following purposes: |
(a) | to provide the services required under this Indenture and other services that may be requested from time to time; |
(b) | to help the Warrant Agent manage its servicing relationships with such individuals; |
(c) | to meet the Warrant Agent’s legal and regulatory requirements; and |
(d) | if Social Insurance Numbers are collected by the Warrant Agent, to perform tax reporting and to assist in verification of an individual’s identity for security purposes. |
(2) | Each party acknowledges and agrees that the Warrant Agent may receive, collect, use and disclose personal information provided to it or acquired by it in the course of its acting as agent hereunder for the purposes described above and, generally, in the manner and on the terms described in its Privacy Code, which the Warrant Agent shall make available on its website, www.computershare.com, or upon request, including revisions thereto. The Warrant Agent may transfer personal information to other companies in or outside of Canada that provide data processing and storage or other support in order to facilitate the services it provides. |
(3) | Further, each party agrees that it shall not provide or cause to be provided to the Warrant Agent any personal information relating to an individual who is not a party to this Indenture unless that party has assured itself that such individual understands and has consented to the aforementioned uses and disclosures. |
Section 9.14 | Securities Exchange Commission Certification. |
The Corporation confirms that it has either (i) a class of securities registered pursuant to Section 12 of the US Securities Exchange Act of 1934, as amended (the “Act”); or (ii) a reporting obligation pursuant to Section 15(d) of the Act, and has provided the Warrant Agent with an Officers’ Certificate (in a form provided by the Warrant Agent certifying such reporting obligation and other information as requested by the Warrant Agent. The Corporation covenants that in the event that any such registration or reporting obligation shall be terminated by the Corporation in accordance with the Act, the Corporation shall promptly notify the Warrant Agent of such termination and such other information as the Warrant Agent may require at the time. The Corporation acknowledges that the Warrant Agent is relying upon the foregoing representation and covenants in order to meet certain United States Securities and Exchange Commission (“SEC”) obligations with respect to those clients who are filing with the SEC.
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Article
10
GENERAL
Section 10.1 | Notice to the Corporation and the Warrant Agent. |
(1) | Unless herein otherwise expressly provided, any notice to be given hereunder to the Corporation or the Warrant Agent shall be deemed to be validly given if delivered, sent by registered letter, postage prepaid or if faxed or emailed: |
(a) | If to the Corporation: |
NioCorp Developments Ltd.
7000 South Yosemite Street, Suite 115
Centennial, CO
80112
Attn: John F. Ashburn, Jr.
Tel: (720) 639-4650
email: jashburn@niocorp.com
(b) | If to the Warrant Agent: |
Computershare
Trust Company of Canada
3rd Floor– 510 Burrard Street
Vancouver, BC V6C 3B9
Attention: | General Manager, Corporate Trust Email: Corporatetrust.vancouver@computershare.com |
and any such notice delivered in accordance with the foregoing shall be deemed to have been received and given on the date of delivery or, if mailed, on the fifth Business Day following the date of mailing such notice or, if faxed, on the next Business Day following the date of transmission.
(2) | The Corporation or the Warrant Agent, as the case may be, may from time to time notify the other in the manner provided in Section 10.1(1) of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Corporation or the Warrant Agent, as the case may be, for all purposes of this Indenture. |
(3) | If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Warrant Agent or to the Corporation hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered to the named officer of the party to which it is addressed, as provided in Section 10.1(1), or given by facsimile or other means of prepaid, transmitted and recorded communication. |
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Section 10.2 | Notice to Registered Warrantholders. |
(1) | Unless otherwise provided herein, notice to the Registered Warrantholders under the provisions of this Indenture shall be valid and effective if delivered or sent by ordinary prepaid post addressed to such holders at their post office addresses appearing on the register hereinbefore mentioned and shall be deemed to have been effectively received and given on the date of delivery or, if mailed, on the third Business Day following the date of mailing such notice. In the event that Warrants are held in the name of the Depository, a copy of such notice shall also be sent by electronic communication to the Depository and shall be deemed received and given on the day it is so sent. |
(2) | If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Registered Warrantholders hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered to such Registered Warrantholders to the address for such Registered Warrantholders contained in the register maintained by the Warrant Agent or such notice may be given, at the Corporation’s expense, by means of publication in the Globe and Mail, National Edition, or any other English language daily newspaper or newspapers of general circulation in Canada, in each two successive weeks, the first such notice to be published within 5 business days of such event, and any so notice published shall be deemed to have been received and given on the latest date the publication takes place. |
Section 10.3 | Ownership of Warrants. |
The Corporation and the Warrant Agent may deem and treat the Registered Warrantholders as the absolute owner thereof for all purposes, and the Corporation and the Warrant Agent shall not be affected by any notice or knowledge to the contrary except where the Corporation or the Warrant Agent is required to take notice by statute or by order of a court of competent jurisdiction. The receipt of any such Registered Warrantholder of the Common Shares which may be acquired pursuant thereto shall be a good discharge to the Corporation and the Warrant Agent for the same and neither the Corporation nor the Warrant Agent shall be bound to inquire into the title of any such holder except where the Corporation or the Warrant Agent is required to take notice by statute or by order of a court of competent jurisdiction.
Section 10.4 | Counterparts. |
This Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution they shall be deemed to be dated as of the date hereof. Delivery of an executed copy of the Indenture by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Indenture as of the date hereof.
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Section 10.5 | Satisfaction and Discharge of Indenture. |
Upon the earlier of:
(a) | the date by which there shall have been delivered to the Warrant Agent for exercise or cancellation all Warrants theretofore Authenticated hereunder, in the case of Warrant Certificates (or such other instructions, in a form satisfactory to the Warrant Agent), in the case of Uncertificated Warrants, or by way of standard processing through the book entry system in the case of a CDS Global Warrant; and |
(b) | the Expiry Time; |
and if all certificates or other entry on the register representing Common Shares required to be issued in compliance with the provisions hereof have been issued and delivered hereunder or to the Warrant Agent in accordance with such provisions, this Indenture shall cease to be of further effect and the Warrant Agent, on demand of and at the cost and expense of the Corporation and upon delivery to the Warrant Agent of a certificate of the Corporation stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture. Notwithstanding the foregoing, the indemnities provided to the Warrant Agent by the Corporation hereunder shall remain in full force and effect and survive the termination of this Indenture.
Section 10.6 | Provisions of Indenture and Warrants for the Sole Benefit of Parties and Registered Warrantholders. |
Nothing in this Indenture or in the Warrants, expressed or implied, shall give or be construed to give to any person other than the parties hereto and the Registered Warrantholders, as the case may be, any legal or equitable right, remedy or claim under this Indenture, or under any covenant or provision herein or therein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Registered Warrantholders.
Section 10.7 | Common Shares or Warrants Owned by the Corporation or its Subsidiaries - Certificate to be Provided. |
For the purpose of disregarding any Warrants owned legally or beneficially by the Corporation in Section 7.16, the Corporation shall provide to the Warrant Agent, from time to time, a certificate of the Corporation setting forth as at the date of such certificate:
(a) | the names (other than the name of the Corporation) of the Registered Warrantholders which, to the knowledge of the Corporation, are owned by or held for the account of the Corporation; and |
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(b) | the number of Warrants owned legally or beneficially by the Corporation; |
and the Warrant Agent, in making the computations shall be entitled to rely on such certificate without any additional evidence.
Section 10.8 | Severability |
If, in any jurisdiction, any provision of this Indenture or its application to any party or circumstance is restricted, prohibited or unenforceable, such provision will, as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition or unenforceability without invalidating the remaining provisions of this Indenture and without affecting the validity or enforceability of such provision in any other jurisdiction or without affecting its application to other parties or circumstances.
Section 10.9 | Force Majeure |
No party shall be liable to the other, or held in breach of this Indenture, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Indenture shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section.
Section 10.10 | Assignment, Successors and Assigns |
Neither of the parties hereto may assign its rights or interest under this Indenture, except as provided in Section 9.8 in the case of the Warrant Agent, or as provided in Section 8.2 in the case of the Corporation. Subject thereto, this Indenture shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
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Section 10.11 | Rights of Rescission and Withdrawal for Holders |
Should a holder of Warrants exercise any legal, statutory, contractual or other right of withdrawal or rescission that may be available to it, and the holder’s funds which were paid on exercise have already been released to the Corporation by the Warrant Agent, the Warrant Agent shall not be responsible for ensuring the exercise is cancelled and a refund is paid back to the holder. In such cases, the holder shall seek a refund directly from the Corporation and subsequently, the Corporation, upon surrender to the Corporation or the Warrant Agent of any underlying Common Shares or other securities that may have been issued, or such other procedure as agreed to by the parties hereto, shall instruct the Warrant Agent in writing, to cancel the exercise transaction and any such underlying Common Shares or other securities on the register, which may have already been issued upon the Warrant exercise. In the event that any payment is received from the Corporation by virtue of the holder being a shareholder for such Warrants that were subsequently rescinded, such payment must be returned to the Corporation by such holder. The Warrant Agent shall not be under any duty or obligation to take any steps to ensure or enforce the return of the funds pursuant to this section, nor shall the Warrant Agent be in any other way responsible in the event that any payment is not delivered or received pursuant to this section. Notwithstanding the foregoing, in the event that the Corporation provides the refund to the Warrant Agent for distribution to the holder, the Warrant Agent shall return such funds to the holder as soon as reasonably practicable, and in so doing, the Warrant Agent shall incur no liability with respect to the delivery or non-delivery of any such funds.
IN WITNESS WHEREOF the parties hereto have executed this Indenture under the hands of their proper officers in that behalf as of the date first written above.
NIOCORP DEVELOPMENTS LTD.
| ||
By: | /s/ Neal Shah | |
Name: Neal Shah | ||
Title: Chief Financial Officer | ||
By: | /s/ John F. Ashburn, Jr. | |
Name: John F. Ashburn, Jr. | ||
Title: Vice President, General Counsel and Corporate Secretary |
COMPUTERSHARE TRUST COMPANY OF CANADA | ||
By: | /s/ Nicole H. Clement | |
Name: Nicole H. Clement | ||
Title: General Manager | ||
By: | /s/ Ellis Amabel | |
Name: Ellis Amabel | ||
Title: Associate Trust Officer |
Warrant Indenture
A-1
Schedule “A”
Form of Warrant
THE WARRANTS EVIDENCED HEREBY ARE EXERCISABLE AT OR BEFORE 4:59 P.M. (VANCOUVER TIME) ON JULY 26, 2021, AFTER WHICH TIME THE WARRANTS EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE OR EFFECT.
For all Warrants include the following legend until such time as it is no longer required in accordance with applicable Canadian securities laws and Toronto Stock Exchange policies:
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE NOVEMBER 27, 2017.
(INSERT IF APPLICABLE) WITHOUT PRIOR APPROVAL OF THE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TORONTO STOCK EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL NOVEMBER 27, 2017.
For all Warrants sold outside the United States and registered in the name of the Depository, also include the following legend:
(INSERT IF BEING ISSUED TO CDS)UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO NIOCORP DEVELOPMENTS LTD. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.
A-2
For all Warrants, until such time as the Registration Statement is declared effective, also include the following legends:
THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COMPANY”), THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AND THE WARRANT AGENT AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY AND THE WARRANT AGENT TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.
A-3
WARRANT
To acquire Common Shares of
NIOCORP DEVELOPMENTS LTD.
(incorporated pursuant to the laws of the Province of British Columbia)
Warrant Certificate No. [*] |
Certificate for ______________________________ Warrants, each entitling the holder to acquire one (1) Common Share (subject to adjustment as provided for in the Warrant Indenture (as defined below) |
THIS IS TO CERTIFY THAT, for value received,
(the “Warrantholder”) is the registered holder of the number of common share purchase warrants (the “Warrants”) of NioCorp Developments Ltd. (the “Corporation”) specified above, and is entitled, on exercise of these Warrants upon and subject to the terms and conditions set forth herein and in the Warrant Indenture, to purchase at any time before 4:59 p.m. (Vancouver time) (the “Expiry Time”) on July 26, 2021 (the “Expiry Date”), one fully paid and non-assessable common share without par value in the capital of the Corporation as constituted on the date hereof (a “Common Share”) for each Warrant subject to adjustment in accordance with the terms of the Warrant Indenture.
The right to purchase Common Shares may only be exercised by the Warrantholder within the time set forth above by:
(a) | duly completing and executing the exercise form (the “Exercise Form”) attached hereto; and |
(b) | surrendering this warrant certificate (the “Warrant Certificate”), with the Exercise Form to the Warrant Agent at the principal office of the Warrant Agent, in the city of Vancouver, together with a certified cheque, bank draft or money order in the lawful money of Canada payable to or to the order of the Corporation in an amount equal to the purchase price of the Common Shares so subscribed for. |
The surrender of this Warrant Certificate, the duly completed Exercise Form and payment as provided above will be deemed to have been effected only on personal delivery thereof to, or if sent by mail or other means of transmission on actual receipt thereof by, the Warrant Agent at its principal office as set out above.
A-4
Subject to adjustment thereof in the events and in the manner set forth in the Warrant Indenture hereinafter referred to, the exercise price payable for each Common Share upon the exercise of Warrants shall be $0.79 per Common Share (the “Exercise Price”).
Certificates for the Common Shares subscribed for will be mailed to the persons specified in the Exercise Form at their respective addresses specified therein or, if so specified in the Exercise Form, delivered to such persons at the office where this Warrant Certificate is surrendered. If fewer Common Shares are purchased than the number that can be purchased pursuant to this Warrant Certificate, the holder hereof will be entitled to receive without charge a new Warrant Certificate in respect of the balance of the Common Shares not so purchased. No fractional Common Shares will be issued upon exercise of any Warrant.
This Warrant Certificate evidences Warrants of the Corporation issued or issuable under the provisions of a warrant indenture (which indenture together with all other instruments supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as of [*], 2017 between the Corporation and Computershare Trust Company of Canada, as Warrant Agent, to which Warrant Indenture reference is hereby made for particulars of the rights of the holders of Warrants, the Corporation and the Warrant Agent in respect thereof and the terms and conditions on which the Warrants are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of which the holder, by acceptance hereof, assents. The Corporation will furnish to the holder, on request and without charge, a copy of the Warrant Indenture.
On presentation at the principal office of the Warrant Agent as set out above, subject to the provisions of the Warrant Indenture and on compliance with the reasonable requirements of the Warrant Agent, one or more Warrant Certificates may be exchanged for one or more Warrant Certificates entitling the holder thereof to purchase in the aggregate an equal number of Common Shares as are purchasable under the Warrant Certificate(s) so exchanged.
Neither the Warrants nor the Common Shares issuable upon exercise hereof have not been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or U.S. state securities laws. Until such time as the Registration Statement is declared effective, other than by an original U.S. purchaser that purchased the Warrants directly from the Corporation, these Warrants may not be exercised in the United States or by or on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States unless this security and the Common Shares issuable upon exercise of this security have been registered under the U.S. Securities Act and the applicable state securities legislation or an exemption from such registration requirements is available.
The Warrant Indenture contains provisions for the adjustment of the Exercise Price payable for each Common Share upon the exercise of Warrants and the number of Common Shares issuable upon the exercise of Warrants in the events and in the manner set forth therein.
The Warrant Indenture also contains provisions making binding on all holders of Warrants outstanding thereunder resolutions passed at meetings of holders of Warrants held in accordance with the provisions of the Warrant Indenture and instruments in writing signed by Warrantholders of Warrants entitled to purchase a specific majority of the Common Shares that can be purchased pursuant to such Warrants.
A-5
The Warrants evidenced hereby shall not be exercised by, or for the account or benefit of, any person in the United States or any “U.S. person” (a “U.S. Person”) as defined in Rule 902(k) of Regulation S under the U.S. Securities Act during any time that no registration statement under the U.S. Securities Act registering the Common Shares issuable upon the exercise of the Warrants evidenced hereby is effective, unless an exemption from the registration requirements of the U.S. Securities Act is available and such holder provides evidence of the availability of such exemption satisfactory to the Corporation and the Warrant Agent. During such time and prior to the Expiry Time, any person holding such Warrants that is, or is acting for the account or benefit of, a person in the United States or a U.S. Person shall have the right to provide notice to the Corporation of their intent to exercise, at which time the Corporation shall, at its own discretion, permit such holder to exercise on a cashless basis such Warrant (provided that the Common Shares issued pursuant to such cashless exercise shall not be subject to any transfer restrictions in the United States or Canada) or redeem such Warrants in accordance with the terms of the Warrant Indenture.
Nothing contained in this Warrant Certificate, the Warrant Indenture or elsewhere shall be construed as conferring upon the holder hereof any right or interest whatsoever as a holder of Common Shares or any other right or interest except as herein and in the Warrant Indenture expressly provided. In the event of any discrepancy between anything contained in this Warrant Certificate and the terms and conditions of the Warrant Indenture, the terms and conditions of the Warrant Indenture shall govern.
Warrants may only be transferred in compliance with the conditions of the Warrant Indenture on the register to be kept by the Warrant Agent in Vancouver, or such other registrar as the Corporation, with the approval of the Warrant Agent, may appoint at such other place or places, if any, as may be designated, upon surrender of this Warrant Certificate to the Warrant Agent or other registrar accompanied by a written instrument of transfer in form and execution satisfactory to the Warrant Agent or other registrar and upon compliance with the conditions prescribed in the Warrant Indenture and with such reasonable requirements as the Warrant Agent or other registrar may prescribe and upon the transfer being duly noted thereon by the Warrant Agent or other registrar. Time is of the essence hereof.
This Warrant Certificate will not be valid for any purpose until it has been countersigned by or on behalf of the Warrant Agent from time to time under the Warrant Indenture.
The parties hereto have declared that they have required that these presents and all other documents related hereto be in the English language. Les parties aux présentes déclarent qu’elles ont exigé que la présente convention, de même que tous les documents s’y rapportant, soient rédigés en anglais.
A-6
IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be duly executed as of [*].
|
NIOCORP DEVELOPMENTS LTD. | ||||
By: | |||||
Authorized Signatory | |||||
Countersigned and Registered by: | |||||
COMPUTERSHARE TRUST COMPANY OF CANADA | |||||
By: | |||||
Authorized Signatory |
A-7
FORM OF TRANSFER
To: Computershare Trust Company of Canada
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to ______________________________________________________________________________
(print name and address) the Warrants represented by this Warrants Certificate and hereby irrevocable constitutes and appoints ____________________ as its attorney with full power of substitution to transfer the said securities on the appropriate register of the Warrant Agent.
In the case of a warrant certificate that contains a U.S. restrictive legend, the undersigned hereby represents, warrants and certifies that (one (only) of the following must be checked):
☐ | (A) the transfer is being made only to the Corporation; |
☐ | (B) the transfer is being made within the United States or to, or for the account or benefit of, U.S. Persons, in accordance with a transaction that does not require registration under the U.S. Securities Act or any applicable state securities laws and the undersigned has furnished to the Corporation and the Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent to such effect; or |
☐ | (C) Registration Statement with respect to the Warrants has been declared effective. |
In the case of a warrant certificate that does not contain a U.S. restrictive legend, if the proposed transfer is to, or for the account or benefit of a U.S. Person or to a person in the United States, the undersigned hereby represents, warrants and certifies that the transfer of the Warrants is being completed pursuant to an exemption from the registration requirements of the U.S. Securities Act and any applicable state securities laws, in which case the undersigned has furnished to the Corporation and the Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent to such effect.
☐ | If transfer is to a U.S. Person, check this box. |
A-8
DATED this ____ day of_________________, 20____.
SPACE FOR GUARANTEES OF SIGNATURES (BELOW) | ) | ||
) | |||
)
)
|
Signature of Transferor
| ||
) | |||
Guarantor’s Signature/Stamp
|
)
) |
Name of Transferor
|
REASON FOR TRANSFER – For US Residents only (where the individual(s) or corporation receiving the securities is a US resident). Please select only one (see instructions below).
☐ Gift | ☐ Estate | ☐ Private Sale | ☐ Other (or no change in ownership) |
Date of Event (Date of gift, death or sale): | Value per Warrant on the date of event: | |
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☐ CAD OR ☐ USD |
A-9
CERTAIN REQUIREMENTS RELATING TO TRANSFERS – READ CAREFULLY
The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. All securityholders or a legally authorized representative must sign this form. The signature(s) on this form must be guaranteed in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. Notarized or witnessed signatures are not acceptable as guaranteed signatures. As at the time of closing, you may choose one of the following methods (although subject to change in accordance with industry practice and standards):
● | Canada and the USA: A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE, MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “Medallion Guaranteed”, with the correct prefix covering the face value of the certificate. |
● | Canada: A Signature Guarantee obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust. The Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”, sign and print their full name and alpha numeric signing number. Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisse Populaires unless they are members of a Medallion Signature Guarantee Program. For corporate holders, corporate signing resolutions, including certificate of incumbency, are also required to accompany the transfer, unless there is a “Signature & Authority to Sign Guarantee” Stamp affixed to the transfer (as opposed to a “Signature Guaranteed” Stamp) obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust or a Medallion Signature Guarantee with the correct prefix covering the face value of the certificate. |
● | Outside North America: For holders located outside North America, present the certificates(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program. The corresponding affiliate will arrange for the signature to be over-guaranteed. |
OR
The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever. The signature(s) on this form must be guaranteed by an authorized officer of Royal Bank of Canada, Scotia Bank or TD Canada Trust whose sample signature(s) are on file with the transfer agent, or by a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE, MSP). Notarized or witnessed signatures are not acceptable as guaranteed signatures. The Guarantor must affix a stamp bearing the actual words: “SIGNATURE GUARANTEED”, “MEDALLION GUARANTEED” OR “SIGNATURE & AUTHORITY TO SIGN GUARANTEE”, all in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. For corporate holders, corporate signing resolutions, including certificate of incumbency, will also be required to accompany the transfer unless there is a “SIGNATURE & AUTHORITY TO SIGN GUARANTEE” Stamp affixed to the Form of Transfer obtained from an authorized officer of the Royal Bank of Canada, Scotia Bank or TD Canada Trust or a “MEDALLION GUARANTEED” Stamp affixed to the Form of Transfer, with the correct prefix covering the face value of the certificate.
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REASON FOR TRANSFER – FOR US RESIDENTS ONLY
Consistent with US IRS regulations, Computershare is required to request cost basis information from US securityholders. Please indicate the reason for requesting the transfer as well as the date of event relating to the reason. The event date is not the day in which the transfer is finalized, but rather the date of the event which led to the transfer request (i.e. date of gift, date of death of the securityholder, or the date the private sale took place).
A-11
NOTICE OF INTENT TO EXERCISE FORM
By providing this Notice of Intent to Exercise Form, the Warrantholder will be permitted, at the election of the Corporation, to either (i) undertake a cashless exercise of the Warrants or (ii) redeem the Warrants for cash, each pursuant to the conditions of the Warrant Indenture. Please review Section 3.11 of the Warrant Indenture for further information regarding this Notice of Intent to Exercise Form.
TO: NioCorp Developments Ltd. and Computershare Trust Company of Canada
The undersigned hereby provides notice to NioCorp Developments Ltd. (the “Corporation”) and Computershare Trust Company of Canada (the “Warrant Agency”) of the undersigned’s intent to exercise the right to acquire Common Shares of the Corporation (or such number of other securities or property to which such Warrants entitle the undersigned in lieu thereof or in addition thereto under the provisions of the Warrant Indenture and Section 3.11 thereof referred to in the accompanying Warrant Certificate).
Number of Warrants Exercised: ____________________
Any capitalized term in this Warrant Certificate that is not otherwise defined herein, shall have the meaning ascribed thereto in the Warrant Indenture.
If the Corporation selects a cashless exercise of the Warrants (as provided below), the Common Shares (or other securities or property) are to be issued as follows:
Name:
Address in full:
Social Security Number:
Number of Common Shares:
If the Corporation selects redemption of the Warrants (as provided below), the check in the amount of money as determined in the provisions of Section 3.11 of the Warrant Indenture is to be delivered to the following address:
Name:
Address in full:
Social Security Number:
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The undersigned Warrantholder represents, warrants, acknowledges and certifies as follows:
1. By completing this form and surrendering this form and the Warrant Certificate representing the Warrants to Computershare Trust Company of Canada at its principal office at Toronto, Ontario or Vancouver, British Columbia, the Warrantholder is providing notice to the Warrant Agency of its intent to exercise the Warrants at a time when there is no effective registration statement under the U.S. Securities Act registering the Common Shares issuable upon such exercise. Pursuant to the provisions of Section 3.11 of the Warrant Indenture, the Warrant Agency shall notify the Corporation of the Warrantholder’s intent to exercise.
2. The Warrantholder acknowledges that upon notice to the Corporation of the Warrantholder’s intent to exercise the Warrants, the Corporation shall elect, at its sole discretion, whether the exercise of the Warrants is to be by (i) a cashless exercise of the Warrants or (ii) a redemption of the Warrants for cash.
Once completed and executed, this Exercise Form must be mailed or delivered to Computershare Trust Company of Canada, c/o General Manager, Corporate Trust.
Dated this ______day of ________, 20______
Signature Guaranteed by a Canadian Schedule I Chartered Bank or an eligible guarantor institution with membership in an approved signature guarantee medallion program. | (Signature of Warrant holder) | |||
(Print Name) | ||||
(Print Address) | ||||
Instructions:
1. | If the Notice of Intent to Exercise Form indicates that, upon election of the Corporation for a cashless exercise, Common Shares are to be issued to a person or persons other than the registered holder of the Warrant Certificate, the registered holder must pay to the Warrant Agent all eligible transfer taxes or other government charges, if any, and the Form of Transfer must be duly executed and signature of such holder must be guaranteed in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer. |
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2. | If the Notice of Intent to Exercise Form is signed by a Warrant Agent, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a judiciary or representative capacity, the certificate must be accompanied by evidence of authority to sign satisfactory to the Warrant Agent and the Corporation. |
In the United States, signature guarantees must be executed by members of a “Medallion Signature Guarantee Program” only.
B-1
SCHEDULE “B”
EXERCISE FORM
TO: | NioCorp Developments Ltd. |
AND TO: | Computershare Trust Company of Canada |
3rd Floor, 510 Burrard Street | |
Vancouver, BC V6C 3B9 |
The undersigned holder of the Warrants evidenced by this Warrant Certificate hereby exercises the right to acquire ____________ (A) Common Shares of NioCorp Developments Ltd.
Exercise Price Payable: | |
((A) multiplied by $0.79, subject to adjustment) |
The undersigned hereby exercises the right of such holder to be issued, and hereby subscribes for, Common Shares that are issuable pursuant to the exercise of such Warrants on the terms specified in such Warrant Certificate and in the Warrant Indenture.
The undersigned hereby acknowledges that the undersigned is aware that the Common Shares received on exercise may be subject to restrictions on resale under applicable securities legislation.
Any capitalized term in this Warrant Certificate that is not otherwise defined herein, shall have the meaning ascribed thereto in the Warrant Indenture.
The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):
If the Registration Statement has not been declared effective:
☐ | (A) the undersigned holder at the time of exercise of the Warrants (i) is not in the United States, (ii) is not a U.S. Person , (iii) is not exercising the Warrants on behalf of or for the account or benefit of a U.S. Person or a person in the United States, (iv) did not execute or deliver this exercise form in the United States and (v) delivery of the underlying Common Shares will not be to an address in the United States, (vi) exercise of the Warrants is not being made pursuant to an offer made while the undersigned holder was in the United States (vii) has completed a Regulation S Certificate in substantially the form attached to the Warrant Indenture as Schedule “D”, or an opinion of counsel of recognised standing in form and substance reasonably satisfactory to the Corporation and the Warrant Agent that the exercise is exempt from the registration requirements of the U.S. Securities Act and that the issuance of shares is in compliance with the U.S. Securities Act; OR |
B-2
☐ | (B) the undersigned holder (a) is the original U.S. purchaser who purchased the Warrants pursuant to the Company’s Unit offering who delivered the Certificate of U.S. Purchaser attached to the subscription agreement in connection with its purchase of Units, (b) is exercising the Warrants for its own account or for the account of a disclosed principal that was named in the subscription agreement pursuant to which it purchased such Units, and (c) is, and such disclosed principal, if any, is an institutional “accredited investor” as defined in Rule 501(a)(1),(2),(3)or (7) of Regulation D under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) at the time of exercise of these Warrants and the representations and warranties of the holder made in the original subscription agreement including the Certificate of U.S. Purchaser remain true and correct as of the date of exercise of these Warrants; OR |
☐ | (C) if the undersigned holder is (i) a holder in the United States, (ii) a U.S. Person, (iii) a person exercising for the account or benefit of a U.S. Person, (iv) executing or delivering this exercise form in the United States or (v) requesting delivery of the underlying Common Shares in the United States, the undersigned holder has delivered to the Corporation and the Corporation’s transfer agent (a) a completed and executed U.S. Purchaser Letter in substantially the form attached to the Warrant Indenture as Schedule “D” or (b) an opinion of counsel (which will not be sufficient unless it is in form and substance reasonably satisfactory to the Corporation and Warrant Agent) or such other evidence reasonably satisfactory to the Corporation and Warrant Agent to the effect that with respect to the Common Shares to be delivered upon exercise of the Warrants, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration requirements is available. |
☐ | (D) Registration Statement with respect to the Warrants has been declared effective. |
It is understood that the Corporation and Computershare Trust Company of Canada may require evidence to verify the foregoing representations.
Notes: | (1) Certificates will not be registered or delivered to an address in the United States unless Box B or C above is checked. |
(2) If Box C above is checked, holders are encouraged to consult with the Corporation and the Warrant Agent in advance to determine that the legal opinion tendered in connection with the exercise will be satisfactory in form and substance to the Corporation and the Warrant Agent.
AT ANY TIME PRIOR TO EFFECTIVENESS OF THE REGISTRATION STATEMENT, ALL CERTIFICATES EVIDENCING COMMON SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANTS WILL BEAR THE LEGENDS SET FORTH IN SECTION 3.3(4) OF THE WARRANT INDENTURE. IF BOX D IS CHECKED, AFTER THE REGISTRATION STATEMENT IS DECLARED EFFECTIVE, COMMON SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANTS WILL NOT BEAR THE LEGENDS SET FORTH IN SECTION 3.3(4).
B-3
“United States” and “U.S. Person” are as defined in Rule 902 of Regulation S under the U.S. Securities Act.
The undersigned hereby irrevocably directs that the said Common Shares be issued, registered and delivered as follows:
Name(s) in Full and Social Insurance Number(s) (if applicable) |
Address(es) | Number of Common Shares | ||
Please print full name in which certificates representing the Common Shares are to be issued. If any Common Shares are to be issued to a person or persons other than the registered holder, the registered holder must pay to the Warrant Agent all eligible transfer taxes or other government charges, if any, and the Form of Transfer must be duly executed.
Once completed and executed, this Exercise Form must be mailed or delivered to Computershare Trust Company of Canada, c/o General Manager, Corporate Trust.
DATED this ____day of _____, 20__.
) | ||
) | ||
) | ||
Witness | ) |
(Signature of Warrantholder, to be the same as |
) | appears on the face of this Warrant Certificate) | |
) | ||
) | ||
Name of Registered Warrantholder |
☐ Please check if the certificates representing the Common Shares are to be delivered at the office where this Warrant Certificate is surrendered, failing which such certificates will be mailed to the address set out above. Certificates will be delivered or mailed as soon as practicable after the surrender of this Warrant Certificate to the Warrant Agent.
C-1
SCHEDULE “C”
FORM OF U.S. PURCHASER CERTIFICATION UPON EXERCISE OF WARRANTS
NioCorp Developments Ltd.
Attention: President and Chief Executive Officer
- and to -
Computershare Trust Company of Canada.
as Warrant Agent
Dear Sirs:
We are delivering this letter in connection with the purchase of common shares (the “Common Shares”) of NioCorp Developments Ltd., a corporation incorporated under the laws of the Province of British Columbia (the “Corporation”) upon the exercise of warrants of the Corporation (“Warrants”), issued under the warrant indenture dated as of July 26, 2017 between the Corporation and Computershare Trust Company of Canada.
We hereby confirm that:
(a) | we are an institutional “accredited investor” (satisfying one or more of the criteria set forth in Rule 501 (a)(1),(2),(3) or (7) of Regulation D under the United States Securities Act of 1933 (the “U.S. Securities Act”)) who is also a “Qualified Purchaser” (as defined in Section 2(a) (51) of, and related rules under, the United States Investment Company Act of 1940, as amended (the “1940 Act”)) ; |
(b) | we are purchasing the Common Shares for our own account; |
(c) | we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of purchasing the Common Shares; |
(d) | we are not acquiring the Common Shares with a view to distribution thereof or with any present intention of offering or selling any of the Common Shares, except (A) to the Corporation, (B) pursuant to an effective registration statement under the U.S. Securities Act or (C) inside the United States in accordance with Rule 144 under the U.S. Securities Act, if applicable, and in compliance with applicable state securities laws; |
(e) | we acknowledge that we have had access to such financial and other information as we deem necessary in connection with our decision to exercise the Warrants and purchase the Common Shares; and |
C-2
(f) | we acknowledge that we are not purchasing the Common Shares as a result of any general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising. |
We understand that the Common Shares are being offered in a transaction not involving any public offering within the United States within the meaning of the U.S. Securities Act and that the Common Shares have not been and will not be registered under the U.S. Securities Act. We further understand that any Common Shares acquired by us will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the fact that we will not offer, sell or otherwise transfer any of the Common Shares, directly or indirectly, unless (i) the sale is to the Corporation; (ii) the sale is made pursuant to an effective registration statement under the U.S. Securities Act; or (iii) the sale is made in the United States (A) pursuant to an exemption from registration under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in compliance with any applicable state securities laws or (B) pursuant to a transaction that does not require registration under the U.S. Securities Act or applicable state securities laws, and in the case of each of (A) and (B), the purchaser meets the definition of Qualified Purchaser and the seller has furnished to the Corporation an opinion to such effect from counsel of recognized standing reasonably satisfactory to the Corporation prior to such offer, sale or transfer.
We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete.
DATED this ____day of _____, 20__.
(Name of U.S. Purchaser) | ||
By: | ||
Name: [*] | ||
Title: [*] |
D-1
SCHEDULE D
FORM OF REGULATION S CERTIFICATION UPON EXERCISE OF WARRANTS
NIOCORP DEVELOPMENTS LTD.
Attention: President and Chief Executive Officer
- and to –
Computershare Trust Company of Canada.
as Warrant Agent
Dear Sirs:
We are delivering this letter in connection with the purchase of common shares (the “Common Shares”) of NIOCORP DEVELOPMENTS LTD., a corporation incorporated under the laws of the Province of British Columbia (the “Corporation”) upon the exercise of warrants of the Corporation (“Warrants”), issued under the warrant indenture dated as of July 26, 2017 between the Corporation and Computershare Trust Company of Canada.
We hereby confirm that:
(a) | the Common Shares have not been and will not be, prior to distribution, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and that the offer and sale of the Common Shares to us will be made in reliance upon an exclusion from the registration requirements of the U.S. Securities Act under Regulation S thereunder (“Regulation S”); |
(b) | we are purchasing the Common Shares for our own account or for the account of one or more persons for whom we are exercising sole investment discretion, (a “Disclosed Subscriber”), for investment purposes only and not with a view to resale or distribution in violation of applicable securities laws and, in particular, neither we nor any Disclosed Subscriber for whose account we are purchasing the Common Shares is an underwriter, agent, dealer or “Distributor” as defined in Rule 902(d) of Regulation S or has any intention to distribute either directly or indirectly any of the Common Shares in the United States or to, or for the account or benefit of, a U.S. person (as defined in Regulation S, a “U.S. Person”) or person in the United States; provided, however, that this paragraph shall not restrict us from selling or otherwise disposing of any of the Common Shares pursuant to registration thereof pursuant to the U.S. Securities Act and any applicable state securities laws or under an exemption from such registration requirements; |
D-2
(c) | we have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Common Shares and is able, without impairing its financial condition, to hold such Common Shares for an indefinite period of time and to bear the economic risks of, and withstand a complete loss of, such investment; |
(d) | neither we nor the Disclosed Subscriber, if any, is a U.S. Person; |
(e) | (A) The Subscriber and the Disclosed Subscriber, if any, are not resident in the United States and are not purchasing the Common Shares for the account or benefit of a U.S. Person or person in the United States, (B) the Common Shares were not offered to us or the Disclosed Subscriber, if any, in the United States and (C) at the time we submitted the Exercise Notice, we (or its authorized signatory) were outside the United States; |
(f) | the current structure of this transaction and all transactions and activities contemplated hereunder is not a scheme to avoid the registration requirements of the U.S. Securities Act; |
(g) | we did not receive the offer to purchase the Common Shares as a result of, nor will we engage in, any directed selling efforts (as defined in Regulation S); |
(h) | we agree not to engage in hedging transactions in the Common Shares except in compliance with the U.S. Securities Act; |
(i) | we agree that prior to the expiration of the one-year distribution compliance period set forth in Rule 903(b)(3) of Regulation S under the U.S. Securities Act with regard to the Common Shares, we will not offer, sell or transfer, directly or indirectly, any of the Common Shares except in accordance with the provisions of Regulation S, pursuant to registration under the U.S. Securities Act or pursuant to an available exemption from registration under the U.S. Securities Act; |
(j) | we understand and acknowledge that the Common Shares are “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and that if in the future we decide to offer, resell, pledge or otherwise transfer any of such securities, such securities may be offered, resold, pledged or otherwise transferred, directly or indirectly, only (a) to the Issuer; (b) pursuant to an effective registration statement under the U.S. Securities Act; (c) in accordance with Rule 144 under the U.S. Securities Act, if available, and, in each case, in compliance with any applicable securities laws of any state of the United States; or (d) pursuant to another exemption from the registration requirements under the U.S. Securities Act and any applicable securities laws of any state of the United States, after providing an opinion of counsel, of recognized standing, in form and substance reasonably satisfactory to the Issuer, to the effect that the proposed transfer may be effected without registration under the U.S. Securities Act; |
D-3
(k) | we acknowledge and agree that the Issuer is hereby bound by this Agreement and its agreements with its transfer agent to refuse to register any transfer of the Common Shares not made in accordance with Regulation S, pursuant to registration under the U.S. Securities Act or pursuant to an available exemption from registration under the U.S. Securities Act and in compliance with any applicable local laws and regulations; the Subscriber consents to the Corporation making a notation on its records or giving instructions to any transfer agent of the Common Shares in order to implement the restrictions on transfer set forth and described herein; |
(l) | the Subscriber acknowledges that upon the issuance of the Common Shares, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable state securities laws and regulations, the certificates representing the Common Shares, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form: |
“THE SECURITIES REPRESENTED HEREBY [For warrants Include: and the securities issuable upon exercise hereof] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. Securities Act”), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THESE securities, AGREES FOR THE BENEFIT OF NIOCORP DEVELOPMENTS LTD. (THE “COmpany”), THAT THESE securities MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, directly or indirectly ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN EACH CASE, THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY TO SUCH EFFECT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES ARE PROHIBITED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. THESE SECURITIES MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON CANADIAN STOCK EXCHANGES.”
D-4
if any of the Common Shares are being sold pursuant to clause (C) in the legend above, the legend may be removed by delivery to Computershare Investor Services Inc. of an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation, to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act;
(g) | the Subscriber acknowledges that the Warrants may not be exercised unless exemptions are available from the registration requirements of the 1933 Act and the securities laws of all applicable states of the United States, and the holder has furnished an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Issuer to such effect; provided that a holder of warrants (a “Warrantholder”) will not be required to deliver an opinion of counsel in connection with its due exercise of the Warrants that comprise part of the Units purchased pursuant to the offering, for its own account or for the account of the original beneficial purchaser, if any, at a time when the Warrantholder and such original beneficial purchaser, if any, are outside the United States, are not U.S. Persons and are not exercising on behalf of U.S. Persons or persons in the United States and its representations and warranties contained in this Regulation S Certificate attached hereto remain true and correct in respect to the exercise of the Warrants and the holder represents to the Issuer as such. |
(h) | Upon the original issuance of the Warrants and until such time as is no longer required under applicable requirements of the 1933 Act or applicable state securities laws, all certificates representing the Warrants and all certificates issued in exchange therefor or in substitution thereof, shall bear a legend substantially in the following form: |
“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THIS WARRANT MAY NOT BE EXERCISED UNLESS THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE.”
D-5
(m) | we acknowledge that the Corporation is not a “foreign issuer” as defined in Regulation S and therefore, pursuant to Rule 905 of Regulation S, the United States securities law legend set forth above may not be removed from certificates representing the Common Shares upon any resale made pursuant to Rule 903 or 904 of Regulation S; therefore the certificates representing the Common Shares which bear such legend may not constitute “good delivery” in settlement of transactions on stock exchanges; |
(n) | we understand that (i) the Corporation may be deemed to be an issuer that is, or that has been at any time previously, an issuer with no or nominal operations and no or nominal assets other than cash and cash equivalents (a “Shell Company”), (ii) if the Corporation is deemed to be, or to have been at any time previously, a Shell Company, Rule 144 under the U.S. Securities Act may not be available for resales of the Common Shares, and (iii) except as set forth in the Subscription Agreement, the Corporation is not obligated to make Rule 144 under the U.S. Securities Act available for resales of the Common Shares; |
(o) | we have been independently advised as to the applicable hold period and restrictions with respect to trading imposed in respect of the Common Shares by securities legislation in the jurisdiction in which we reside, and confirm that no representation has been made respecting the applicable hold periods for such Common Shares and is aware of the risks and other characteristics of the Common Shares and of the fact that we may not be able to resell any of the Common Shares except in accordance with applicable securities legislation and regulatory policy; and |
(p) | we understand and acknowledge that we are making the representations and warranties and agreements contained herein with the intent that the they may be relied upon by the Corporation, in determining its eligibility or (if applicable) the eligibility of others on whose behalf we are contracting hereunder to purchase the Common Shares. |
We acknowledge that you will rely upon our confirmations, acknowledgements and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate or complete.
The Issuer shall be entitled to rely on delivery of a facsimile or PDF copy of this Regulation S Certificate.
DATED this________ day of ________________, 2017.
(Name of Purchaser - please print) |
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by: | ||
(Official Capacity or Title – please print) |
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Authorized Signature |
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(Please print name of individual whose signature appears above if different than the name of the Purchaser printed above.) |
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