UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Silver Purchase Agreement
On March 20, 2023, Metals Acquisition Corp. (Australia) Pty Ltd (“MAC-Sub”), a wholly owned subsidiary of Metals Acquisition Corp (“MAC”), as a seller psa entity, MAC and Metals Acquisition Limited (“MAC Limited”) (which will merge with and into MAC and be the surviving entity (“New MAC”) following the Business Combination (defined below)), as seller, entered into a silver purchase agreement (the “Silver Stream”) with Osisko Bermuda Limited (the “Purchaser”), pursuant to which the Purchaser will advance to New MAC a $75,000,000 upfront cash deposit (the “Silver Deposit”) on account of future deliveries of refined silver by New MAC to the Purchaser referenced to silver production from the CSA Mine (as defined below). The amount of the Silver Deposit will be increased by an additional $15,000,000 if the average silver market price quoted by the London Bullion Market Association (the “LBMA”) is $25.50 per ounce or more over the ten (10) business day period prior to the closing of the Silver Stream. The Silver Deposit represents a pre-payment of a portion of the purchase price for refined silver to be sold by New MAC to the Purchaser under the Silver Stream.
The Silver Deposit will be used by New MAC to finance, in part, MAC-Sub’s acquisition of the shares of Cobar Management Pty. Limited (“CMPL” a wholly owned subsidiary of Glencore Operations Australia Pty Limited (“Glencore”)) and, therefore, CMPL’s interest in the Cornish, Scottish and Australian mine (“CSA Mine”) (the “Business Combination”) for total consideration up to $1.1 billion, consisting of $775 million up front cash consideration (with the potential to be scaled up to $875 million depending on equity demand) to Glencore, plus New MAC issuing up to 10,000,000 of its ordinary shares, par value $0.0001 per share (“New MAC Ordinary Shares”), to Glencore (with Glencore having the option to scale down to none subject to New MAC raising sufficient equity), plus paying a $75,000,000 deferred cash payment to Glencore tied to a future equity raise undertaken by New MAC following completion, plus two separate $75,000,000 contingent payments to Glencore tied to future copper price thresholds, plus MAC-Sub entering into a net smelter royalty pursuant to which, the CMPL will pay to Glencore a royalty of 1.5% of all net smelter copper concentrate produced from the CSA Mine (the “Glencore NSR Royalty”) and associated approximately US$31 million worth of transaction costs (together, the “Business Combination Consideration”).
The Silver Stream provides for the sale by New MAC to the Purchaser of an amount of refined silver equal to 100% of payable silver (calculated as 90% of produced silver) produced by the CSA Mine during the life of mine. The Purchaser will make ongoing cash payments for refined silver delivered equal to 4% (the “Silver Cash Price”) of the silver price quoted on the LBMA for one ounce of refined silver on the day prior to the date of delivery (the “Silver Market Price”). Until the Silver Deposit is reduced to nil, the Purchaser shall credit the difference between the Silver Market Price and the Silver Cash Price against the outstanding Silver Deposit. After the Silver Deposit is reduced to nil, the Purchaser will pay only the Silver Cash Price for each ounce of refined silver.
Additionally, pursuant to the Silver Stream, the Purchaser has been granted a right of first refusal with respect to any royalty, stream or similar interest in the metals or other minerals mined from a project now or hereafter owned by MAC or any affiliate of New MAC that a third party offers to purchase from New MAC or any affiliate of New MAC (the “ROFR”). The ROFR, applies until the later to occur of: (i) seven (7) years from the closing date of the Silver Stream; and (ii) the date on which the Purchaser or any affiliate ceases to hold or control more than 5% of the issued share capital of New MAC.
The Silver Stream will be secured against (i) all property, assets, undertaking and rights of CMPL including without limitation all property and assets comprising the CSA Mine, (ii) all property, assets, undertakings and rights of New MAC, including all equity interests held directly by New MAC in MAC-Sub but excluding certain dormant subsidiaries of MAC that do not and will not have any interest in CMPL or the CSA Mine, (iii) all property, assets, undertakings and rights of MAC-Sub, including all equity interests held directly by MAC-Sub in the capital of CMPL, and (iv) any other property, asset, right or undertaking of New MAC or its subsidiaries that is subject to security granted to the senior lenders party to that certain Syndicated Facility Agreement, dated as of February 28, 2023, with MAC-Sub as borrower, (as previously filed as Exhibit 10.1 to MAC’s Current Report on Form 8-K filed on March 2, 2023) (the “SFA”), the lenders under the Mezz Facility (as defined in the Registration Statement) or Glencore in respect of the Glencore NSR Royalty. The security under the Silver Stream will be subordinated to the security granted to secure the SFA. Security granted in favor of the Purchaser in respect of the Silver Stream will rank equally with the Mezz Facility and the Glencore NSR Royalty, CMPL and MAC-Sub will also guarantee the obligations of New MAC under the Silver Stream.
Except as otherwise described above and customary terms and conditions for stream transactions, the Silver Stream contains substantially similar representations and warranties, covenants, events of default and other provisions as the SFA governing the three senior credit facilities (the “Senior Facilities”). The Silver Stream is subject to the completion of the Senior Facilities, Mezz Facility and the Business Combination.
The foregoing description of the Silver Stream does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of the Silver Stream, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Silver Stream Equity Subscription Agreement
On March 20, 2023, New MAC and MAC entered into a subscription agreement with Osisko Bermuda Limited (the “Subscriber”) (the “Silver Stream Subscription Agreement”) pursuant to which the Subscriber has committed to purchase 1,500,000 New MAC Ordinary Shares at a purchase price of $10.00 per share and an aggregate price of $15,000,000. The subscription is conditional upon the completion of the Silver Stream, Senior Facilities, Mezz Facility and the Business Combination.
The Silver Stream Subscription Agreement provides for, among other things, the terms of the equity issue which are identical to the PIPE Financing (as defined in the Registration Statement).
The foregoing description of the Silver Subscription Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of this agreement, a copy of which is filed as Exhibit 10.2 hereto and are incorporated herein by reference.
Redemptions Backstop Facility
New MAC, MAC and the Purchaser entered into the Redemptions Backstop Facility, consisting of a Copper Purchase Agreement (as defined below) with an upfront deposit of up to $75,000,000 and up to a $25,000,000 equity subscription (to be subscribed for on a pro-rata basis equal to the proportion of the deposit under the Copper Purchase Agreement that New MAC elects to draw on prior to the closing of the Business Combination (the “Copper Stream Subscription Agreement” (as defined below)). The deposit to be made available under the Redemptions Backstop Facility is drawable at New MAC’s discretion in the event there is a shortfall of funds required for the Business Combination. The Redemptions Backstop Facility is subject to the completion of the Senior Facilities, Mezz Facility, Silver Stream and the Business Combination.
Copper Purchase Agreement
On March 20, 2023, MAC-Sub, as a seller psa entity, and MAC and New MAC, as sellers, entered into a copper purchase agreement (the “Copper Stream”) with the Purchaser, pursuant to which the Purchaser will make available to New MAC an upfront cash deposit of up to $75,000,000 (the “Available Copper Deposit”) on account of future deliveries of refined copper by New MAC to the Purchaser referenced to copper production from the CSA Mine. New MAC may draw on the Available Copper Deposit in whole or in part by providing notice to the Purchaser no less than ten (10) business days prior to the closing of the Business Combination, with the Purchaser paying to New MAC in cash the amount of the Available Copper Deposit New MAC elects to draw down (the “Elected Deposit Percentage”) at the closing of the Business Combination (the “Copper Deposit”). The Copper Deposit represents a pre-payment of a portion of the purchase price for refined copper to be sold by New MAC to the Purchaser under the Copper Stream.
The Copper Stream provides for the sale by New MAC to the Purchaser of an amount of refined copper equal to the Copper Stream Percentage (as defined below) of payable copper (being 96.2% of produced copper) produced by the CSA Mine during the life of the mine. For the purposes of the Copper Stream, the “Copper Stream Percentage” shall mean during the following periods:
| Time Period | % Payable Copper |
| Closing to 1st Anniversary of the Closing Date | 0% |
| 1st Anniversary of the Closing Date to 5th Anniversary | 3.00% |
| 5th Anniversary until 33,000 metric tonnes of Refined Copper delivered to the Purchaser (the “Threshold Quantity”) | 4.875% |
| Thereafter from the date that the Threshold Quantity has been met | 2.25% |
The Threshold Quantity and Copper Stream Percentage will be adjusted on a pro rata basis in accordance with the Elected Deposit Percentage. In addition, under the Copper Stream, New MAC may elect to reduce the Copper Stream Percentage and the Threshold Quantity on the 5th anniversary of the closing date to the amounts and percentages set out in the Copper Stream upon making a one-time payment of $40,000,000 or $20,000,000, respectively.
The Purchaser will make ongoing cash payments for refined copper delivered equal to 4% (the “Copper Cash Price”) of the cash settlement price for one tonne of refined copper quoted by the LME on the date prior to the date of delivery (the “Copper Market Price”). Until the Copper Deposit is reduced to nil, the Purchaser shall credit the difference between the Copper Market Price and the Copper Cash Price against the outstanding Copper Deposit. After the Copper Deposit is reduced to nil, the Purchaser will pay only the Copper Cash Price for each tonne of refined copper.
The Copper Stream will be secured against (i) all property, assets, undertaking and rights of CMPL including without limitation all property and assets comprising the CSA Mine, (ii) all property, assets, undertakings and rights of New MAC, including all equity interests held directly by New MAC in MAC-Sub but excluding certain dormant subsidiaries of MAC that do not and will not have any interest in CMPL or the CSA Mine, (iii) all property, assets, undertakings and rights of MAC-Sub, including all equity interests held directly by MAC-Sub in the capital of CMPL; and (iv) any other property, asset, right or undertaking of New MAC or its subsidiaries that is subject to security granted to the senior lenders party to the SFA, the lenders under the Mezz Facility or Glencore in respect of the Glencore NSR Royalty. The security under the Copper Stream will be subordinated to the security granted to the senior lenders party to the SFA. Security granted in favor of the Purchaser in respect of the Copper Stream will rank equally with the Mezz Facility and the Glencore NSR Royalty, CMPL and MAC-Sub will also guarantee the obligations of New MAC under the Silver Stream. CMPL and MAC-Sub will also guarantee the obligations of MAC under the Copper Stream.
Except as otherwise described above and customary terms and conditions for stream transactions, the Copper Stream contains substantially similar representations and warranties, covenants, events of default and other provisions as the SFA governing the Senior Facilities. The Copper Stream is subject to the completion of the Senior Facilities, Mezz Facility, Silver Stream and the Business Combination.
The foregoing description of the Copper Stream does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of this agreement, a copy of which are filed as Exhibit 10.3 hereto and are incorporated herein by reference.
Copper Stream Equity Subscription Agreement
On March 20, 2023, New MAC and MAC entered into a subscription agreement with the Subscriber (the “Copper Stream Subscription Agreement”) pursuant to which the Subscriber will commit to purchase up to 2,500,000 New MAC Ordinary Shares (the “Subscribed Copper Shares”) at a purchase price of $10.00 per share and an aggregate purchase price of up to $25,000,000. The number of Subscribed Copper Shares purchased by the Subscriber shall be adjusted on a pro-rata basis proportional to the percentage of the Available Copper Deposit drawn down by New MAC under the Copper Stream. The subscription is conditional upon the completion of the Copper Stream, Silver Stream, Senior Facilities, Mezz Facility and the Business Combination.
The Copper Stream Subscription Agreement provides for, among other things, the terms of the equity issue which are identical to the PIPE Financing (as defined in the Registration Statement).
The foregoing description of the Copper Stream Subscription Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to the full text of this agreement, a copy of which is filed as Exhibit 10.4 hereto and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure set forth above under the captions “Silver Purchase Agreement” and the “Copper Purchase Agreement” in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.
| Item 3.02 | Unregistered Sale of Equity Securities. |
The disclosure set forth above under the captions “Silver Stream Equity Subscription Agreement” and “Osisko Subscription Agreement” in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. The subscribed shares and the transactions contemplated by the Subscription Agreements will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
For additional information on the proposed Business Combination, see the relevant materials that MAC has filed with the Securities and Exchange Commission (the “SEC”), including a registration statement on Form F-4, which includes a proxy statement/prospectus of MAC. MAC's shareholders and other interested persons are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement/prospectus and documents incorporated by reference therein filed or to be filed with the SEC in connection with the proposed Business Combination, as these materials will contain important information about the CSA Mine, MAC, New MAC and the proposed Business Combination. After the Form F-4 is declared effective by the SEC, MAC will mail the definitive proxy statement/prospectus and other relevant materials to shareholders of MAC as of a record date to be established for voting on, among other things, the proposed Business Combination. Shareholders will also be able to obtain copies of the preliminary proxy statement/prospectus, the definitive proxy statement/prospectus, and other documents filed with the SEC that will be incorporated by reference therein, without charge, once available, at the SEC's website at www.sec.gov. The information contained on, or that may be accessed through, the websites referenced in this communication is not incorporated by reference into, and is not a part of, this communication.
FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K includes “forward-looking statements.” MAC’s actual results may differ from expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, MAC’s expectations with respect to future performance of the CSA Mine and anticipated financial impacts and other effects of the proposed business combination, the satisfaction of the closing conditions to the proposed transaction and the timing of the completion of the proposed transaction. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside MAC’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the occurrence of any event, change, or other circumstances that could give rise to the termination of the Share Sale Agreement; the outcome of any legal proceedings that may be instituted against MAC following the announcement of the Share Sale Agreement dated as of March 17, 2022 (as amended by the Deed of Consent and Covenant dated as of November 22, 2022 (the “Share Sale Agreement”); the inability to complete the proposed transaction, including due to failure to obtain financing, approval of the shareholders of MAC, certain regulatory approvals, or satisfy other conditions to closing in the Share Sale Agreement; the occurrence of any event, change, or other circumstance that could give rise to the termination of the Share Sale Agreement, or could otherwise cause the transaction to fail to close MAC’s inability to secure the expecting financing for the consideration under the Share Sale Agreement; the inability to obtain or maintain the listing of MAC’s shares following the proposed transaction; the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the proposed business combination; the ability to recognize the anticipated benefits of the proposed business combination, which may be affected by, among other things; the supply and demand for copper; the future price of copper; the timing and amount of estimated future production, costs of production, capital expenditures and requirements for additional capital; cash flow provided by operating activities; unanticipated reclamation expenses; claims and limitations on insurance coverage; the uncertainty in mineral resource estimates; the uncertainty in geological, metallurgical and geotechnical studies and opinions; infrastructure risks; and dependence on key management personnel and executive officers; and other risks and uncertainties indicated from time to time in the final prospectus of MAC for its initial public offering and the preliminary and definitive proxy statements relating to the proposed business combination that MAC intends to file with the SEC, including those under “Risk Factors” therein, and in MAC’s other filings with the SEC. MAC cautions that the foregoing list of factors is not exclusive. MAC cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. MAC does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.
More information on potential factors that could affect MAC’s or CSA Mine’s financial results is included from time to time in MAC’s public reports filed with the SEC, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K as well as the preliminary and the definitive proxy statements MAC intends to file with the SEC in connection with MAC’s solicitation of proxies for the meeting of stockholders to be held to approve, among other things, the proposed business combination. If any of these risks materialize or MAC’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that MAC does not presently know, or that MAC currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect MAC’s expectations, plans or forecasts of future events and views as of the date of this communication. MAC anticipates that subsequent events and developments will cause its assessments to change. However, while MAC may elect to update these forward-looking statements at some point in the future, MAC specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing MAC’s assessment as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.
NO OFFER OR SOLICITATION
This Current Report on Form 8-K shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination. This Current Report on Form 8-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| † | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
SIGNATURE
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.
| Metals Acquisition Corp | ||
| Date: March 22, 2023 | By: | /s/ Michael James McMullen |
| Name: Michael James McMullen | ||
| Title: Chief Executive Officer | ||
Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL,
AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
OSISKO BERMUDA LIMITED
and
METALS ACQUISITION CORP
and
METALS ACQUISITION LIMITED
and
METALS ACQUISITION CORP. (AUSTRALIA) PTY LTD
SILVER PURCHASE AGREEMENT
Dated as of March 20, 2023
TABLE OF CONTENTS
| ARTICLE 1 | ||
| INTERPRETATION | ||
| Section 1.1 | Definitions | 1 |
| Section 1.2 | Other Rules of Interpretation | 33 |
| Section 1.3 | Days | 34 |
| Section 1.4 | Joint and Several Liability | 34 |
| Section 1.5 | Merger | 34 |
| Section 1.6 | Schedules | 34 |
| ARTICLE 2 | ||
| PURCHASE AND SALE | ||
| Section 2.1 | Purchase and Sale | 35 |
| Section 2.2 | Delivery Obligations | 35 |
| Section 2.3 | Delivery of Silver Credits | 36 |
| Section 2.4 | Invoicing | 36 |
| Section 2.5 | Purchase Price | 37 |
| Section 2.6 | Loss of Offtaker Delivery | 37 |
| Section 2.7 | Proceeds Account and Cashflow Waterfall | 37 |
| ARTICLE 3 | ||
| DEPOSIT | ||
| Section 3.1 | Deposit | 38 |
| Section 3.2 | Closing Date Deliveries | 38 |
| Section 3.3 | Satisfaction of Conditions Precedent | 39 |
| Section 3.4 | Condition Subsequent | 39 |
| Section 3.5 | Use of Deposit | 39 |
| ARTICLE 4 | ||
| TERM | ||
| Section 4.1 | Term | 39 |
| Section 4.2 | Uncredited Deposit | 40 |
| ARTICLE 5 | ||
| REPORTING; BOOKS AND RECORDS | ||
| Section 5.1 | Reporting Requirements | 40 |
| Section 5.2 | Books and Records | 42 |
| Section 5.3 | Technical Reports | 42 |
| Section 5.4 | Inspections | 43 |
| Section 5.5 | Effective Date of Rights | 43 |
| Section 5.6 | Confidentiality | 43 |
| ARTICLE 6 | ||
| COVENANTS | ||
| Section 6.1 | Conduct of Operations | 44 |
| Section 6.2 | Processing/Commingling | 45 |
| Section 6.3 | Preservation of Corporate Existence | 45 |
| Section 6.4 | Insurance | 46 |
| Section 6.5 | Project Assets | 46 |
| Section 6.6 | Transfers | 47 |
( i )
| Section 6.7 | Offtake Agreements | 48 |
| Section 6.8 | Material Contracts | 48 |
| Section 6.9 | Restrictions on PSA Entities | 49 |
| Section 6.10 | Separation Requirements | 50 |
| Section 6.11 | Related Party Transactions | 50 |
| Section 6.12 | Distributions. | 51 |
| Section 6.13 | Abandonment | 51 |
| Section 6.14 | Right of First Refusal | 51 |
| Section 6.15 | Code of Conduct | 53 |
| Section 6.16 | Anti-Corruption and Anti-Terrorism Laws | 54 |
| Section 6.17 | Sanctions | 54 |
| Section 6.18 | Financial Covenants | 54 |
| Section 6.19 | Taxation | 56 |
| ARTICLE 7 | ||
| GUARANTEES AND SECURITY | ||
| Section 7.1 | Guarantees and Security | 56 |
| ARTICLE 8 | ||
| REPRESENTATIONS AND WARRANTIES | ||
| Section 8.1 | Representations and Warranties of the Seller PSA Entities | 57 |
| Section 8.2 | Representations and Warranties of Purchaser | 57 |
| Section 8.3 | Survival of Representations and Warranties | 58 |
| Section 8.4 | Knowledge | 58 |
| ARTICLE 9 | ||
| DEFAULTS AND DISPUTES | ||
| Section 9.1 | Events of Default | 58 |
| Section 9.2 | Remedies | 59 |
| Section 9.3 | Indemnity | 60 |
| Section 9.4 | Disputed Reports | 61 |
| Section 9.5 | Disputes | 61 |
| Section 9.6 | Insolvency Event | 62 |
| ARTICLE 10 | ||
| ADDITIONAL PAYMENT TERMS | ||
| Section 10.1 | Payments | 62 |
| Section 10.2 | Taxes | 62 |
| Section 10.3 | New Tax Laws | 63 |
| Section 10.4 | Interest | 63 |
| Section 10.5 | Set Off | 64 |
| Section 10.6 | Judgment Currency. | 64 |
| ARTICLE 11 | ||
| GENERAL | ||
| Section 11.1 | Further Assurances | 64 |
| Section 11.2 | No Joint Venture | 65 |
| Section 11.3 | Governing Law | 65 |
| Section 11.4 | Costs and Expenses | 65 |
| Section 11.5 | Survival | 65 |
| Section 11.6 | Notices | 65 |
| Section 11.7 | Press Releases | 66 |
( ii )
| Section 11.8 | Amendments | 66 |
| Section 11.9 | Beneficiaries | 67 |
| Section 11.10 | Entire Agreement | 67 |
| Section 11.11 | Waivers | 67 |
| Section 11.12 | Assignment | 67 |
| Section 11.13 | Invalidity and Unenforceability | 67 |
| Section 11.14 | PPSA Provisions | 67 |
| Section 11.15 | Counterparts | 68 |
ADDENDA
| Schedule A MINING PROPERTIES (WITH MAP OF STREAM PROPERTIES) | |
| Schedule B CORPORATE STRUCTURE AND ORGANIZATION | |
| Schedule C REPRESENTATIONS AND WARRANTIES OF SELLER PSA ENTITIES | |
| Schedule D REPRESENTATIONS AND WARRANTIES OF PURCHASER | |
| Schedule E MATERIAL CONTRACTS | |
| Schedule F STREAM NPV PROCEDURES | |
| Schedule G TRANSACTION SECURITY DOCUMENTS | |
| Schedule H MONTHLY REPORT | |
| Schedule I ACCESSION AGREEMENT | |
| Schedule J ANNUAL COMPLIANCE CERTIFICATE | |
| Schedule K CONDITIONS PRECEDENT | |
| Schedule L CONDITIONS SUBSEQUENT | |
| Schedule M EXISTING SECURITY |
( iii )
SILVER PURCHASE AGREEMENT
THIS SILVER PURCHASE AGREEMENT dated as of March 16, 2023 (the “Signing Date”) between OSISKO BERMUDA LIMITED, an exempted company existing under the laws of Bermuda, as purchaser, METALS ACQUISITION LIMITED, a company incorporated under the laws of Jersey, as seller, METALS ACQUISITION CORP, a Cayman Islands exempted company, as seller, METALS ACQUISITION CORP. (AUSTRALIA) PTY LTD (ACN 657 799 758), a company existing under the laws of Australia, as a seller psa entity, and each other Person who from time to time accedes to this Agreement as a Seller PSA Entity.
RECITALS:
| A. | Upon completion of the Merger of MAC with and into MAL, MAL will continue as the surviving company and thereby all undertaking, property and liabilities of MAC will vest in MAL including all Silver Stream Obligations; |
| B. | MAC Australia is a wholly owned Subsidiary of MAC and upon completion of the Merger will be a wholly-owned Subsidiary of MAL; |
| C. | Upon completion of the Acquisition Transaction, MAC Australia will own the legal and beneficial interest in all of the issued and outstanding Equity Securities in the capital of the Project Owner; |
| D. | The Project Owner is the sole legal and beneficial owner of the Stream Properties and the other Project Assets; and |
| E. | Seller has agreed to sell to Purchaser, and Purchaser has agreed to purchase from Seller, an amount of Refined Silver equal to the Payable Silver, subject to and in accordance with the terms and conditions of this Agreement; |
NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions
As used in this Agreement, including the recitals and schedules hereto, the following terms have the following meanings:
“Abandonment” has the meaning set out in Section 6.13.
“Abandonment Property” has the meaning set out in Section 6.13.
“Acceptable Bank” means:
| (a) | a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or A3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency; or |
| (b) | any other bank or financial institution approved by Purchaser. |
- 2 -
“Accession Agreement” means the accession agreement between the Project Owner and Purchaser substantially in the form attached as Schedule [***] to be executed in accordance with Section 3.4(2) and Schedule L.
“Account Bank Agreement” means:
| (a) | in relation to the Initial Account Bank, the ‘account bank agreement’ to be entered into prior to the Closing Date and the accompanying document titled “conditions of consent to charge”; and |
| (b) | in relation to a replacement account bank, any other account bank agreement entered into between Seller and that replacement account bank in the form approved by Purchaser. |
“Acknowledgement” means the acknowledgement and affirmation executed and delivered by MAL, and consented to by MAC Australia, pursuant to which MAL acknowledges and affirms that all undertaking, property and liabilities of MAC vested in MAL as the surviving company after the Merger and MAL has assumed all Silver Stream Obligations of MAC.
“Acquiror” has the meaning set out in the definition of “Change of Control”.
“Acquisition Finance Documents” means, collectively, the Silver Stream Documents, the Copper Stream Documents, the Senior Facility Agreement, the Mezzanine Debt Facility Agreement, the Glencore Royalty Deed, the Transaction Security Documents and all other agreements and documents to be entered into or delivered by the Seller Group Entities or any one of them in connection with the Senior Project Acquisition Facility, the Mezzanine Debt or the Glencore Royalty.
“Acquisition Transaction” means the consummation of the transactions contemplated by the SSA, including acquisition by MAC Australia of 100% of the issued share capital in the Project Owner.
“Adverse Impact” means any effect, event, occurrence, amendment or other change that, when taken together with all other effects, events, occurrences, amendments or other changes, is or would reasonably be likely to:
| (a) | have a material adverse effect on: (i) the business, operation, property, condition (financial or otherwise) or prospects of the Seller PSA Entities taken as a whole;(ii) the ability of one or more of the Seller PSA Entities to perform its obligations under any of the Silver Stream Documents; (iii) the validity or enforceability of, or the effectiveness or ranking of the Security granted or purporting to be granted under any of the Silver Stream Security Documents or the rights or remedies of Purchaser under any of the Silver Stream Documents; |
| (b) | have a material adverse effect on the Project Owner’s ability to operate the Mine in accordance with the Mine Plan as in effect immediately prior to the occurrence of the Adverse Impact; |
| (c) | significantly decrease or delay the expected silver production from the Stream Properties or otherwise significantly decrease or delay the expected Payable Silver in each case based on the Mine Plan in effect at the time of the occurrence of such effect, event, occurrence, amendment or other change; or |
| (d) | result in a Trigger Event. |
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“Affiliate” means, in relation to any Person, any other Person controlling, controlled by, or under common control with such first mentioned Person.
“Agreement” means this Silver Purchase Agreement and all attached schedules, in each case as the same may be supplemented, amended, restated, modified or superseded from time to time in accordance with the terms hereof.
“Annual Compliance Certificate” means the certificate of the chief financial officer of Seller substantially in the form attached as Schedule J and confirming the matters set out therein.
“Anti-Corruption Laws” means, with respect to any Person, any law, judgment, order, executive order, decree, ordinance, rule or regulation of any Governmental Authority related to bribery or corruption binding on or affecting such Person or its property or operations including (i) the United States Foreign Corrupt Practices Act of 1977, as amended; (ii) the Criminal Code Act 1995 (Cth); (iii) the Corruption (Jersey) Law 2006; (iv) United Kingdom Bribery Act 2010; (v) the Corruption of Foreign Public Officials Act (Canada), as amended; (vi) sections 121 (Frauds on the Government) and 426 (Secret Commissions) of the Criminal Code (Canada); (vii) the OECD Convention of December 17, 1997 with respect to measures against corruption of foreign public officials and any OECD Guidelines or Action Statements with respect thereto; and (viii) any other applicable national and international laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.
“Anti-Terrorism Laws” means, with respect to any Person, any law, judgment, order, executive order, decree, ordinance, rule or regulation of any Governmental Authority related to anti money laundering, anti-terrorist financing, Sanctions and “know your client” laws binding on or affecting such Person or its property or operations including (i) the U.S. Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (United States), as amended; (iii) the United States Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001; (iv) the Bank Secrecy Act (United States), as amended; (v) the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth); (vi) the Suppression of Terrorism Act 1978 (Jersey) Order 19782; (vii) the Terrorism (Jersey) Law 2002; (viii) the Proceeds of Crime and Terrorism (Miscellaneous Provisions) (Jersey) Law 2014; (ix) the Sanctions and Asset Freezing (Jersey) Law 2019; (x) the Sanctions and Asset Freezing (Implementation of External Sanctions) (Jersey) Oder 2021; (xi) the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); (xii) Parts II.1 (Terrorism) and XII.2 (Proceeds of Crime) of the Criminal Code (Canada); (xiii) regulations promulgated pursuant to the Special Economic Measures Act (Canada), (xiv) the United Nations Act (Canada), (xv) the Justice for Victims of Corrupt Foreign Officials Act (Canada), and (xvi) the Freezing Assets of Corrupt Foreign Officials Act (Canada) and all regulations and orders made pursuant to these statutes.
“Applicable Law” means any law, regulation, decision, ordinance, code, order or other requirement or rule of law or the rules, policies, orders or regulations of any Governmental Authority, including any judicial or administrative interpretation thereof, applicable to a Person or any of its properties, assets, businesses or operations.
“Approved Acquiror” means a Person that:
| (a) | has sufficient financial resources and technical and operational capability to continue the mining operations and activities pertaining to or in respect of the Mine, the Stream Properties and the Mineral Processing Facilities in accordance with all Applicable Laws, the Mine Plan, the Authorisations and Good Practice Standards; |
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| (b) | (i) is incorporated or organized (with a substantial presence), has its primary stock exchange listing, management headquarters and presence of substantial assets in the United States, Canada, Western Europe, Japan, Australia, Peru, Mexico, Brazil, Chile and South Africa or other jurisdictions with an equivalent rule of law environment and ability to enforce judgments, or (ii) is otherwise acceptable in the discretion of Purchaser; and |
| (c) | is not a Sanctioned Person. |
For the purpose of this definition in order for a Person to have sufficient technical expertise, the Seller PSA Entities must demonstrate that such Person (together with its Affiliates) has the team, or will, following the Transfer or Change of Control, as applicable, have the team, with the proven ability and experience to develop and operate a copper mine and processing facility of comparable size and type to the Mine (such ability and experience to include the ability to provide operating oversight and have the expertise to manage the capital allocation decisions and technical evaluation for capital expansion projects); such requirement will be deemed to be satisfied if the operating team for the Mine following the completion of the Transfer or Change of Control, as applicable, materially remains the same as the operating team for the Mine prior to such Transfer or Change of Control.
“Approved Hedging” has the meaning set out in paragraph (b) in the definition of Permitted Secured Debt.
“Arbitration Rules” means the International Arbitration Rules of the International Centre for Dispute Resolution.
“Auditor’s Report” means a written report prepared by a national accounting firm in Australia that is independent of the Seller Group Entities and Purchaser, is mutually agreeable to the Parties and has experience and expertise in determining the quantity of silver mined, produced, extracted or otherwise recovered from mining projects, which report determines at a minimum the number of ounces of Payable Silver that Purchaser was entitled to have received pursuant to this Agreement in respect of any period in dispute.
“Authorisation” means:
| (a) | an authorization, consent, approval, resolution, licence (including each Water Licence), permit, order, concession, franchise, exemption, filing or registration; or |
| (b) | in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Authority intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action. |
“Available Cash” means any amounts classified according to applicable IFRS as ‘Cash’ (which is held with an Acceptable Bank).
“Base Case Financial Model” means the excel document in a form and substance equivalent to that provided on the Closing Date comprising the reserves and resources position, business plan, production, operating and financial forecasts (including forecast capital expenditure and forecast revenues) of MAC Australia and its Subsidiaries from the Closing Date until the end of the currently forecast life of mine, or in relevant cases, such longer term as necessary to demonstrate compliance with any forward-looking financial covenants required under this Agreement and any Permitted Secured Debt referred to in paragraph (a) or (c) of the definition thereof, provided to Purchaser under Section 3.2, as updated annually and from time to time in accordance with this Agreement and for the purposes of evidencing that MAC Australia is permitted to increases the amount of hedging under the Approved Hedging..
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“Base Interest Rate” means Term SOFR plus 12% per annum.
“Books and Records” means all books, records, invoices, data, documentation, weight, moisture and assay certificates, scientific and technical information, samples and other information relating to operations and activities with respect to the Mine, the Mining Properties and the mining, treatment, processing, milling, leaching, gravity, refining, concentrating and transportation of Minerals.
“Business Day” means any day (other than a Saturday or Sunday) on which banks are open for general business in Sydney, London, Bermuda and Jersey.
“Cambiate Equipment Supply Agreement” means the Cambiate equipment supply (loaders & trucks) agreement dated June 30, 2020 with Sandvik Mining and Construction Australia Pty Ltd relating to the Project.
“Cash Equivalent Investments” means at any time:
| (a) | certificates of deposit maturing within six months after the relevant date of calculation and issued by an Acceptable Bank; |
| (b) | bonds, debentures, stock, treasury bills, notes or any other security issued or guaranteed by the government of the United States of America, the Commonwealth of Australia or any government of any State or Territory of the Commonwealth of Australia, the United Kingdom, any member state of the European Economic Area or any Participating Member State (other than Portugal, Ireland, Greece or Spain) or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
| (c) | commercial paper (not convertible or exchangeable to any other security): |
| (i) | for which a recognised trading market exists; |
| (ii) | issued by an issuer incorporated in the United States of America, Australia, the United Kingdom, any member state of the European Economic Area or any Participating Member State; |
| (iii) | which matures within six months after the relevant date of calculation; and |
| (iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
| (d) | any investment in money market funds (i) which have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited, (ii) which invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above and (iii) to the extent that investment can be turned into cash on not more than 30 days' notice; |
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| (e) | overnight deposits held with an Acceptable Bank; or |
| (f) | any other debt security approved by the Senior Project Acquisition Facility lenders or agent thereunder, |
in each case, to which MAC Australia is alone (or together with other Seller PSA Entities) beneficially entitled at that time and which is not issued or guaranteed by any Seller PSA Entity or subject to any Encumbrance (other than Encumbrance arising under the Acquisition Finance Documents).
“Cashflow Waterfall” means the order of payments that may be made from the Proceeds Account as set out in Part A (Pre-Enforcement Cashflow Waterfall) of Schedule 5 (Cashflow Waterfalls) of the Intercreditor Deed.
“Cement Supply Agreement” means the forward purchase agreement – supply of cement with a commencement date of 1 January 2022 between the Project Owner and East Coast Cement Pty Ltd ACN 603 062 497.
“Change of Control” of a Person means the consummation of any transaction, including any consolidation, arrangement, amalgamation, merger or demerger or any issue, Transfer or acquisition of voting shares, the result of which is that any other Person or group of other Persons acting jointly or in concert for purposes of such transaction (any such Person or group of Persons being referred to as the “Acquiror”): (i) becomes the beneficial owner, directly or indirectly, of 50% or more of the voting shares of such Person, measured by voting power rather than number of shares; or (ii) acquires control of such Person.
“Closing Date” has the meaning set out in Section 3.2(1).
“Closing Date Security Documents” means, collectively, the Holdco Guarantee, the Holdco Security Agreements and the Seller Security Agreements.
“Cobar Terminal Services Agreement” means the Cobar terminal services agreement dated 31 August 2021 between the Project Owner and Aurizon Port Services NSW Pty Ltd ACN 103 570 181.
“Code of Conduct” has the meaning set out in Section 6.15(1).
“Collateral” means all present and after acquired property and assets (whether real, personal or other and including Equity Securities and the Project Assets) of the Seller PSA Entities in which charges, mortgages, assignments by way of security or security interests are granted or purported to be granted pursuant to the Security Documents but excluding the Excluded Shares.
“Commingling Plan” has the meaning set out in Section 1.1(2).
“Commitment Documents” means the backstop financing commitment letter dated December 27, 2022 between Seller and Purchaser, including the term sheet attached thereto as Exhibit A.
“Compensation Plan” has the meaning set out in Section 1.1(2).
“Comprehensively Sanctioned Country or Territory” means a country or territory that is, or whose government is, the subject of Sanctions, including the Crimea Region of Ukraine, the Democratic Republic of North Korea, the Donetsk People’s Republic, the Luhansk People’s Republic, Cuba, Iran, Sevastopol, Sudan, Syria and Russia.
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"Completion" has the meaning given in the SSA, as in effect on the date hereof.
“Confidential Information” has the meaning set out in Section 5.6(1).
“Consent Deed” means a consent deed in a form acceptable to Purchaser (acting reasonably) in relation to the attachment of the Security to the following:
| (a) | the Diesel Supply Agreement; |
| (b) | the Cement Supply Agreement; and |
| (c) | any other Material Contract which Purchaser determines (acting reasonably) requires consent to the Security attaching to it or any property in connection with it. |
“Consultancy Services Umbrella Agreement” means the umbrella agreement – consultancy services" dated 8 February 2021 between the Project Owner and Golder Associates Pty Ltd ACN 006 107 857.
“Contingent Copper Payments” means, collectively (i) the unsecured, subordinated payment of up to US$75,000,000 deferred consideration payable by MAL to Glencore Operations Australia Pty Limited under the SSA payable if, over the life of the Project, the average daily LME closing price of copper is greater than US$9,370 per metric tonne for any rolling 18 month period (starting at Completion), and (ii) the unsecured, subordinated payment of up to US $75,000,000 deferred consideration payable by the Company to Glencore Operations Australia Pty Limited under the SSA payable if, over the life of the mine, the average daily LME closing price of copper is greater than US$9,920 per metric tonne for any rolling 24 month period (commencing at Completion);
“control” means the right, directly or indirectly, to direct or cause the direction of the management of the business or affairs of a Person, whether by ownership of securities, by contract or otherwise (including by way of entitlement to nominate a majority of the directors of such entity); and “controls”, “controlling”, “controlled by” and “under common control with” have corresponding meanings.
“Cooling Plant Agreement” means the wet equipment hire contract dated 6 September 2019 between the Project Owner and Aggreko Generator Rentals Pty Ltd ACN 001 991 457.
“Copper Purchase Agreement” means the copper purchase agreement dated as of the date hereof between Purchaser as purchaser, Seller as seller, MAC Australia as a seller PSA entity and upon completion of the Whitewash Procedures, the Project Owner, as a seller PSA entity and project owner.
“Copper Stream Documents” means, collectively, (i) the Copper Purchase Agreement, (ii) the guarantees granted by MAC Australia and upon completion of the Whitewash Procedures, the Project Owner of the Copper Stream Obligations; (iii) all general security deeds, mortgage terms deeds and all other assignments, deeds of trust, mortgages, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants to Purchaser mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the Copper Stream Obligations, (iv) the Intercreditor Deed, (v) the Subordination Deed, (vi) the accession agreement between Purchaser and the Project Owner, (vii) each other agreement, document, instrument or certificate delivered for the benefit of Purchaser pursuant to or otherwise in connection with any of foregoing agreements referred to in above paragraphs (i) through (vi) inclusive, and (viii) and any other agreement designated from time to time by Purchaser and Seller as a “Copper Stream Document” for purposes of the guarantees and security referred to in above paragraphs (ii) and (iii).
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“Copper Stream Obligations” means all indebtedness, liabilities and other obligations, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time or from time to time due or accruing due and owing by or otherwise payable or to be performed by any Seller Group Entity to Purchaser under, in connection with or pursuant to the Copper Stream Documents.
“Corporations Act” means the Corporations Act 2001 (Cth) (Australia).
“Date of Delivery” has the meaning set out in Section 2.3(2).
“Deposit” means the amount of $75,000,000. unless the Silver Market Price averages $25.50 per ounce or more over the 10 Business Day period prior to the Closing Date, in which event the Deposit will be the aggregate amount of $90,000,000.
“Deposit Reduction Date” means the date on which the Uncredited Deposit is reduced to nil in accordance with this Agreement.
“Derivative Transaction” means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price including Hedging Contracts.
“Diesel Supply Agreement” means the diesel supply agreement dated 7 September 2012 between the Project Owner and Glencore Singapore Pte Ltd ABN 42 883 745 924.
“Disclosing Party” has the meaning set out in Section 5.6(1).
“Disclosure Letter” means the disclosure letter dated the date of this Agreement and delivered by Seller to Purchaser with this Agreement.
“Dispute” means any and all questions, claims, controversies, or disputes arising out of or relating to the validity, construction, interpretation, meaning, performance, effect or breach of any one or more of this Agreement and any Silver Stream Document, or the rights and liabilities arising hereunder or thereunder.
“Dispute Notice” has the meaning set out in Section 9.4(1).
“Distribution” means with respect to any Seller PSA Entity:
| (a) | the retirement, redemption, retraction, purchase or other acquisition by such Person of any Equity Securities of such Person; |
| (b) | the declaration or payment by such Person of any dividend, return of capital or other distribution (in cash, securities, other property or otherwise) of, on or in respect of, any Equity Securities of such Person or any other payment or distribution of any kind to its direct or indirect securityholders; |
| (c) | any other payment or distribution (in cash, securities, other property, or otherwise) by such Person of, on or in respect of, its Equity Securities; |
| (d) | any payment, repayment, redemption, repurchase or acquisition by such Person of, or on account of, Subordinated Intercompany Debt or any other Financial Indebtedness subordinate to the Silver Stream Obligations, including any payment on account of principal, interest, bonus, premium, make-whole or otherwise; and |
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| (e) | any management, consulting or similar fee or any bonus payment or comparable payment, or by way of gift or gratuity, to any Affiliate of such Person or to any director or officer thereof, excluding, for greater certainty, employment compensation in the ordinary course of business. |
“Distribution Account” means the account held with the Initial Account Bank and styled ‘Distribution Account’ and any replacement bank account with a replacement bank that is an Acceptable Bank and acceptable to Purchaser and agreed between Seller and Purchaser to be the Distribution Account.
“EBITDA” means for any period, the total consolidated operating income of MAC Australia and its Subsidiaries for that period as stated in MAC Australia’s financial statements before interest and taxation and:
| (a) | after adding back any amount attributable to the amortization, depreciation or impairment charges and any unrealized gains or losses in respect of any Derivative Transactions other than any Derivative Transactions entered into in accordance with the Approved Hedging; |
| (b) | excluding any exceptional, one off, non-recurring or extraordinary items which represent gains or losses including those arising on: |
| (i) | the restructuring of the activities of an entity and reversals of any provisions for the cost of restructuring; |
| (ii) | disposals, revaluations or impairment of non-current assets; and |
| (iii) | disposals of assets associated with discontinued operations, |
on the basis that the closing out of any Derivative Transactions is not an item of an unusual or non-recurring nature for these purposes;
| (c) | excluding any upward or downward adjustment of any non-cash provision during that period; and |
| (d) | excluding unrealised mark-to-market gains and losses under any Derivative Transaction entered into in accordance with the Approved Hedging. |
“Effective Date” means February 1, 2023.
“Encumbrances” means all mortgages, charges, assignments (including by way of security), hypothecs, pledges, security interests, liens, movable assets securities, trusts, easements, restrictions, patent or other reservation in minerals, royalty claims, and other encumbrances and adverse claims of every nature and kind, including any “security interest” as defined in sections 12(1) or (2) of the PPSA.
“Environmental Laws” mean Applicable Laws relating to pollution or protection of the environment or any natural resource, archaeological preventive programs or occupational or public health or safety, including Applicable Laws relating to emissions, discharges, or releases of Hazardous Substances (whether ordinary, industrial, toxic or hazardous) or wastes into the environment (including ambient air, atmosphere, fauna, flora, surface water, ground water, aquifers, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, management, treatment, storage, disposal, transport or handling of Hazardous Substances (whether ordinary, industrial, toxic or hazardous) or wastes, which are applicable to the Mine, the Project Assets or the other assets owned, controlled or managed by the Project Owner or to the activities at any time of the Project Owner.
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“Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.
“Event of Default” has the meaning set out in Section 9.1.
“Excluded Shares” means the issued and outstanding shares held by Seller in the capital of MAC AU 1 Pty Ltd (ACN 665 573 875), MAC AU 2 Pty Ltd (ACN 665 574 167), MAC AU 3 Pty Ltd (ACN 665 574 210) and MAC AU 4 Pty Ltd (ACN 665 574 327) so long as the Persons issuing such shares have no direct or indirect interest in the Project Owner or the Project Assets.
“Excluded Taxes” means with respect to Purchaser, income or franchise Taxes imposed on (or measured by) its taxable income by Bermuda, or by the jurisdiction under the Applicable Law of which such recipient is organized or in which its principal office is located.
“Financial Indebtedness” means, with respect to any Person, any indebtedness for or in respect of:
| (a) | moneys borrowed and any debit balance at any financial institution; |
| (b) | any amount raised by acceptance under any acceptance credit, bill acceptance or bill endorsement facility or dematerialised equivalent; |
| (c) | any amount raised under any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
| (d) | the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with IFRS in force before 1 January 2019, have been treated as an operating lease); |
| (e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
| (f) | any redeemable shares where the holder has the right, or the right in certain conditions, to require redemption; |
| (g) | any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing; |
| (h) | excluding the Contingent Copper Payments, consideration for the acquisition of assets or services payable more than 90 days after acquisition; |
| (i) | any Derivative Transaction (and, when calculating the value of any Derivative Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Derivative Transaction, that amount) shall be taken into account); |
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| (j) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
| (k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) – (j) above. |
“FIRB Requirements” means (i) the Treasurer of the Commonwealth of Australia ("Treasurer") (or the Treasurer’s delegate) has provided a written no objections notification to the entry by Purchaser into the ‘Proposed Transaction’ as that term is defined within Purchaser’s application to the Treasurer dated 9 March 2023 for the purposes of Part 2, Divisions 2 and 3 of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the “FIRB Application”) either without conditions or with conditions acceptable to Purchaser (acting reasonably) or (ii) following the FIRB Application having been given by Purchaser to the Treasurer, under the Foreign Acquisitions and Takeovers Act 1975 (Cth) the Treasurer has ceased to be empowered to make any order under Part 3 of that Act because the applicable time limit on making orders and decisions under that Act has expired.
“Freehold Properties” means each freehold property held by the Project Owner listed in Part II of Schedule A.
“Funds Flow Statement” has the meaning set out in paragraph (ee) of Schedule K.
“Glencore Offtake Agreement” means the offtake agreement to be entered on or prior to the Closing Date between Glencore International AG, as buyer, and the Project Owner, as seller, with respect to purchase of copper concentrate from the Mine.
“Glencore Royalty” means the 1.5% net smelter return royalty on the Royalty Area (as defined therein) granted by the Project Owner to Glencore Operations Australia Pty Limited in connection with the Acquisition Transaction pursuant to the Glencore Royalty Deed.
“Glencore Royalty Deed” means the royalty deed to be entered into on or before the Closing Date between the Project Owner as grantor, Seller as guarantor and Glencore Operations Australia Pty Limited as grantee.
“Good Practice Standards” means, in relation to the business of mining (including all relevant disciplines pertaining thereto, such as metallurgy, processing, engineering, environmental and governance matters, relations with community and indigenous peoples and other social matters), the exercise of that degree of skill, care, prudence, operational and financial foresight and operating practice which would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking as the Project Owner under the same or similar circumstances, with the exercise of skill, care, prudence, operational and financial foresight and operating practices to be substantially in accordance with recognised best practices in the mining industry in Australia.
“Governmental Authority” means any government or any governmental, semi-governmental or judicial entity or authority, including any self-regulatory organisation established under statute or any stock exchange.
“GST Law” means the same as ‘GST law’ means in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
“Guarantees” means, collectively, the Holdco Guarantee and the Project Owner Guarantee.
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“Haulage Agreement” means the rail haulage services agreement dated on or around 1 December 2009 and as varied on 1 December 2015 and 8 September 2020 between the Project Owner and Qube Logistics (Rail) Pty Ltd ACN 082 313 415 (formerly South Spur Rail Services Pty Ltd).
“Hazardous Substance” means any substance or a composition that contains one or more substances (a) whose characteristics pollute or damage the environment or any natural resource, (b) which is dangerous or poses a risk to the life or health of any human, including those substances with proven acute or chronic toxicity and other damaging effects, or (c) which is defined or otherwise regulated under any Environmental Law.
"Hedge Counterparty” means any person which is, or has become, a party to the Senior Security Trust Deed as a Hedge Counterparty in accordance with the Senior Security Trust Deed and to the Intercreditor Deed as a Hedge Counterparty in accordance with the Intercreditor Deed.
“Hedging Contracts” means any any master agreement, confirmation, schedule or other agreement entered into or to be entered into by Seller and a Hedge Counterparty for the purpose of hedging only the types of liabilities and/or risks in relation to one or more commodities, currencies, interest, securities or other matters, including commodity futures trading, forward sale and/or purchase contracts, spot-deferred contracts, option contracts or trading, metals trading, precious metal loans, fixed price offtake agreements or other exchange, swap, forward, cap, collar, floor, option or other hedging or similar agreement or any combination thereof, or any other similar transactions.
“Holdco Guarantee” has the meaning set out in Section 7.1(1).
“Holdco Security Agreements” has the meaning set out in Section 7.1(1).
“IFRS” means the International Financial Reporting Standards applied in accordance with generally accepted accounting principles, standards and practices in Australia.
“Immaterial Mining Properties” means any one of the following assets:
| (a) | Exploration Lease 6907 (EL 6907) and Exploration Lease 6223 (EL 6223); |
| (b) | obsolete or redundant vehicles, plant and equipment, |
| (c) | leasehold interests in, or licences of, residential property to employees of the Borrower or Target in the ordinary course of business; and |
| (d) | other Mineral Facilities disposed of in the ordinary course of business that are not reasonably required for, or useful in connection with, the operation of the Project in accordance with the then current Mine Plan. |
“including” or “includes” means including without limitation or includes without limitation.
“Initial Account Bank” means Citibank N.A., Sydney Branch.
“Initial Technical Report” means the independent technical report summary dated May 13, 2022 prepared by Behre Dolbear Australia Pty Ltd in accordance with SEC Regulation S-K Technical Report Summary requirements in respect of CSA Copper Mine – New South Wales – Australia.
“Initial Term” has the meaning set out in Section 4.1.
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“Insolvency Event of Default” means any one of the following events:
| (a) | a Seller PSA Entity or so long as any Permitted Secured Debt is outstanding, any other Seller Group Entity: |
| (i) | is or is presumed or deemed to be unable or admits inability to pay its debts as they fall due; |
| (ii) | suspends making payments on any of its debts; |
| (iii) | is bankrupt or any applications are made, proceedings are commenced or other steps taken to for it to be declared bankrupt under Applicable Law or any step is taken by it to participate in a scheme of arrangement under Part 18A of the Companies (Jersey) Law 1991; or |
| (iv) | by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; or |
| (b) | a moratorium is declared in respect of any indebtedness of any member of the Seller Group Entities; |
| (c) | any corporate action, legal proceedings or other procedure or step is taken in relation to: |
| (i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, liquidation, striking off, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Seller PSA Entity or other Seller Group Entity other than the Merger, a solvent liquidation or reorganisation of any member of the Seller Group Entities which is not a Seller PSA Entity except an application made to a court for the purpose of winding up such a Person which is disputed by a Seller PSA Entity or other relevant Seller Group Entity acting diligently and in good faith and dismissed within 14 Business Days; or |
| (ii) | a composition, compromise, assignment or arrangement with any creditor of any Seller PSA Entity or other Seller Group Entity; or |
| (iii) | the appointment of a liquidator (other than in respect of a solvent liquidation of member of the Seller Group Entities which is not a Seller PSA Entity), receiver, administrative receiver, administrator, restructuring officer, compulsory manager or other similar officer in respect of any Seller PSA Entity or other Seller Group Entity or any of its assets except on application made to a court for the purpose of appointing such a Person which is disputed by a Seller PSA Entity or other relevant Seller Group Entity acting diligently and in good faith and dismissed within 14 Business Days; or |
| (iv) | enforcement of any Encumbrance over any assets of any member of the Seller Group Entities; |
or any analogous procedure or step is taken in any jurisdiction; or
| (d) | any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Seller PSA Entity having an aggregate value equal to or greater than US$10,000,000. |
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“Intercreditor Deed” means the intercreditor deed to be dated before the Closing Date between Seller, MAC Australia, the Senior Security Trustee, Citisecurities Limited as senior agent, Citibank, N.A., Sydney Branch, Bank of Montreal, National Bank of Canada and The Bank of Nova Scotia as senior lenders, Citibank N.A., Sydney Branch as hedging counterparty, Sprott Resource Lending Corp. as mezzanine security trustee, Sprott Resource Lending Corp. as mezzanine note agent, Sprott Private Resource Lending II (Collector-2), LP as mezzanine noteholder, Purchaser as silver streamer and copper streamer and Glencore Operations Australia Pty Limited as NSR holder.
“IRR Amount” means an amount calculated upon the occurrence of an Event of Default and termination of this Agreement equal to (i) the sum of the Deposit and a per annum percentage return on the Deposit equal to (x) [***] from the Closing Date to the date of the occurrence of such Event of Default, and (y) [***] from the date of the occurrence of such Event of Default to the date of indefeasible payment in full of the Silver Stream Obligations, less (ii) the net value of Refined Silver delivered to Purchaser under this Agreement where the net value of Refined Silver delivered hereunder is the Silver Market Price of such Refined Silver on the day immediately prior to the Date of Delivery of such Refined Silver less the Silver Cash Price paid by Purchaser on account of such Refined Silver.
“ITSA” means an indirect tax sharing agreement which:
| (a) | satisfies the requirements of section 444-90 of the Taxation Administration Act 1953 (Cth); and |
| (b) | covers all group liabilities of the GST Group (as defined in the GST Law) to which a Seller PSA Entity or the Project Owner is a member; |
“Jersey Companies Law” means the Companies (Jersey) Law 1991;
“Jersey Consent Letter” means a consent letter (in the form acceptable to Purchaser) executed by any party granting a Silver Stream Security Document governed by the laws of Jersey, consenting to the registration of a financing statement on the SIR, in respect of the security interest to be created pursuant to such Silver Stream Security Document;
“JORC Code” means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, as amended.
“Judgment Currency” has the meaning set out in Section 10.6.
“LBMA” means the London Bullion Market Association or a successor market satisfactory to Purchaser.
“Legal Reservations” means:
| (c) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, liquidation, reorganisation, moratoria, administration and other laws generally affecting the rights of creditors; |
| (d) | the time barring of claims under applicable limitations laws, the possibility that an undertaking to assume liability for or indemnity of a person against non-payment of stamp duty may be void and defences of set-off or counterclaim; and |
| (e) | any other matters which are set out as qualification as to matters of law in any legal opinions to be given to Purchaser in connection with this Agreement. |
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“Less Key Material Contracts” means the contracts listed under that heading in Schedule E and any replacements thereof.
“Losses” means all claims, demands, proceedings, fines, losses, damages, liabilities, obligations, deficiencies, costs and expenses (including all legal and other professional fees and disbursements, interest, penalties, judgment and amounts paid in settlement of any demand, action, suit, proceeding, assessment, judgment or settlement or compromise), including any Taxes payable in respect thereof, including the value or change in value of past, current or future required or expected deliveries of silver hereunder (including any decline in value of any silver that is not delivered when due), in connection with or in respect of any breach or default by the other Party.
“MAC” means Metals Acquisition Corp, a Cayman Islands exempted company.
“MAC Australia” means Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758), a company existing under the laws of Australia and its successors and permitted assigns.
“MAL” means Metals Acquisition Limited, a company incorporated under the laws of Jersey.
“Material Contracts” means, collectively, (i) each agreement set forth in Schedule E and any replacements thereof, (ii) any contract or agreement entered into by a Seller Group Entity and that is material to the construction, development, operation or ownership of the Mine or that would have an Adverse Impact if it was terminated or suspended or any party thereto failed to perform its obligations thereunder; and (iii) any document entered into for the purposes of varying, novating, supplementing, extending, replacing or restating any of the agreements referred to in above paragraphs (i) or (ii).
“ME Supply Contract” means the mobile equipment supply contract (supply of capital equipment and associated services) dated 30 June 2020 between Mount Isa Mines Limited ACN 009 661 447 (acting in its personal capacity and as agent for the Project Owner and Ernest Henry Mining Pty Ltd ACN 008 495 574) and Sandvik Mining and Construction Australia Pty Ltd ACN 003 771 382
“Merger” means the merger of MAC with and into MAL pursuant to Part 18B of the Companies (Jersey) Law 1991, as amended, and Part XVI of Companies Act (As Revised) of the Cayman Islands pursuant to which MAL continues as the surviving company and all undertaking, property and liabilities of MAC vest in MAL.
“Mezzanine Debt” means the subordinated term loan facility in the aggregate principal amount of US$135,000,000 pursuant to the Mezzanine Debt Facility Agreement.
“Mezzanine Debt Facility Agreement” means the loan note subscription agreement dated March 10, 2023 between MAL, MAC Australia as borrower the Seller as guarantors, Sprott Private Resource Lending II (Collector-2), LP, as mandated lead arranger and bookrunner and original lender, and Sprott Resource Lending Corp. as agent and security trustee.
“Mine” means the CSA Copper Mine located in Cobar Basin in New South Wales, Australia, which is comprised of and covers, inter alia, the Stream Properties and the other Project Assets.
“Mine Data” has the meaning set out in Schedule C.
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“Mine Plan” means, at any time, the comprehensive operating plan as described in the Initial Technical Report and including the primary life of mine financial assumptions as detailed in the Base Case Financial Model, as each may be amended or updated at such time in accordance with this Agreement.
“Mineral Facilities” means all buildings, improvements, structures, systems, fixtures, plant, machinery, tools and other personal property at any time used or intended for use in connection with or incidental to the exploration, mining, storage, transporting and processing of Minerals, and all facilities and infrastructure associated with the Project (including all Mineral Processing Facilities).
“Mineral Processing Facilities” means any crusher, mill, ore concentrator, processing plant, smelter, refinery or other processing facility owned or operated by any Seller Group Entity located on the Stream Properties and at which Minerals are processed.
“Minerals” means any and all ore and marketable metal bearing material or product in whatever form or state (including Produced Silver) that is mined, produced, extracted or otherwise recovered or derived from the Stream Properties, including any such material or product derived from any processing or reprocessing of any tailings, stockpiles, waste rock or other waste products originally derived from the Stream Properties, and including ore and any other products requiring further milling, processing, smelting, refining or other beneficiation of Minerals, including Saleable Products.
“Mining Properties” means all right, title and interest both present and future in, under or derived from:
| (a) | the Tenements, the Freehold Properties, the Project Leases and all other documentation and agreements under which a Seller PSA Entity or any Affiliate thereof derives the right to conduct mining or exploration for Minerals at the Mine or otherwise forming part of or used in connection with the Project, including the Stream Properties; |
| (b) | the Project Area, including any title to or interest in land in a Project Area now or at a later time held by any Seller PSA Entity or any Affiliate thereof; |
| (c) | all Authorisations in relation to the Project; and |
| (d) | all Mineral Facilities; |
whether any of the foregoing in above paragraphs (a), (b), (c) and (d) is acquired or obtained before or after the date of this Agreement.
“Mining Rights” means any mining claims, mining leases, mineral claims, mining concessions, mineral concessions, exploration permits or licenses, mining licenses, forms of mineral tenure or other rights to Minerals or to access and work upon lands, such as ownership and ancillary rights, surface rights, leasing agreements, lands temporal occupation agreements or otherwise, for the purpose of exploring, exploiting or benefiting Minerals, under the terms of Applicable Laws, whether contractual, statutory or otherwise, or any interest therein whether now owned or hereafter acquired, including the Principal Tenements. “Mining Rights” includes any amendments, relocations, adjustments, resurvey, additional locations, consolidation, derived rights or conversions of, or any renewal, replacement, amendment or other modification or extensions of any of the foregoing.
“Monthly Report” means a written report, in relation to any calendar month, in substantially the form attached as Schedule H detailing:
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| (a) | the tonnages and head grades of ore mined and tonnages of waste mined and tonnages and head grades of both the ore mined and stockpiled, from the Stream Properties during such calendar month; |
| (b) | the tonnages and grades of ore processed from the Stream Properties at the Mineral Processing Facilities during such calendar month; |
| (c) | with respect to any Mineral Processing Facilities, the types of Saleable Products produced, tonnages, weights and concentrate grades during such calendar month and the resulting recoveries, including the metallurgical balances for gravity circuit (if applicable), flotation of concentrate, CN leaching of concentrate or tailings, or any other process that results in Produced Silver; |
| (d) | the number of ounces of silver contained in the Saleable Product produced during such calendar month; |
| (e) | the weight and grade of any Saleable Product delivered or shipped offsite during such calendar month; |
| (f) | the weight and grade of any Saleable Product contained in any Offtaker Delivery during such calendar month; |
| (g) | the number of ounces of silver contained in each Offtaker Delivery in respect of which an Offtaker Payment was received during that calendar month, prior to any Offtaker Charges or payable rates; |
| (h) | the ounces of Payable Silver for that calendar month by Offtaker Delivery; |
| (i) | a reconciliation between (g) and (h), including details regarding payable rates and provisional percentages; |
| (j) | end of month stockpile of Saleable Product (tonnage, moisture content and grade) not yet subject to an Offtaker Delivery; |
| (k) | inventory of Saleable Product in process whether in solids or solution as well as the measured process plan stream silver grades and reported silver grades of process plant streams to the extent used in determining the metallurgical plant balance; |
| (l) | inventory for Saleable Product which has been delivered to an Offtaker, but for which an Offtaker Payment has not yet been made (or if made, no Refined Silver in respect thereof have yet been delivered to Purchaser); |
| (m) | a statement listing all invoices relating to Offtaker Payments, indicating whether provisional or final, and including (A) invoice number, (B) lot designation if applicable, (C) weights, (D) silver grades of any product, and (E) Payable Silver, received during such calendar month; |
| (n) | the most recent update to the forecast of production of silver or Payable Silver to the extent such forecast has been updated by any Seller Group Entity from the forecast most recently provided to Purchaser, and the related assumptions as set out in Section 5.1(2)(c) to the extent also updated; |
| (o) | details of the Offtake Agreements, specifying the type of product and annual quantity being sold to each Offtaker; such information to be provided whenever any new Offtake Agreement is entered into or whenever changes to any existing Offtake Agreement are made; |
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| (p) | the type as well as expected weight, expected silver grade of any product scheduled to be shipped in the following month along with the expected Offtaker Payment date; and |
| (q) | such other information in respect of silver as may be reasonably requested by Purchaser. |
“Native Title Claim” means any application, claim or entitlement, (whether arising by statute or otherwise) of any indigenous Person or traditional owner to any estate or interest in land by which that Person or owner is applying for or claiming or has that estate or interest in land because that Person is indigenous, is a traditional owner or otherwise has a relationship with the land including any application, claim, right or entitlement under the Native Title Act 1993 (Cth) or any analogous legislation.
“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, or any successor instrument, rule or policy.
“OFAC” means The Office of Foreign Assets Control of the US Department of the Treasury.
“Offtake Agreement” means the Glencore Offtake Agreement and any other agreement or contract entered into by a Seller Group Entity with an Offtaker, or pursuant to Applicable Law, or other arrangement or requirement, that relates in any way to: (i) the sale of Minerals to an Offtaker; (ii) the delivery of the entitlement to, or the benefit of, Minerals to an Offtaker; or (iii) the smelting, refining or other beneficiation of Minerals by an Offtaker for the benefit of a Seller Group Entity.
“Offtake Sales Documents” means such documents as are prepared or produced in connection with sale or transfer of Minerals to an Offtaker, including the provisional and final settlement sheets, provisional and final invoices, metals return statements, credit notes, bills of lading, and any and all certificates and other documentation prepared or produced for or by the relevant Offtaker, including certificates for final shipped moisture content and final analyses and assays evidencing the amount of Minerals, including the quantity of silver and any other metal contained therein, delivered to the Offtaker.
“Offtaker” means (i) any Person that is not a Seller Group Entity that purchases Minerals from a Seller Group Entity or is the recipient of the entitlement to, or benefit of, Minerals from a Seller Group Entity (including where a Governmental Authority levies a Tax payable by way of delivery of Minerals or otherwise obtains Minerals from a Seller Group Entity); or (ii) any Person that takes delivery of Minerals for the purpose of smelting, refining or other beneficiation of such Minerals for the benefit of a Seller Group Entity.
“Offtaker Charges” means any refining charges, treatment charges, penalties, insurance charges, transportation charges, settlement charges, weight franchise charges, financing charges or price participation charges, royalties or royalty type payments, or other charges, penalties or deductions that may be charged or levied by an Offtaker, regardless of whether such charges, penalties or deductions are expressed as a specific metal deduction, as a recovery rate, a percentage or otherwise.
“Offtaker Delivery” means (i) with respect to the period commencing after the Closing Date, the delivery of Minerals to an Offtaker or the transfer of the entitlement to or benefit of Minerals to an Offtaker, and (ii) with respect to any period commencing on the Effective Date and ending on the Closing Date, the delivery of Minerals to an offtaker or processor or the transfer of the entitlement to or benefit of Minerals to an offtaker or processor. For greater certainty, Offtaker Delivery shall not include any deliveries of Minerals to Persons subsequent to the first Offtaker (or other offtaker or processor) acquiring such Minerals.
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“Offtaker Payment” means (i) with respect to (A) Minerals purchased by an Offtaker from a Seller Group Entity, or (B) Minerals the entitlement to, or benefit of which, is received by an Offtaker from a Seller Group Entity, the receipt from and after the Effective Date by a Seller Group Entity of payment or other consideration (including any silver credits) from the Offtaker in respect of any Minerals, or if no such consideration is applicable, the delivery of the Minerals (or ownership of the Minerals) to such Offtaker (or to the direction of such Offtaker); (ii) with respect to Minerals refined, smelted or otherwise beneficiated by an Offtaker on behalf of a Seller Group Entity, the receipt from and after the Effective Date by a Seller Group Entity of any Refined Silver in accordance with the applicable Offtake Agreement; and (iii) with respect to any period commencing on the Effective Date and ending on the Closing Date, the receipt by any Person of payment, Refined Silver or other consideration (including any silver credits) from an offtaker or processor in respect of any Minerals (A) purchased by an offtaker, or processor (B) entitlement to, or benefit of which, is received by an offtaker or processor, or (C) which are refined, smelted or otherwise beneficiated by an offtaker or processor on behalf of such Person. .
“Original Financial Statements” means:
| (a) | in relation to the Project Owner, its audited financial statements for the financial years ended 31 December 2020, 31 December 2021 and 31 December 2022; and |
| (b) | in relation to MAC, its audited financial statements for its financial years ended 31 December 2020, 31 December 2021 and 31 December 2022. |
“Other Minerals” means ores or other minerals mined, produced, extracted or otherwise recovered from properties that are not one of or do not constitute part of the Stream Properties, whether such properties are owned by Seller Group Entities or otherwise.
“Parties” means the parties to this Agreement.
“Payable Silver” means 90% of the Produced Silver (prior to any deduction in respect of any Offtaker Charges) contained in any Offtaker Delivery.
"Perfection Requirements” means the making or procuring of the appropriate perfection, stamping, endorsements, notarisations, notifications, Authorisations and registration requirements of or with respect to the Transaction Security Documents and or the security interest created under them.
"Permitted Disposal” means any sale, lease, licence, bailment, transfer or other disposal (a “Disposal”) which is on arm’s length terms:
| (a) | of Minerals by the Project Owner to an Offtaker pursuant to an Offtake Agreement; |
| (b) | of assets (other than Equity Securities or Mining Properties) by the Project Owner in exchange for other assets comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash); |
| (c) | of Immaterial Mining Properties by the Project Owner; |
| (d) | of Cash Equivalent Investments for cash or in exchange for other Cash Equivalent Investments; |
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| (e) | of equipment by the Project Owner, in connection with, or for the purpose of, such assets then continuing to be used by the Project Owner under a lease back or hire purchase contract, so long as the net book value (when aggregated with the net book value of all such Disposals) does not exceed US$30,000,000 (or its equivalent) in total; |
| (f) | with Purchaser’s prior written consent, |
so long as, in each case, no Event of Default is subsisting on the date of such Disposal or would occur as a result of such disposal, and such Disposal would not have, or could not reasonable be expected to have, an Adverse Effect.
“Permitted Encumbrances” means:
| (a) | any lien arising by operation of law and in the ordinary course of trading so long as the debt it secures is paid when due or contested in good faith and appropriately provisioned; |
| (b) | any reservations, or exceptions contained in the original grants of land or by applicable statute or the terms of any lease in respect of any Mining Properties, or comprising the Mining Properties which do not materially detract from the value of, or materially impair the use of, the Mining Properties for the purpose of conducting and carrying out mining operations thereon; |
| (c) | minor discrepancies in the legal description or acreage of or associated with the Mining Properties or any adjoining properties which would be disclosed in an up to date survey and any pre-existing registered easements and pre-existing registered restrictions or pre-existing covenants that run with the land, in either case which do not materially detract from the value of, or materially impair the use of, the Mining Properties for the purpose of conducting and carrying out mining operations thereon; |
| (d) | Encumbrances on cash and Cash Equivalent Investments granted by a Seller PSA Entity to a Governmental Authority to secure performance of statutory obligations or regulatory requirements (including reclamation obligations) under Applicable Law; |
| (e) | rights of way for, or reservations of rights of others for, sewers, water lines, gas lines, electric lines, telegraph and telephone lines, and other similar utilities, or zoning by-laws, ordinances, surface access rights or other restrictions as to the use of the mining licenses comprising the Project Assets, which do not in the aggregate materially detract from the use of such mining licenses for the purpose of conducting and carrying out mining operations thereon; |
| (f) | any rights of expropriation, access or user or other similar such rights conferred or vested on public authorities, provided they are not exercised against any Seller PSA Entity or its assets, or if exercised, do not materially detract from the value; |
| (g) | any Encumbrance arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to the Project Owner in the ordinary course of trading and on the supplier's standard or usual terms (or on terms more favourable to the Project Owner) so long as any such Encumbrance is limited to the specific asset that has been acquired, the debt it secures is paid when due or contested in good faith and sufficient reserves of liquid assets have been set aside to pay the debt if the contest is unsuccessful; |
| (h) | any Encumbrance arising as a consequence of any leases or hire purchase contracts (constituting Financial Indebtedness under paragraph (d) of that definition) of vehicles, plant, equipment or computers permitted under paragraph (k) of the definition of Permitted Indebtedness and only over the asset being financed, or otherwise any PPS Lease (as defined in the PPSA) provided for by a transaction which does not secure payment or performance of an obligation; |
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| (i) | Encumbrances on cash and Cash Equivalent Investments granted by the Project Owner to a public utility or any municipality or governmental or other public authority when required by such utility or municipality or other authority in connection with the operations of the Project Owner, all in the ordinary course of its business; |
| (j) | any netting or set-off arrangement entered into by any Seller PSA Entity in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of Seller PSA Entities and credit balances of Seller Group Entities; |
| (k) | any payment or close out netting or set-off arrangement under any transactional banking facilities or any Derivative Transaction or foreign exchange transaction entered into by a Seller PSA Entity which constitutes Permitted Indebtedness, excluding any Encumbrance under a credit support arrangement; |
| (l) | any contractual right of set-off, other than in respect of Financial Indebtedness, pursuant to a contract entered into in the ordinary course of business; |
| (m) | any Encumbrance already subsisting but not legally possible or reasonably feasible to be discharged and listed as ‘Existing Security’ on Schedule M, except to the extent the principal amount secured by it exceeds the amount listed with respect to that Encumbrance in Schedule M; |
| (n) | any Encumbrance listed as ‘Existing Security’ on Schedule M, including any replacement Encumbrance upon any successive refinancing thereof, so long as the Financial Indebtedness secured thereby is Permitted Indebtedness; |
| (o) | the Glencore Royalty; |
| (p) | any Encumbrance on Project Assets granted to a provider of Permitted Secured Debt, provided that any such provider shall have entered into the Intercreditor Deed or other intercreditor agreement in form and substance satisfactory to Purchaser; and |
| (q) | any Encumbrance created with Purchaser’s prior written consent. |
“Permitted Indebtedness” means any of the following Financial Indebtedness:
| (a) | Permitted Secured Debt; |
| (b) | Financial Indebtedness incurred under the Glencore Royalty Deed and the Material Contracts, including in respect of the SSA, any future or contingent consideration payable under it; |
| (c) | equipment financing incurred by Project Owner provided that the provider of such equipment financing is limited in recourse to the equipment financed or supplied by such provider and all such Financial Indebtedness owed to any such provider is secured only by charges on the underlying equipment; |
| (d) | Financial Indebtedness incurred by Project Owner in respect of surety or completion bonds, standby letters of credit or letters of guarantee securing mine closure, asset retirement and environmental reclamation obligations of Project Owner to the extent required by Applicable Laws or Governmental Authority; |
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| (e) | any unsecured Financial Indebtedness under any agreement entered into by the Project Owner in the ordinary course of its business for the acquisition of any asset or service where payment for the asset or service is deferred for a period of not more than 90 days; |
| (f) | arising under a foreign exchange transaction entered into by the Project Owner or MAC Australia for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade, but not a foreign exchange transaction for investment or speculative purposes; |
| (g) | Subordinated Intercompany Debt; |
| (h) | Financial Indebtedness of Project Owner under working capital facilities with commercial banks or other customary capital providers for the mining sector (which shall not include any hedge or distressed debt funds) in an aggregate amount not to exceed US$25 million (or its equivalent); |
| (i) | indebtedness of the Seller PSA Entities related to a corporate credit card facility, provided that the aggregate amount of all such Indebtedness does not exceed US$250,000 (or its equivalent) at any time; |
| (j) | Financial Indebtedness arising under Approved Hedging; |
| (k) | under leases and hire purchase contracts entered into by the Project Owner constituting Financial Indebtedness under paragraph (d) of that definition of vehicles, plant, equipment or computers, so long as the aggregate capital value of all such items so leased under outstanding leases by the Project Owner does not exceed US$30,000,000 (or its equivalent in any other currency or currencies) at any time; and |
| (l) | any other Financial Indebtedness incurred with Purchaser’s prior written consent, |
so long as, in each case, no Event of Default is subsisting on the date such Financial Indebtedness is incurred or would occur as a result of the incurrence of such Financial Indebtedness.
"Permitted Loan” means:
| (a) | any loans, refundable deposits, advance payments or trade credit extended by the Project Owner to its customers on normal commercial terms and in the ordinary course of its trading activities; and |
| (b) | any loan made with Purchaser’s prior written consent. |
“Permitted Secured Debt” means any of the following Financial Indebtedness or other obligations which in each case is secured by Encumbrances against some or all of the assets of a Seller PSA Entity:
| (a) | Financial Indebtedness of up to US$230 million pursuant to the Senior Project Acquisition Facility secured by Encumbrances on the Collateral and any refinancing, replacement or renewal of such Financial Indebtedness provided that each condition in clause 6.2 of the Intercreditor Deed is satisfied (or waived by Purchaser in its sole discretion); |
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| (b) | so long as it is in accordance with the Approved Hedging Programme – Project Chariot 2023 provided to Purchaser prior to the Closing Date, as amended from time to time in accordance with the Senior Facility Agreement, Financial Indebtedness arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade or under a Derivative Transaction in respect of copper production of the Project Owner for the first three years following the Closing Date, but not a foreign exchange transaction or any other Derivative Transaction for investment or speculative purposes, in each case to the extent provided by some or all of the lenders under the Senior Project Acquisition Facility and secured by Encumbrances on the Collateral and any replacement of such hedging provided by lenders under the Senior Project Acquisition Facility or with lenders of any Financial Indebtedness refinancing, replacing or renewing the Senior Project Acquisition Facility in accordance with the above paragraph (a) (the “Approved Hedging”); |
| (c) | Financial Indebtedness of up to US$135 million pursuant to the Mezzanine Debt secured by Encumbrances on the Collateral and any refinancing, replacement or renewal of such Financial Indebtedness provided that each condition in clause 6.3 of the Intercreditor Deed is satisfied (or waived by Purchaser in its sole discretion); |
| (d) | Financial Indebtedness of up to A$40 million secured only by Encumbrances on the Collateral, which is used solely for the purpose of third party letter of credit financing where the letters of credit issued thereunder are used to provide performance guarantees required by Applicable Laws or the Government of New South Wales securing mine closure, asset retirement and environmental obligations of the Project Owner in connection with the Mine and other financial guarantees in relation to the Acquisition Transaction provided by lenders under the Senior Project Acquisition Facility or with lenders of any Financial Indebtedness refinancing, replacing or renewing the Senior Project Acquisition Facility in accordance with the above paragraph (a); and |
| (e) | the Copper Stream Obligations and the Silver Stream Obligations. |
“Permitted Transaction” means:
| (a) | a dual listing by Seller on the Australian Securities Exchange and the issue of any Equity Securities by Seller in connection with that listing or any other equity raise; |
| (b) | the raising of any equity in connection with the Acquisition Transaction and any restructure, redemption or other matters undertaken in connection with the Acquisition Transaction associated with Seller’s listing on the New York Stock Exchange (NYSE) subject to any such restructure and redemptions having been completed before the Closing Date; or |
| (c) | the Merger. |
“Person” means and includes a Party, individuals, corporations, bodies corporate, limited or general partnerships, joint stock companies, limited liability corporations, joint ventures, associations, companies, trusts, banks, trust companies, Governmental Authority or any other type of organization, whether or not a legal entity.
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“PIPE Subscription Agreement” means the agreement to be entered into on or around the Signing Date by Purchaser and Seller whereby Purchaser has agreed to subscribe for the Subscription Amount worth of common stock in Seller at the same price per share as the new equity raised by Seller to complete the Acquisition Transaction, as referred to in paragraph (b) of the definition of Permitted Transaction.
"PPSA" means the Personal Property Securities Act 2009 (Cth).
“PPX Supply Contract” means the supply contract (supply of PPX parts, GET, drilling consumables, services and other items) dated on or around 1 October 2020 between Mount Isa Mines Limited ACN 009 661 447 (in its personal capacity and acting as agent for the Project Owner and Ernest Henry Mining Pty Ltd ACN 008 495 574) and Sandvik Mining and Construction Australia Pty Ltd ACN 003 771 382.
“Principal Tenements” means, collectively, (i) Consolidated Mining Lease No. 5 (CML5), Mining Purpose Lease 1093 (MPL 1093) and Mining Purpose Lease 1094 (MPL 1094) and (ii) Exploration Lease 5693 (EL 5693), Exploration Lease 5983 (EL 5983), Exploration Lease 6907 (EL 6907), Exploration Lease 6223 (EL 6223) and Exploration Lease (Application) 6565 (and any resulting tenement arising from it).
“Proceeds Account” means, collectively, the accounts held with the Initial Account Bank and styled “AUD Proceeds Account” and “USD Proceeds Account” and any replacement bank accounts with a replacement account bank that is an Acceptable Bank and acceptable to Purchaser and agreed between MAC Australia and Purchaser to be a Proceeds Account.
“Produced Silver” means any and all silver in whatever form or state that is mined, produced, extracted or otherwise recovered from the Stream Properties, including:
| (a) | any silver derived from any processing or reprocessing of any tailings, waste rock or other waste products originally derived from the Stream Properties; and |
| (b) | silver contained in any ore or other products resulting from the further milling, processing or other beneficiation of Minerals originally mined, produced, extracted or otherwise recovered or derived from the Stream Properties, including Saleable Products. |
“Project” means:
| (a) | the management, operation, maintenance, repair and expansion of the Mine; and |
| (b) | the extraction, production, recovery, sale, transportation, storage, processing and delivery of copper, silver and by product metals in concentrate. |
“Project Area” means the area the subject of the Tenements, the Freehold Properties and the Project Leases.
“Project Assets” means all the right, title and interest both present and future of the Seller PSA Entities which is attributable to the Project and includes all the right, title and interest both present and future of the Seller PSA Entities in, to, under or derived from:
| (a) | the Mining Properties; |
| (b) | the Minerals; |
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| (c) | the mining, processing, development, production, maintenance, administration, water, electrical and conveyor facilities (including the Mineral Processing Facilities), railway infrastructure and rolling stock, storage facilities, stockpiling facilities, shipping infrastructure, utilities, and related ancillary infrastructure, other buildings, structures, improvements, fixtures and other real and personal property, including equipment, re-commissioned, constructed, operated or otherwise used by or on behalf of any Seller Group Entity to extract, beneficiate, market, transport and sell Minerals derived from the Mining Properties or to develop, operate or administer the Mining Properties, whether or not located within the physical boundaries of the Mining Properties; |
| (d) | all Authorisations or other rights (including surface, access and water rights), lease, licence, easement, right of way, privileges, concessions or franchises owned, controlled, leased, operated or held by or on behalf of any Seller Group Entity at any time in relation to the Mining Properties; |
| (e) | the Material Contracts and any other contract, agreement which related to the development, operation or maintenance of the Mining Properties, or to the mining production, transportation, storage, treatment, processing or marketing of Minerals; |
| (f) | any other present and after-acquired real or personal property used or acquired for use by any Seller Group Entity in connection with the Mining Properties; and |
| (g) | all exploration and mining information, documents, maps, reports, records, studies and other written data, including all data stored on magnetic tapes, disks or diskettes or any other computer storage media, relating to geological, geochemical and geophysical work, feasibility studies and other operations conducted with respect to the Project. |
“Project Leases” means each perpetual land lease held by the Project Owner listed in Part III of Schedule A and any additional or replacement lease used or to be used in connection with the Project.
“Project Owner” means Cobar Management Pty Limited, a company existing under the laws of New South Wales, or any transferee of the Stream Properties as permitted pursuant to this Agreement, and their respective successors and permitted assigns, and “Project Owner” means any of them.
“Project Owner Guarantee” has the meaning set out in Section 7.1(3).
“Project Owner Security Agreements” has the meaning set out in Section 7.1(4).
“Project Owner Whitewash Documentation” has the meaning set out in Schedule L.
“Purchaser” means Osisko Bermuda Limited, an exempted company existing under the laws of Bermuda, and its successors and assigns.
"Quarter End Date” means each of 31 March, 30 June, 30 September and 31 December or if any such date is not a Business Day, the preceding Business Day.
“Rate of Exchange” has the meaning set out in Section 10.6.
“Receiving Party” has the meaning set out in Section 5.6(1).
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“Refined Silver” means marketable metal bearing material in the form of silver that is refined by an accredited refiner that is on the LBMA’s Good Delivery List to a minimum 999 parts per 1,000 fine silver and that otherwise meets the LBMA’s Good Delivery Rules.
“Related Party Transaction” means any transaction or agreement (whether by written agreement or otherwise) between a Seller PSA Entity and one or more Seller Group Entities, including any Financial Indebtedness, service agreement or management agreement.
“Relevant Breach” has the meaning set out in Section 6.18(3).
“Relevant Jurisdictions” has the meaning set out in Schedule K.
“Reserve Tail Ratio” means the ratio expressed as a percentage of:
| (a) | the projected remaining proven and probable copper Reserves as from the latest maturity date of any and all Permitted Secured Debt referred to in paragraph (a) and (c) of the definition thereof to the forecast end of the mine life for the Project; and |
| (b) | the projected remaining proven and probable copper Reserves as from the Closing Date to the forecast end of the mine life of the Project, |
as included in the relevant updated Reserves Statement (taking into account the projected future production set out in the most recently delivered updated Base Case Financial Model).
“Reserves” means proven and probable reserves as defined and incorporated under NI 43-101 or JORC Code, as applicable.
“Reserves Statement” means a statement of Reserves in relation to the Project.
“Resources” means measured, indicated and inferred resources as defined and incorporated under NI 43-101 or JORC Code, as applicable.
“Resources Statement” means a statement of Resources in relation to the Project.
“ROFR Interest” has the meaning set out in Section 6.14(1).
“ROFR Offer” has the meaning set out in Section 6.14(1).
“Saleable Products” means any concentrates, precipitates, doré, bullion, carbon fines, slag or other product or material that contains marketable metals or in respect of which an Offtaker Payment is expected.
“Sanctioned Person” means any Person that (i) is, or is owned or controlled, either directly or indirectly, by, or is otherwise acting on behalf of a Person that is the subject of any Sanctions; or (ii) part of, controlled by, or owned by the government, or any agency or instrumentality of the government, of a Comprehensively Sanctioned Country or Territory.
“Sanctions” means any trade, economic or financial sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty's Treasury, the Australian Department of Foreign Affairs and Trade, the Jersey Minister for External Relations, the New Zealand Ministry of Foreign Affairs and Trade, the Hong Kong Commerce, Industry and Tourism Branch of the Commerce and Economic Development Bureau, the Monetary Authority of Singapore, the Ministry of Finance Japan, the Governor in Council (Canada), Global Affairs Canada or Public Safety Canada.
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“Security” means the charges and security interests granted in favour of Purchaser pursuant to the Silver Stream Security Documents, including any "security interest" as defined in sections 12(1) or (2) of the PPSA.
“Security Agreements” means, collectively, the Holdco Security Agreements, the Seller Security Agreements and the Project Owner Security Agreements.
“Seller” means (i) prior to completion of the Merger, collectively, MAL and MAC, and (ii) following completion of the Merger, MAL as the surviving company and its successors and permitted assigns.
“Seller Group Entities” means the Seller PSA Entities and each of their respective Affiliates.
“Seller PSA Entities” means prior to the Whitewash Completion Date, Seller and MAC Australia, and immediately following the Whitewash Completion Date, Seller, MAC Australia and the Project Owner.
“Seller PSA Entities Whitewash Documentation” has the meaning set out in Schedule L.
“Seller Security Agreements” has the meaning set out in Section 7.1(2).
“Senior Facility Agreement” means the syndicated facility agreement dated February 28, 2023 between the Seller, MAC Australia, Citibank N.A., Sydney Branch and Bank of Montreal as mandated lead arrangers and bookrunners Citibank N.A. Sydney Branch as initial account bank, the lenders party thereto and Citisecurities Limited as agent.
“Senior Project Acquisition Facility” means the senior secured credit facility consisting of up to a US$205 million term loan facility and a US$25 million revolving working capital facility made available to MAC Australia pursuant to the Senior Facility Agreement, the proceeds of which will be used to acquire the Project Owner pursuant to the Acquisition Transaction.
“Senior Security Trust Deed” means the deed entitled “Security Trust Deed” to be dated before the Closing Date and made between, among others, the Seller PSA Entities and the Senior Security Trustee.
“Senior Security Trustee” has the meaning given to it in the Intercreditor Deed.
“Shiploader Agreement” means the Newcastle shiploader services agreement dated on or about January 2014 as varied on 30 August 2021 between the Project Owner and Aurizon Port Services Pty Ltd ACN 103 570 181 (formerly Conports Pty Ltd).
“Signing Date” has the meaning set out in the preamble to this Agreement.
“Silver Cash Price” means 4% of the Silver Market Price.
“Silver Market Price” means, with respect to any day, the per ounce LBMA Silver Price as quoted in US dollars by the LBMA for Refined Silver on such day or the immediately preceding trading day if such day is not a trading day; provided that, if for any reason the LBMA is no longer in operation or if the price of Refined Silver is not calculated on behalf of or confirmed, acknowledged by, or quoted by the LBMA, the Silver Market Price shall be determined in the manner endorsed by the LBMA, failing which the Silver Market Price will be determined by reference to the price of Refined Silver on another commodity exchange satisfactory to Purchaser, acting reasonably.
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“Silver Purchase Agreement” means the silver purchase agreement dated as of the date hereof between Purchaser as purchaser, Seller as seller, MAC Australia as a seller psa entity and upon completion of the Whitewash Procedures, the Project Owner as a seller psa entity and project owner.
“Silver Purchase Price” has the meaning set out in Section 2.5(1).
“Silver Stream Documents” means, collectively, this Agreement, the Guarantees, the Silver Stream Security Documents, the Intercreditor Deed, the Accession Agreement, the Acknowledgement, the Subordination Deed, the Tripartite Deeds, the Consent Deeds, the Account Bank Agreement and each other agreement, document, instrument or certificate delivered for the benefit of Purchaser pursuant to or otherwise in connection with any of this Agreement, the Guarantees, the Silver Stream Security Documents, the Intercreditor Deed, the Accession Agreement, the Acknowledgement, the Subordination Deed, the Tripartite Deeds, the Consent Deeds and any other agreement designated from time to time by Purchaser and Seller as a “Silver Stream Document” for purposes of the Guarantees and the Silver Stream Security Documents.
“Silver Stream Obligations” means all indebtedness, liabilities and other obligations, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time or from time to time due or accruing due and owing by or otherwise payable or to be performed by any Seller Group Entity to Purchaser under, in connection with or pursuant to the Silver Stream Documents.
“Silver Stream Security Documents” means, collectively, the agreements itemized in Part I of Schedule G and all other assignments, deeds of trust, mortgages, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants to Purchaser mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the Silver Stream Obligations and “Silver Stream Security Document” means any of the Silver Stream Security Documents
“SIJL” means the Security Interests (Jersey) Law 2012.
“SIR” means the security interest register maintained under Part 8 of the SIJL.
“SSA” means the CMPL share sale agreement dated March 17, 2022 between Seller, MAC Australia and Glencore Operations Australia Pty Limited in respect of the acquisition of 100% of the issued share capital in the Project Owner by MAC Australia, as amended by the Deed of Amendment, Consent and Covenant dated as of November 22, 2022.
“Stream NPV” has the meaning set out in Section 9.3(4).
“Stream Properties” means:
| (a) | the real property, Mining Rights, tenements, concessions and other similar interests listed or described in Part I of Schedule A or otherwise forming part of or used in connection with the Project Assets and including, for the avoidance of doubt, the Principal Tenements; |
| (b) | whether created privately or through the actions of any Governmental Authority, any right, title or interest in any real property, mining right, tenement, concession, contract and other similar interest held by a Seller Group Entity in, to, under or over all or any portion of the area covered by any of the foregoing detailed in (a); and |
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| (c) | any present or future renewals, extensions, modifications, divisions, substitutions, amalgamations, successions, derivations, severances, conversions, demise to lease, renaming or variation of any of the foregoing detailed in (a) or (b); |
whether any of the foregoing is acquired or obtained before or after the date of this Agreement, and including all plants, buildings, structures, improvements, appurtenances and fixtures located thereon or thereunder.
“Subordinated Intercompany Debt” means unsecured loans made solely among one or more Seller PSA Entities, provided that such Financial Indebtedness shall be subordinated pursuant to a Subordination Deed.
“Subordination Deed” means:
| (a) | a subordination deed between each subordinate lender, Purchaser and relevant debtor pursuant to which, among other things, each holder of Subordinated Intercompany Debt and other Seller Group Entity party to a Related Party Transaction with a Seller PSA Entity agrees as subordinate lender (i) to subordinate and postpone any indebtedness owing to it by a Seller PSA Entity to the Silver Stream Obligations, (ii) that no principal, interest or other amounts in respect of such indebtedness will be payable except to the extent it is permitted pursuant to Section 6.12, (iii) that no Encumbrances have been or will be taken by the holder of such indebtedness, (iv) that no remedies will be exercised by the holder of such indebtedness while any Silver Stream Obligations remain outstanding, and (v) that in connection with any Insolvency Event of Default, the holder of such indebtedness will not vote its claim in respect thereof in any manner that would prejudice Purchaser’s rights and remedies under this Agreement or any of the Silver Stream Security Documents, and otherwise in form and substance satisfactory to Purchaser; or |
| (b) | such other intercreditor or subordination agreement between, among others, each such subordinate lender and debtor and Purchaser in substantially the same scope as the subordination deed referred to in above paragraph (a) and otherwise in form and substance satisfactory to Purchaser, noting that this may result in the Intercreditor Deed (so long as it remains in effect) being the Subordination Deed. |
“Subordination of Claims Letter” means the letter dated prior to the Closing Date between, among others, MAC and Purchaser. in respect of claims under certain due diligence reports.
"Subscription Amount” means US$15,000,000.
“Subsidiary” means, with respect to any Person, any other Person which is, directly or indirectly, controlled by that Person.
“Tax” or “Taxes” means all present or future taxes, rates, levies, royalties, imposts, duties, deductions, assessments, withholdings, dues, fees and other charges of any nature, including any interest, fines, penalties or other liabilities with respect thereto, imposed, levied, collected, withheld or assessed by any Governmental Authority (of any jurisdiction), and whether disputed or not, including sales or value-added taxes, goods and services taxes, stamp taxes and royalties.
“Tax Act” means the Income Tax Assessment Act 1936 (Cth).
“Tax Consolidated Group” means a Consolidated Group or an MEC Group as defined in the Income Tax Assessment Act 1997 (Cth).
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“Tax Funding Agreement” means a tax funding agreement between the members of a Tax Consolidated Group which includes:
| (a) | reasonably appropriate arrangements for the funding of Tax payments by the "Head Company" (as defined in the Tax Act) having regard to the position of each member of the Tax Consolidated Group; |
| (b) | an undertaking from each member of the Tax Consolidated Group to compensate each other member adequately for loss of Tax attributes (including Tax losses and Tax offsets) as a result of being a member of the Tax Consolidated Group; and |
| (c) | an undertaking from the "Head Company" (as defined in the Tax Act) to pay all group liabilities (as described in section 721 10 of the Tax Act) of the Consolidated Group before the members of the Tax Consolidated Group make any payments to the "Head Company" (as defined in the Tax Act) under the agreement. |
“Tax Sharing Agreement” means any agreement that satisfies the requirements of section 721 25 of the Tax Act for being a valid tax sharing agreement.
“Technical Report” means a technical report prepared in accordance with NI 43-101, the JORC Code or any other comparable foreign mineral disclosure code.
“Tenements” means:
| (a) | the Principal Tenements; |
| (b) | each tenement acquired by a Seller PSA Entity or any Affiliate thereof after the date of this Agreement which is related to the Project, or is in respect of an area adjacent to an existing Tenement; |
| (c) | each other tenement held by a Seller PSA Entity or any Affiliate thereof which is required for the Project in accordance with the then current Mine Plan; |
| (d) | each present or future interest from time to time held by or on behalf of an Seller PSA Entity or any Affiliate thereof in any present or future right, lease, licence, claim, permit or other authority which confers or may confer a right to prospect or explore for or mine any metals or minerals in any part of the area covered by the tenements referred to in paragraphs (a) to (c) of this definition; |
| (e) | each present or future renewal, replacement, extension, modification, amendment, substitution, conversion, amalgamation, relocation, adjustment, resurvey, additional location, consolidation, derived right or variation of any of the mineral rights described above (whether extending over the same or a greater or lesser area); |
| (f) | each present or future application for or an interest in any of the above which confers or which, when granted, will confer the same or similar rights in relation to the Project; and |
| (g) | each other tenement Purchaser and Seller agree in writing to be a Tenement or the agent under the Senior Project Acquisition Facility and MAC Australia agree in writing to be a Tenement. |
“Term SOFR” means the greater of (i) Term SOFR reference rate for a 3-month term published two Business Days prior to the first day of such term (the “Reference Business Day”), as such rate is published by the CME Group Benchmark Administration Limited (or a successor administrator of that reference rate), provided however that if such reference rate for such tenor has not been published on the Reference Business Day, then Term SOFR will be the Term SOFR reference rate for such tenor as published by CME Group Benchmark Administration Limited (or a successor administrator of that reference rate) on the first preceding Business Day for which such reference rate was published so long as such first preceding Business Day is not more than three Business Days prior to the Reference Business Day; and (ii) 2.00% per annum.
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“Third Party Agreement” has the meaning set out in Section 6.14(4).
“Third Party Offer” has the meaning set out in Section 6.14(1).
“Time of Delivery” has the meaning set out in Section 2.3(2).
“Total Net Debt” means, in relation to MAC Australia and its Subsidiaries, the sum of the following items (as stated on MAC Australia’s financial statements):
| (a) | the consolidated Financial Indebtedness of MAC Australia and its Subsidiaries; |
(i) including any liabilities related to:
| (A) | the Mezzanine Debt; |
| (B) | the Senior Project Acquisition Facility; |
| (C) | the Copper Stream Obligations; and |
| (ii) | excluding any liabilities related to: |
| (A) | unrealized Derivative Transactions; |
| (B) | the Silver Stream Obligations; |
| (C) | the Glencore Royalty; |
| (D) | (1) so long as any Financial Indebtedness remains outstanding under Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof, any other subordinated loans referred to or permitted under the Senior Facility Agreement or Mezzanine Debt Facility Agreement, or (2), after indefeasible payment in full of Permitted Secured Debt referred to in paragraphs (a) and (c) of the definition thereof, Subordinated Intercompany Debt; |
less
| (b) | Available Cash and Cash Equivalent Investments. |
“Transaction Documents” means, collectively, the Acquisition Finance Documents and the Material Contracts.
“Transaction Security Documents” means, collectively, (i) the Silver Stream Security Documents, (ii) the agreements itemized in Part II of Schedule G, and (iii) all other assignments, deeds of trust, mortgages, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the obligations under the Acquisition Finance Documents (other than the Silver Stream Obligations) or any Permitted Secured Debt refinancing, replacing or renewing the Senior Project Acquisition Facility or Mezzanine Debt and “Transaction Security Document” means any of the Transaction Security Documents
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“Transfer” means to sell, transfer, assign, convey, dispose or otherwise grant a right, title or interest (including a joint venture interest or an expropriation or other Transfer required or imposed by law or any Governmental Authority, whether voluntary or involuntary), or to abandon, surrender or otherwise relinquish a right, title or interest.
“Trigger Event” means any Event of Default, or any event or circumstance which, with notice, the passage of time or both, would constitute an Event of Default or a material default under the terms of any Material Contract or agreement relating to any Financial Indebtedness.
“Tripartite Deed” means:
| (a) | each tripartite deed to be granted in respect of the following Material Contracts: |
| (i) | Glencore Offtake Agreement; |
| (ii) | the Transitional Services Agreement; |
| (iii) | the SSA; |
| (iv) | the Shiploader Agreement; |
| (v) | the Haulage Agreement; |
| (vi) | the Cobar Terminal Services Agreement; |
| (vii) | the Cooling Plant Agreement; |
| (viii) | the Ventilation Construction Agreement; |
| (b) | each Consent Deed; and |
| (c) | any consent letter or side agreement made or to be made between a Seller PSA Entity, Purchaser and a counterparty to a Material Contract in relation to that Material Contract in accordance with Section 6,8(3). |
“Transitional Services Agreement” means the transitional services agreement dated before Completion to be entered into between Seller, the Project Owner and a Glencore Group entity.
“Uncredited Deposit” means, at any time, the Deposit, less the aggregate amount (if any) that has been credited against the Uncredited Deposit in accordance with Section 2.5; provided that in no event will the Uncredited Deposit be less than nil.
“Vendor” has the meaning set out in Section 6.14(1).
“Ventilation Construction Agreement” means the construction agreement (cooling turnkey solution)" dated 1 September 2021 between the Project Owner and Gordon Brothers Industries (Pty) Ltd ACN 160 126 456.
“Water License” means each water access licence listed in Part IV of Schedule A and any additional or replacement licence, permit or authorisation in respect of water used or to be used in connection with the Project.
“Whitewash Completion Date” means the date that is 30 days following the Closing Date or such later date agreed to by Purchaser in its sole discretion.
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“Whitewash Procedure” means the compliance procedure set out in section 260A of the Corporations Act to be undertaken by the Seller Group Entities in connection with the transactions contemplated by this Agreement and the Acquisition Transaction.
Section 1.2 Other Rules of Interpretation
| (1) | Except as may be otherwise specifically provided in this Agreement and unless the context otherwise requires, the Parties agree that (i) the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof; (ii) references to an “Article”, “Section”, “clause” or “Schedule” followed by a number or letter refer to the specified Article, Section or clause of or Schedule to this Agreement; (iii) headings of Articles and Sections are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement (iv) where the word “including” or “includes” is used in this Agreement, it means “including without limitation” or “includes without limitation”; (v) all references to “ounces” as a measure of mass in this Agreement are to troy ounces; (vi) the language used in this Agreement is the language chosen by the Parties to express their mutual intent; (vii) unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders; (viii) a reference to a statute includes all regulations made pursuant to and rules promulgated under such statute and, unless otherwise specified, any reference to a statute or regulation includes the provisions of any statute or regulation which amends, supplements or supersedes any such statute or any such regulation from time to time; (ix) except where the context otherwise requires, all references to agreements (including this Agreement) and other contractual instruments shall be deemed to be a reference to such agreement or instrument as it may be amended, modified, restated, amended and restated, supplemented or extended from time to time; (x) time is of the essence in the performance of the Parties’ respective obligations under this Agreement; (xi) all statements or references to dollar amounts in this Agreement are to US dollars; (xii) any rule of construction to the effect that any ambiguity is to be resolved against the drafting Party shall not be applicable in the interpretation of this Agreement; (xiii) references to “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; and (xiv) certain amounts and figures are subject to adjustment in accordance with Clause 2A.2. |
| (2) | Where this Agreement specifies an amount in a given currency (the specified currency) “or its equivalent”, the “equivalent” is a reference to the amount of any other currency which, when converted into the specified currency utilising any publicly available spot rate of exchange selected by Purchaser (acting reasonably)) for the purchase of the specified currency with that other currency at or about 11:00am on the relevant date, is equal to the relevant amount in the specified currency. |
| (3) | In each Silver Stream Document, where it relates to a person (i) incorporated, (ii) established,(iii) constituted, (iv) formed, (v) which carries on, or has carried on, business, or (vi) that owns immovable property, in each case, in Jersey, a reference to: |
| (a) | a "composition, compromise, assignment or arrangement with any creditor", "winding up", "administration", "insolvency", "insolvent", "bankruptcy”, "liquidation" or "dissolution" includes, without limitation, "bankruptcy" (as that term is interpreted pursuant to Article 8 of the Interpretation (Jersey) Law 1954), a compromise or arrangement of the type referred to in Article 125 of the Companies (Jersey) Law 1991, any procedure or process referred to in Part 21 of the Companies (Jersey) Law 1991, and any other similar proceedings affecting the rights of creditors generally under Jersey law, and shall be construed so as to include any equivalent or analogous proceedings; |
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| (b) | a "liquidator", "receiver", "administrative receiver", "administrator" or the like includes, without limitation, the Viscount of the Royal Court of Jersey, Autorisés, any provisional liquidator or liquidator appointed pursuant to Part 21 of the Companies (Jersey) Law 1991, or any other person performing the same function of each of the foregoing; |
| (c) | a “Security", "security interest", "security", "encumbrance" or the like includes, without limitation, any hypothèque, whether conventional, judicial or arising by operation of law and any security interest created pursuant to the Security Interests (Jersey) Law 1983 or Security Interests (Jersey) Law 2012 and any related legislation; and |
| (d) | any equivalent or analogous procedure or step being taken in connection with insolvency includes any corporate action, legal proceedings or other formal procedure or step being taken in connection with an application for a declaration of en désastre being made in respect of any such entity or any of its assets (or the making of such declaration) or the service of a statutory demand pursuant to Part 21 of the Companies (Jersey) Law 1991 in respect of such entity. |
Section 1.3 Days
In this Agreement, a period of days shall be deemed to begin on the first day after the event which began the period and to end at 5:00 p.m. (Eastern Standard Time) on the last day of the period. If, however, the last day of the period does not fall on a Business Day, the period shall terminate at 5:00 p.m. (Eastern Standard Time) on the next Business Day.
Section 1.4 Joint and Several Liability
All obligations and liabilities designated as being obligations or liabilities of Seller, including all representations and warranties, covenants and payment and delivery obligations of Seller, are joint and several obligations of MAL and MAC and each of MAL and MAC will, as a separate and independent obligation, perform each such obligation as primary obligor. Each of MAL and MAC irrevocably waives any claim, remedy or other right which it may now have or hereafter acquire against each other that arises from the existence, payment, performance or enforcement of a Seller’s obligation under the Silver Stream Documents, including any right of subrogation, reimbursement, exoneration, indemnification or any right to participate in any claim or remedy of Purchaser against any Seller, or their property and assets which Purchaser now has or may hereafter acquire, whether or not such claim, remedy or other right is reduced to judgment or is liquidated, unliquidated, fixed, contingent, matured, unmatured, deposited, undisputed, secured or unsecured and whether or not such claim, remedy or other right arises in equity or under contract, statute or common law.
Section 1.5 Merger
It is the intention of the Parties that MAC will merge with and into MAL pursuant to the Merger prior to the Closing Date so that all undertaking, property and liabilities of MAC will vest in MAL as surviving company and that MAL will be the only Seller under this Agreement for all purposes.
Section 1.6 Schedules
The following schedules are attached to and form part of this Agreement:
Schedule A - Mining Properties (With Map of Stream Properties)
Schedule B - Corporate Structure and Organization Chart
Schedule C - Representations and Warranties of the Seller PSA Entities
Schedule D - Representations and Warranties of Purchaser
Schedule E - Material Contracts
Schedule F - Stream NPV Procedures
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Schedule G – Transaction Security Documents
Schedule H - Monthly Report
Schedule I - Accession Agreement
Schedule J - Annual Compliance Certificate
Schedule K - Conditions Precedent
Schedule L - Conditions Subsequent
Schedule M – Existing Security
ARTICLE 2
PURCHASE AND SALE
Section 2.1 Purchase and Sale
| (1) | Subject to and in accordance with the terms of this Agreement including Section 2.2, from and after the Effective Date, Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from Seller, an amount of Refined Silver equal to the Payable Silver, free and clear of all Encumbrances. For greater certainty, Payable Silver shall not be reduced for, and Purchaser shall not be responsible for any Offtaker Charges, all of which shall be for the account of Seller. |
| (2) | Seller shall not sell to Purchaser any Refined Silver that has been directly or indirectly purchased on a commodities exchange provided however that the foregoing will in no way prohibit Seller from selling and delivering to Purchaser Refined Silver that Seller has purchased from a bullion bank where such bullion bank is acting as principal and not as an agent of Seller or any of its Affiliates. Seller shall not sell and deliver to Purchaser the physical Refined Silver resulting from Produced Silver. |
Section 2.2 Delivery Obligations
Subject to Completion occurring and the Deposit having been paid, with respect to each Offtaker Payment made;
| (i) | on or after the Effective Date but prior to the Closing Date, within twenty (20) Business Days following the Closing Date, and |
| (ii) | on or after the Closing Date, within five (5) Business Days of each Offtaker Payment, |
Seller shall sell and deliver to Purchaser, Refined Silver in an amount equal to the Payable Silver in the Offtaker Delivery to which such Offtaker Payment relates, whether such Offtaker Payment relates to all or any portion of the Produced Silver contained in such Offtaker Delivery, provided that if an Offtaker Payment consists of a provisional payment that may be adjusted upon final settlement of an Offtaker Delivery, then:
| (a) | Seller shall sell and deliver to Purchaser, within 5 Business Days of any provisional Offtaker Payment, Refined Silver in an amount equal to: (A) the percentage paid on a provisional basis, such percentage being equal to the total value of the payment or other consideration received by any Seller Group Entity in respect of the Produced Silver contained in such Offtaker Delivery divided by the total value of the Produced Silver determined on a provisional basis (determined in accordance with the applicable Offtake Agreement) as being contained in such Offtaker Delivery; multiplied by (B) the Payable Silver contained in such Offtaker Delivery; as supported by the documentation provided pursuant to Section 2.4 and in the applicable Monthly Report; and |
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| (b) | within 5 Business Days of the final settlement of the Offtaker Delivery with the Offtaker, Seller shall sell and deliver to Purchaser Refined Silver in an amount, if positive, equal to the Payable Silver determined pursuant to the final settlement, less the number of ounces of Refined Silver previously delivered to Purchaser in respect of such Offtaker Delivery pursuant to Section 2.2(a), as supported by the documentation provided pursuant to Section 2.4 and the applicable Monthly Report. If such difference is negative, then Seller shall be entitled to set off and deduct such excess amount of Refined Silver from the next required delivery of Refined Silver by Seller to Purchaser under this Agreement or if no such further deliveries are to be made, Purchaser shall within twenty (20) days of the end of the following calendar month pay the applicable Silver Purchase Price in respect of any excess ounces delivered to the extent not already paid. |
Section 2.3 Delivery of Silver Credits
| (1) | Seller shall sell and deliver to Purchaser all Refined Silver to be sold and delivered under this Agreement by way of credit or physical allocation (which in either case will represent the sale of physical silver) to the metal account located in London, UK or such other location designated by Purchaser and consented to by Seller (such consent not to be unreasonably withheld) from time to time. |
| (2) | All deliveries of Refined Silver to Purchaser shall be deemed to have been made at such time and on such date (the “Time of Delivery” on the “Date of Delivery”) such Refined Silver is credited or physically allocated to the applicable designated metal account of Purchaser. Title to, and risk of loss of, Refined Silver shall pass from Seller to Purchaser at the place of delivery and the Time of Delivery on the Date of Delivery. All costs and expenses pertaining to each delivery of Refined Silver shall be borne by Seller. |
| (3) | Seller represents, warrants and covenants that, at each Time of Delivery: |
| (a) | it is the legal and beneficial owner of the Refined Silver delivered and credited to the designated metal account of Purchaser; |
| (b) | it has good, valid and marketable title to such Refined Silver; and |
| (c) | such Refined Silver is free and clear of all Encumbrances. |
Section 2.4 Invoicing
| (1) | Seller shall notify Purchaser in writing at least two Business Days before any delivery and any credit or transfer to the designated metal account of Purchaser of: |
| (a) | the number of ounces of Refined Silver to be credited; and |
| (b) | the estimated Date of Delivery and expected Time of Delivery. |
| (2) | At the Time of Delivery, Seller shall deliver to Purchaser an invoice setting out: |
| (a) | the number of ounces of Refined Silver so credited; |
| (b) | the Silver Purchase Price for all such Refined Silver to be delivered; |
| (c) | the amount (if any) being credited against the Uncredited Deposit and the remaining balance of the Uncredited Deposit (if any); |
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| (d) | the accounting shipment summary of the Offtake Sales Documents prepared by Seller applicable to such delivery; and |
| (e) | the aggregate number of ounces of Refined Silver delivered to Purchaser under this Agreement up to the Time of Delivery (including, the Refined Silver subject to the invoice); and |
| (f) | shall attach to such invoice the Offtake Sales Documents for each such delivery. |
Section 2.5 Purchase Price
| (1) | Purchaser shall pay to Seller a purchase price for each ounce of Refined Silver sold and delivered by Seller to Purchaser under this Agreement (the “Silver Purchase Price”) equal to: |
| (a) | until the Uncredited Deposit has been reduced to nil, the Silver Market Price on the day immediately prior to the Time of Delivery; with an amount equal to the Silver Cash Price being payable in cash and the difference between the Silver Market Price and the Silver Cash Price being payable by crediting such amount against the Uncredited Deposit in order to reduce the Uncredited Deposit until the Uncredited Deposit has been reduced to nil; and |
| (b) | after the Uncredited Deposit has been reduced to nil, the Silver Cash Price, such amount being payable in cash. |
| (2) | Payment by Purchaser for each delivery of Refined Silver shall be made promptly and in any event not later than five Business Days after the later of the Time of Delivery and receipt of the documents set forth in Section 2.4(2). |
Section 2.6 Loss of Offtaker Delivery
In the event of any total or partial loss of any Produced Silver prior to the transfer of risk of loss of any such Produced Silver to an Offtaker, then Seller shall be required to sell and deliver to Purchaser an amount of Refined Silver equal to the Payable Silver lost and contained in the provisional invoice to the Offtaker or that would have been sent to the Offtaker, in respect of such lost Produced Silver, such requirement to be performed no later than five Business Days after receipt by a Seller Group Entity of insurance proceeds or any other payment in respect of such loss. Seller shall promptly notify Purchaser of any such loss.
Section 2.7 Proceeds Account and Cashflow Waterfall
| (1) | So long as any Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof remains outstanding, unless Purchaser otherwise agrees, the Seller PSA Entities must deposit, or cause to be deposited, on receipt into a Proceeds Account: |
| (a) | all money received by a Seller PSA Entity from Saleable Products or otherwise from the sale of Minerals (including copper and silver) and any other operating revenue received by a Seller PSA Entity; |
| (b) | net amounts received by a Seller PSA Entity under or in relation to any Hedging Agreement; |
| (c) | interest on the Proceeds Account, the Distribution Account and any other bank account of the Seller PSA Entities relating to the Project; |
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| (d) | the proceeds of the loans or deposits, as applicable, received under each Acquisition Finance Document; |
| (e) | any liquidated damages payable under or in connection with the Material Contracts; |
| (f) | all GST refunds and input tax credits; |
| (g) | all net proceeds received under any Derivative Transaction entered into in accordance with the Approved Hedging; |
| (h) | the proceeds received by a Seller PSA Entity upon the issuance of Equity Securities in connection with the acquisition Transaction; |
| (i) | the proceeds of any insurance (including all business interruption insurance proceeds) in relation to the Project received by a Seller PSA Entity that have not been used for reinstatement or replacement of the relevant asset to which the insurance proceeds related within 60 days of receipt; |
| (j) | any final adjustment amount and final adjustment interest amount received by a Seller PSA Entity under the SSA; and |
| (k) | all other amounts received by a Seller PSA Entity (or to its order) in connection with the Project or its interest in the Project. |
| (2) | So long as any Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof remains outstanding, unless Purchaser otherwise agrees, all amounts deposited into a Proceeds Account may only be withdrawn in order to be applied in accordance with the provisions of the Cashflow Waterfall. |
ARTICLE 3
DEPOSIT
Section 3.1 Deposit
In consideration for the sale and delivery of Refined Silver under and pursuant to the terms of this Agreement, Purchaser hereby agrees to pay to Seller a deposit in cash against the Silver Purchase Price in the amount of the Deposit, payable in accordance with Section 3.2 to the account designated by Seller for this purpose.
Section 3.2 Closing Date Deliveries
| (1) | Purchaser shall pay to Seller the Deposit on the Business Day (the “Closing Date”) on which: |
| (a) | Purchaser has received the documents, agreements and evidence set out in Part 1 of Schedule K in form and substance satisfactory to it; and |
| (b) | the other conditions set out in Schedule K are satisfied, fulfilled or waived (by the Party entitled to the benefit of the relevant condition); |
which date shall not be later than June 1, 2023 (or such later date as Purchaser may agree in its sole and unfettered discretion).
| (2) | Each of the conditions set forth in: |
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| (a) | Part 1 of Schedule K is for the exclusive benefit of Purchaser and may only be waived by it in its sole discretion; and |
| (b) | Part 2 of Schedule K is for the exclusive benefit of Seller and may only be waived by it in its sole discretion. |
| (3) | Each Seller PSA Entity agrees that, as part of Purchaser reviewing the matters referred to in Part 1 of Schedule K, Purchaser may identify matters that in its opinion require amendments to a Silver Stream Document which must be entered into before the Closing Date. If it does so identify any such matter, then Purchaser will notify the Seller PSA Entities of the amendments and propose a draft amending agreement (or draft amendment and restatement of this Agreement). The Seller PSA Entities must then promptly enter into the amendment agreement (or amendment and restatement) and provide all other documents and evidence in connection with the entry into of it reasonably requested by Purchaser. If Purchaser has notified the Seller PSA Entities that an amendment agreement (or an amendment or restatement) is required, the Seller PSA Entities agree that Purchaser shall have no obligation to advance the Deposit until Purchaser notifies the Seller PSA Entities that the amendment agreement (or amendment and restatement) has been entered into and all other documents and evidence in connection with the entry into of it reasonably requested by Purchaser have been provided to the satisfaction of Purchaser. Purchaser agrees to notify the PSA Entities promptly upon being so satisfied. |
Section 3.3 Satisfaction of Conditions Precedent
Each Seller PSA Entity shall use all reasonable commercial efforts and take all reasonable action as may be necessary or advisable to satisfy and fulfil all the conditions precedent set forth in Part 1 of Schedule K, as promptly as reasonably practicable.
Section 3.4 Condition Subsequent
| (1) | The Seller PSA Entities will use best efforts to complete the Whitewash Procedure as soon as possible following the date hereof, but in any event, the Seller PSA Entities shall complete the Whitewash Procedure prior to the Whitewash Completion Date. |
| (2) | Within the time periods specified in Schedule L, the Seller PSA Entities shall satisfy and fulfill each of the conditions set out in Schedule L, |
Section 3.5 Use of Deposit
The Seller PSA Entities shall ensure that the Deposit is used only for the acquisition of the Project Owner.
ARTICLE 4
TERM
Section 4.1 Term
The term of this Agreement shall commence on the Signing Date and, subject to Section 9.2(1)(c), shall continue until the date that is 20 years after the Signing Date (the “Initial Term”). Purchaser may terminate this Agreement at the end of the Initial Term by providing the Seller PSA Entities, prior to the expiry of the Initial Term, with written notice of its intention to terminate. If Purchaser has not provided such notice prior to the expiry of the Initial Term, then this Agreement shall continue in full force and effect for successive ten-year periods unless and until Purchaser provides written notice to the Seller PSA Entities terminating this Agreement prior to the end of the then current term.
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Section 4.2 Uncredited Deposit
If, by the expiry of the term of this Agreement or upon any early termination of this Agreement pursuant to Section 9.2(1)(c) or otherwise upon valid termination of this Agreement, Seller has not sold and delivered to Purchaser an amount of Refined Silver sufficient to reduce the Uncredited Deposit to nil in accordance with this Agreement, then Seller shall pay such Uncredited Deposit to Purchaser within 60 days of demand therefor following the expiry of the term or the termination of this Agreement by Purchaser.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
Section 5.1 Reporting Requirements
| (1) | Seller shall deliver to Purchaser a Monthly Report on or before the fifth Business Day after the last day of each calendar month. |
| (2) | Promptly after the Mine Plan is presented to the board of directors of any Seller Group Entity, and in any event at least once every 12 months, and promptly whenever an update to the Mine Plan is adopted by management of any Seller Group Entity, Seller shall provide to Purchaser such Mine Plan or updated Mine Plan, as applicable, together with the following: |
| (a) | an updated annual production forecast for silver from the Stream Properties during the upcoming calendar year (to be set out on a monthly basis) and the remaining life of mine thereafter (to be set out on a yearly basis); |
| (b) | the amounts of Payable Silver as forecast for the upcoming calendar year (to be set out on a monthly basis) and the remaining life of mine thereafter (to be set out on a yearly basis); |
| (c) | a list of assumptions used in developing the forecasts referred to in paragraphs (a) and (b), including the types, tonnages, grade and recoveries of ore from the Stream Properties and the operating costs and sustaining capital during the applicable forecast period in the case of the production forecast; |
| (d) | an updated Reserves Statement and a Resources Statement and the assumptions used in each such statement; |
| (e) | an updated Base Case Financial Model; and |
| (f) | details as to any deviation or departure in the processes or operations set out in the Initial Technical Report. |
| (3) | Seller shall if practicable, notify and consult with Purchaser regarding any matter concerning the Mining Properties that has or, in the opinion of Seller, is reasonably likely to have an Adverse Impact. Seller shall seek to comply with this Section 5.1(3), to the extent reasonably practicable, prior to any public announcement regarding the matter. |
| (4) | Seller shall give Purchaser written notice of each of the following events promptly upon any Seller PSA Entity becoming aware of such event: |
| (a) | all material actions, suits, hearings, investigations or proceedings before any Governmental Authority or arbitrator pending or, to any Seller PSA Entity’s knowledge, threatened, against or affecting any Seller Group Entity or with respect to the ownership, use, maintenance or operation of the Mine or Mining Properties; |
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| (b) | the occurrence of an Event of Default or any event or circumstance but for the giving of notice or the lapse of time, or both, would constitute an Event of Default; |
| (c) | any actual or threatened material default or breach under any Material Contract or any Acquisition Finance Document; |
| (d) | any actual or threatened material default, breach, revocation, termination or expropriation of any material Authorisation; |
| (e) | incurrence of any Indebtedness in a principal amount individually or in the aggregate in excess of US$10 million (or its equivalent); |
| (f) | any material environmental non-compliance; |
| (g) | any material non-compliance or breach of the Code of Conduct; |
| (h) | in each case, accompanied by a written statement by a senior officer of Seller setting forth details of the occurrence referred to therein. |
| (5) | The Seller PSA Entities shall deliver the following financial statements to Purchaser: |
| (a) | within 120 days after each fiscal year-end of Seller, annual comparative consolidated financial statements of Seller for the year then ended, audited and prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness, together with a duly executed and completed Annual Compliance Certificate; |
| (b) | within 90 days after each fiscal year-end of Project Owner and MAC Australia, annual comparative financial statements for the year then ended, unaudited and unconsolidated and prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness; |
| (c) | within 45 days after the end of each fiscal quarter of Seller, quarterly unaudited consolidated financial statements of Seller for the three month period then ended, prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness; and |
| (d) | within 45 days after the end of each fiscal quarter of Project Owner and MAC Australia, quarterly unaudited financial statements of Project Owner and MAC Australia for the three month period then ended, prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness. |
| (e) | To the extent any of the foregoing information is published publicly on Seller’s SEDAR profile or website, such publication shall constitute provision of such information to Purchaser. |
| (6) | Promptly after preparation of any environmental, social, climate or governance related report with respect to the Project Assets and operation of the Mine by any Seller Group Entity, and promptly following any update to any such report, the Seller PSA Entities shall provide all such reports to Purchaser, unless such information is published publicly on Seller’s SEDAR profile or website. The Seller PSA Entities shall use their commercially reasonable efforts to provide Purchaser with any information with respect to the Mine that it requires for its environmental, social and corporate governance reporting requirements and practices, as reasonably requested from time to time. |
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| (7) | Seller shall provide Purchaser with copies of all compliance certificates, financial, production, environmental or other reports (including the Base Case Financial Model) given by or with respect to any Seller PSA Entity or the Project Owner to any holder of Permitted Secured Debt in their capacity as a debtholder or royalty holder, as applicable, concurrently with the delivery thereof to such holder. |
Section 5.2 Books and Records
The Seller PSA Entities shall keep true, complete and accurate Books and Records to enable Purchaser to confirm compliance with the terms and conditions of this Agreement, including the determination of the Payable Silver. The Seller PSA Entities shall:
| (a) | provide copies to Purchaser of; and |
| (b) | permit Purchaser and its authorized representatives and agents to perform audits, reviews and other examinations of, |
such Books and Records from time to time, at such reasonable times as Purchaser may request upon reasonable notice and at Purchaser’s sole risk and expense, provided that, absent an Event of Default that has occurred and is continuing, Purchaser and its authorized representatives and agents shall not conduct more than one such audit, review or other examination in any fiscal year of Seller.
Section 5.3 Technical Reports
| (1) | The Seller PSA Entities and the Project Owner shall prepare any Technical Report as and when required by Applicable Law. |
| (2) | If so requested by Purchaser, the Seller PSA Entities shall use commercially reasonable efforts to assist Purchaser in obtaining at the cost of Purchaser (i) consents and certificates from external qualified Persons with respect to Technical Reports pertaining to the Stream Properties as may be necessary to allow Purchaser or its Affiliates to make filings of technical reports prepared in accordance with NI 43-101 or other Applicable Law, to the extent any such reports are required to be filed by Purchaser or its Affiliates under Applicable Law, (ii) other technical data, records or information pertaining to the Stream Properties in the possession or control of the Seller PSA Entities to the extent any such information is required for any technical reports required to be filed by Purchaser or its Affiliates under Applicable Law, and (iii) will use commercially reasonable efforts to cause the authors of such Technical Report to have such Technical Report addressed directly to Purchaser or any Purchaser Affiliate if it files such Technical Report under NI 43-101 (to the extent applicable to Purchaser or any Affiliate thereof) or other Applicable Law. |
| (3) | If so requested by Purchaser and at Purchaser’s cost, the Seller PSA Entities shall use their commercially reasonably efforts to assist Purchaser (A) in obtaining technical data, records or information pertaining to the Mine in the possession or control of the Seller PSA Entities or any consultants, to the extent that the Seller PSA Entities can control or require the provision of such information from the consultants, and (B) otherwise in conducting its own diligence of the Mine (including access thereto), in each case (x) if Purchaser or any Purchaser Affiliate prepares and files a Technical Report on the Stream Properties in accordance with NI 43-101 (to the extent applicable to Purchaser or any Affiliate thereof) or other Applicable Law and such information is reasonably necessary to permit Purchaser or any Purchaser Affiliate to prepare such technical report or (y) to facilitate the reliance by Purchaser or any Purchaser Affiliate on any exemption available from the requirement to file any such report. |
| (4) | Prior to the filing by Purchaser or any of its Affiliates of any Technical Report on the Mine, Purchaser will give the Seller PSA Entities a reasonable opportunity to review and comment on such Technical Report (and Purchaser shall consider in good faith any comments provided by the Seller PSA Entities), and shall provide to the Seller PSA Entities a final copy or an advance draft copy of any such Technical Report before it is filed or otherwise made publicly available and in any event not less than 5 Business Days before it is so filed. Purchaser agrees that neither the Seller PSA Entities nor any of their Affiliates shall assume any liability in connection with any disclosure by Purchaser or any of its Affiliates with respect to the Mine, including in connection with any Technical Report prepared or filed by Purchaser or any of its Affiliates that contains information concerning the Mine that was disclosed to Purchaser or its Affiliates hereunder. Purchaser shall not be entitled to exercise its rights provided above with respect to the preparation by Purchaser of a Technical Report, in the event that there is a current and complete Technical Report for the Mine that complies with all applicable legal and regulatory requirements and which has been addressed to Purchaser and all consents necessary for Purchaser (including those of third party qualified persons) to rely on and publicly file such Technical Report for the purposes of Applicable Law have been provided to Purchaser. |
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Section 5.4 Inspections
Subject at all times to the workplace rules and supervision of the Project Owner, and provided any rights of access do not interfere with any exploration, development, mining or processing work conducted on the Mining Properties, the Seller PSA Entities hereby grant to Purchaser and its representatives and agents, at reasonable times and upon reasonable notice and at Purchaser’s sole risk and expense, the right to access and physically inspect the Books and Records and the Mining Properties, in each case to monitor Project Owner’s mining and processing operations on the Stream Properties, to confirm compliance with the terms and conditions of this Agreement, or to otherwise monitor and review mining and processing operations. Absent an Event of Default that has occurred and is continuing, Purchaser and its authorized representatives and agents shall not exercise its rights under this section more than once per fiscal year of Seller except where required for the purposes of preparing a required Technical Report in accordance with Section 5.3.
Section 5.5 Effective Date of Rights
The rights of Purchaser under Section 5.1 to Section 5.4 of this Agreement are effective on and from the date that Completion occurs.
Section 5.6 Confidentiality
| (1) | Each Party agrees that it shall maintain as confidential and shall not disclose, and shall cause its Affiliates, employees, officers, directors, advisors, agents and representatives to maintain as confidential and not to disclose any information (whether written, oral or in electronic format) received or reviewed by such Party (a “Receiving Party”) from any other Party, its Affiliates, employees, officers, directors, advisors, agents or representatives (a “Disclosing Party”) as a result of or in connection with this Agreement (“Confidential Information”), except in the following circumstances: |
| (a) | a Receiving Party may disclose Confidential Information to its professional advisors, including its auditors, legal counsel, lenders, brokers, underwriters and investment bankers and prospective financing or acquisition parties; |
| (b) | subject to Section 5.5(3) and Section 11.7, a Receiving Party may disclose Confidential Information where that disclosure is necessary to comply with any Applicable Law; |
| (c) | a Receiving Party may disclose Confidential Information where such information is already public knowledge other than by a breach of the confidentiality terms of this Agreement or is known by the Receiving Party prior to the entry into of this Agreement or obtained independently of this Agreement and the disclosure of such information would not breach any other confidentiality obligations; |
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| (d) | with the approval of the Disclosing Party; |
| (e) | a Receiving Party may disclose Confidential Information to those of its and its Affiliates’ directors, officers, employees and agents who need to have knowledge of the Confidential Information; |
| (f) | in connection with any legal proceeding arising in connection with this Agreement, but any such disclosure shall be subject to such confidentiality procedures as may be reasonably requested by the Disclosing Party and approved by the court; and |
| (g) | to the extent required by a Person that is party to the Intercreditor Deed, Senior Facility Agreement, Glencore Royalty Deed or Mezzanine Debt Facility Agreement in connection with the transactions contemplated thereunder. |
| (2) | Each Party shall ensure that its and its Affiliates’ employees, directors, officers and agents and those persons listed in Section 5.6(1)(a) and Section 5.6(1)(e), are made aware of this Section 5.6 and comply with the provisions of this Section 5.6. Each Party shall be liable to the other Party for any improper use or disclosure of such terms or information by such persons. In addition, each Party has the right to pursue causes of action or other acts against such persons. |
| (3) | If a Party is required to file this Agreement in any public registry, filing system or depository, including SEDAR in order to comply with Applicable Law, it shall notify the other Parties of such requirement within two Business Days of the date of this Agreement, and the Parties shall consult with each other with respect to any proposed redactions to the Agreement in compliance with Applicable Law before it is filed in any such registry, filing system or depository. |
ARTICLE 6
COVENANTS
Section 6.1 Conduct of Operations
| (1) | Subject to Section 6.1(2), all decisions regarding the Mine and the Mining Properties (including the Mineral Processing Facilities), including all decisions concerning the methods, extent, times, procedures and techniques of any: (i) exploration, development and mining related to the Mine, including spending on operating and capital expenditures; (ii) leaching, milling, processing or extraction; (iii) materials to be introduced on or to the Mining Properties; and (iv) sales of Minerals and terms thereof shall be made by the Project Owner, in its sole discretion. |
| (2) | The Seller PSA Entities shall, and shall cause each other applicable Seller Group Entity to, carry out and perform all mining operations and activities pertaining to or in respect of the Mine, the Stream Properties and the Mineral Facilities in a commercially prudent manner and in accordance with all Applicable Laws, the Authorisations, the Mine Plan and in accordance with Good Practice Standards. In addition, the Seller PSA Entities shall, and shall cause the other applicable Seller Group Entities to: |
| (a) | ensure that all cut-off grade, short term mine planning, long term mine planning and production decisions concerning the Stream Properties shall be based on silver prices typical of normal industry practice and be made on the assumption that the Project Owner is receiving payment for all silver produced at the Stream Properties at Silver Market Prices; and |
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| (b) | assume silver prices typical of normal industry practice and that the Project Owner is receiving payment for all silver produced at the Stream Properties at market prices, without any consideration of the financial impact of this Agreement: (A) in any resource or reserve determination, short term mine planning, long term mine planning and production decisions concerning the Stream Properties; (B) in any studies, analyses or decisions regarding the nature or location of the ore to be mined on, the sequence of mining operations or any related financing thereof; and (C) in any determination to operate, modify, suspend or terminate the Mineral Processing Facilities. |
| (3) | For greater certainty, nothing in this Section 6.1 shall require the Seller PSA Entities or any of their Affiliates or any other Person to operate or continue operating the Mine if Project Owner has determined that the exploitation of the Stream Properties is not, at the relevant time, economically feasible taking into account the principles in Section 6.1(2). |
Section 6.2 Processing/Commingling
| (1) | The Seller PSA Entities shall process all Minerals through the Mineral Processing Facilities and ensure such processing occurs at the Mineral Processing Facilities in a manner consistent with the processing methods described in the Mine Plan. The Seller PSA Entities shall not process Other Minerals through the Mineral Processing Facilities, except in accordance with Section 6.2(2). |
| (2) | Without limiting Section 6.2(1), the Seller PSA Entities shall not and shall ensure that no Seller Group Entity or other Person processes Other Minerals through the Mineral Processing Facilities, or commingles such Other Minerals with, Minerals mined, produced, extracted or otherwise recovered from the Stream Properties, unless (i) the applicable Seller Group Entity has adopted and employs reasonable practices and procedures for weighing, determining moisture content, sampling and assaying and determining recovery factors (a “Commingling Plan”), such Commingling Plan to ensure the division of Other Minerals and Minerals for the purpose of determining the quantum of Minerals; (ii) Purchaser shall not be disadvantaged as a result of the processing of Other Minerals in priority to, or concurrently with, the Minerals, or Seller, acting reasonably, shall have entered into an agreement to compensate Purchaser for any such disadvantage providing for a commensurate stream interest in such Other Minerals or another form of compensation (a “Compensation Agreement”); (iii) Purchaser has approved the Commingling Plan and, if applicable, the Compensation Agreement, such approval not to be unreasonably withheld; (iv) the Seller PSA Entities shall keep all books, records, data, information required by the Commingling Plan for the same period of time as is required by the applicable taxation authorities for the retention of financial records; and (v) the Seller PSA Entities shall keep all samples required by the Commingling Plan in accordance with Good Practice Standards. The Seller PSA Entities agree to revisit the Commingling Plan and the Compensation Agreement if Purchaser determines that circumstances have changed, in order to ensure that the Commingling Plan continues to provide for the accurate measurement of Minerals and the Compensation Agreement reasonably compensates Purchaser for any disadvantage. For greater certainty, the foregoing does not apply to the handling of Minerals by an Offtaker in accordance with its standard operating procedures and Good Practice Standards. |
Section 6.3 Preservation of Corporate Existence
| (1) | Except for the Merger or as permitted by Section 6.6, each Seller PSA Entity shall do all things necessary or advisable to maintain its corporate existence and, in the case of Seller, remain a resident in Jersey for income tax purposes [***]. Seller shall maintain a registered office in Jersey and otherwise ensure that it satisfies all conditions required to remain a company registered in the Jersey. |
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| (2) | Without limiting Section 6.6 and Section 11.12, other than to the extent it is a Permitted Transaction, no Seller PSA Entity shall consolidate, amalgamate with, or merge with or into, or Transfer all or substantially all of its assets to, or reorganize, reincorporate or reconstitute into or as another entity or participate in a demerger, or continue to any other jurisdiction or consummate a similar corporate event unless: (i) at the time of such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event, the resulting, consolidated, surviving or transferee entity/(ies) assumes in favour of Purchaser all the obligations of such Seller PSA Entity under each Silver Stream Document to which such Seller PSA Entity is a party; (ii) Purchaser has provided its prior written consent to such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event, such consent not to be unreasonably withheld; and (iii) each Seller PSA Entity acknowledges, confirms and agrees in favour of Purchaser that its obligations under each Silver Stream Document to which it is a party continue in full force and effect despite such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event. |
Section 6.4 Insurance
| (1) | The Seller PSA Entities shall maintain with reputable insurance companies, insurance (including business interruption insurance) with respect to the Project Assets and the operations of the Project Owner conducted on and in respect of the Mine against such casualties and contingencies and of such types and in such amounts as is customary in the case of similar operations in similar locations, which shall include insurance on each shipment of Minerals from the Mine to the extent such insurance is available to the Seller PSA Entities on reasonable commercial terms, until risk of loss for such shipment has been transferred to the Offtaker. |
| (2) | Seller shall, upon request of Purchaser, furnish to Purchaser a certificate setting forth the nature and extent of all insurance maintained by or on behalf of the Seller PSA Entities in accordance with Section 6.4(1) and confirming its adequacy and sufficiency. Seller shall, upon the request of Purchaser, provide Purchaser with copies of all insurance policies as in effect from time to time relating to the Project Assets. |
| (3) | All of the insurance policies relating to the Project Assets and the operations conducted thereon (and all policies of reinsurance issued in connection therewith) shall specify Purchaser as an additional insured and as a loss payee and contain such endorsements in favour of Purchaser as Purchaser shall reasonably require. |
| (4) | The Seller PSA Entities shall not do or omit to do anything, or cause anything to be done or omitted to be done, whereby any insurance required to be effected hereunder would, or would be likely to, be rendered void or voidable or suspended, impaired or defeated in whole or in part. |
Section 6.5 Project Assets
The Seller PSA Entities shall:
| (a) | except pursuant to a Transfer in compliance with Section 6.6, cause the Project Owner to be the only legal and beneficial owner of, and ensure that, other than as arising under the Permitted Encumbrances or as a result of a Permitted Disposal, no other Person holds or acquires any ownership right, title or interest in, the Project Assets; |
| (b) | subject to Section 6.13, keep the Stream Properties in good standing; |
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| (c) | cause the Project Owner to maintain all Authorisations necessary to operate the Mine in good standing and construct, develop and operate the Mine in a commercial prudent manner consistent with the Mine Plan and Good Practice Standards and in compliance with all Applicable Laws; and |
| (d) | if Project Owner intends to stockpile, store, warehouse or otherwise place Minerals off the Stream Properties, before doing so, the Seller PSA Entities shall obtain from the property owner, operator or both, as applicable, where such stockpiling, storage, warehousing or other placement occurs, to provide in favour of Purchaser a written acknowledgement in form and substance satisfactory to Purchaser, acting reasonably, which provides that Project Owner’s and/or its Affiliates’, as applicable, rights to the Produced Silver shall be preserved and which acknowledges Purchaser’s Encumbrances thereon and provides Purchaser with a right of access in the event of enforcement by Purchaser of the Silver Stream Security Documents. |
| Section 6.6 | Transfers |
| (1) | Except with the prior written consent of Purchaser, the Seller PSA Entities shall not, and shall cause the other Seller Group Entities to not: |
| (a) | permit, suffer or allow the Project Owner to Transfer, in whole or in part, or otherwise cease to hold (other than as contemplated by Section 6.5(b) or Section 6.6(3) or a transfer of Minerals in the ordinary course of business) all beneficial and legal title of, the Mining Properties and the other Project Assets or any right, title or interest therein; |
| (b) | Transfer, in whole or in part, or otherwise cease to hold (other than as contemplated by Section 6.5(b) or Section 6.6(3)), their direct or indirect interests in MAC Australia and the Project Owner; or |
| (c) | agree to, or enter into any agreement, arrangement or other transaction with any Person that would cause, or otherwise allow or permit to exist, a Change of Control of any Seller PSA Entity. |
| (2) | Notwithstanding Section 6.6(1)(c), the prior written consent of Purchaser shall not be required in connection with a Change of Control of Seller if: |
| (a) | the Acquiror is an Approved Acquiror; |
| (b) | the Acquiror (if the Acquiror is not controlled by any other person) or the Person that is not controlled by any other Person that controls the Acquiror executes and delivers to Purchaser on the closing of such Change of Control a guarantee of the payment and performance of all of the Silver Stream Obligations, substantially in form and substance as set out in the Guarantee, and satisfactory to Purchaser, acting reasonably; |
| (c) | there is no Event of Default (or an event which with notice or lapse of time or both would become an Event of Default) that has occurred and is continuing as at the date of the Change of Control; and |
| (d) | each Seller PSA Entity acknowledges, confirms and agrees in favour of Purchaser that its obligations under each Silver Stream Document to which it is a party continue in full force and effect both before and after giving effect to such Change of Control. |
| (3) | Notwithstanding Section 6.6(1)(a), the Project Owner may proceed with any Permitted Disposal. |
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| Section 6.7 | Offtake Agreements |
| (1) | The Seller PSA Entities shall ensure that: (i) when Minerals that contain any marketable metal are to be sold or otherwise disposed of, all such Minerals are sold by Seller to an Offtaker pursuant to an Offtake Agreement; and (ii) no Seller Group Entity shall smelt, refine or beneficiate any Produced Silver and the final sale or delivery of Produced Silver shall only be made to an Offtaker pursuant to an Offtake Agreement. |
| (2) | The Seller PSA Entities shall ensure that all Offtake Agreements entered into by Seller (or any other Seller Group Entity) shall be on commercially reasonable arm’s length terms and conditions for marketable and metal-bearing material similar in make-up and quality to those derived from the Minerals, and shall include (i) industry standard reporting and payment settlement protocols, (ii) provisions that require the delivery of metals return statements, provisional and final settlement sheets and invoices and certificates for final shipped moisture content and analyses and assays evidencing the amount of Minerals, and (iii) provisions that require appropriate and separate sampling, assaying, weighing and moisture determination procedures so that Seller (or any other Seller Group Entity) and the applicable Offtaker can determine the grade or content of silver, copper and other metals in each delivery to an Offtaker. |
| (3) | The Seller PSA Entities shall, and shall cause the other Seller Group Entities to, deliver all Minerals that include marketable metal to each Offtaker in such quantity, description and amounts and at such times and places as required under and in accordance with each Offtake Agreement. |
| (4) | Seller shall promptly provide to Purchaser confirmation of the terms of any such Offtake Agreement and, within 5 days after the execution thereof by each of the parties thereto, Seller shall provide to Purchaser a final signed copy of such Offtake Agreement and use its commercially reasonable efforts to avoid any requirement for the redaction of any part thereof, failing which, such Offtake Agreement shall be provided subject to the redactions required by any such Offtake Agreements. |
| Section 6.8 | Material Contracts |
| (1) | The Seller PSA Entities shall take, and shall cause the other Seller Group Entities to take, all commercially reasonable steps to enforce their respective rights and remedies under each Material Contract with respect to any breaches of the terms thereof (including in the case of any Offtake Agreement, any breaches relating to the timing and amount of Offtaker settlements). Seller shall promptly notify Purchaser in writing when any dispute arising out of or in connection with any Material Contract is commenced and shall provide Purchaser with timely updates of the status of any such dispute and the final decision and award of the court or arbitration panel with respect to such dispute, as the case may be. |
| (2) | The Seller PSA Entities shall promptly following execution thereof deliver to Purchaser copies of all Material Contracts and any and all amendment thereto. |
| (3) | Upon the request of Purchaser following: |
| (a) | any Seller PSA Entity entering into a new Material Contract; or |
| (b) | a Person obtaining an interest in a Tenement, in each case that Purchaser determines, after consulting Seller in good faith, requires a side agreement, the relevant Seller PSA Entity shall enter into, and each Seller PSA Entity shall use its reasonable endeavours to procure that the counterparty to the Material Contract enters into a side agreement in form and of substance satisfactory to Purchaser (acting reasonably) under which that counterparty consents to the Seller PSA Entity granting Security over all of its rights, title and interest in, to and under the Material Contract or Tenement, as the case may be. |
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| Section 6.9 | Restrictions on PSA Entities |
| (1) | Project Owner shall not, and the Seller PSA Entities shall not permit Project Owner to: |
| (a) | carry on any business other than the business of operating the Mine including exploration and development activities, and all other ancillary activities related thereto, or as required to perform its obligations under Applicable Law or the Transaction Documents; |
| (b) | own or lease any real or personal property, other than as required to carry on the business described in Section 6.9(1)(a), except any real or personal property that is not material to Project Owner; |
| (c) | incur, assume, be liable for or permit to exist any liabilities or obligations (contingent or otherwise, and excluding Financial Indebtedness), other than such liabilities or obligations as reasonably required to carry on the business described in Section 6.9(1)(a); |
| (d) | incur, assume, be liable for or permit to exist any Financial Indebtedness other than Permitted Indebtedness; |
| (e) | grant, incur, assume or permit to exist any Encumbrance (other than any Permitted Encumbrances) on the property or assets of Project Owner (including, for greater certainty, the Project Assets); or |
| (f) | make any loan to, or make any investment in, its direct or indirect security holders or their Affiliates other than, after the Whitewash Completion Date, another Seller PSA Entity or any Permitted Loan. |
| (2) | Seller shall not: |
| (a) | carry on any business other than as holding company and as required to perform its obligations under the Transaction Documents and activities ancillary thereto; |
| (b) | own or lease any real property (other than a lease of immaterial office space) or material personal property (other than holding the Deposit, cash, any Refined Silver to be delivered hereunder or any refined copper to be delivered pursuant to the Copper Stream Documents) and Equity Securities in wholly-owned Subsidiaries; |
| (c) | incur, assume, be liable for or permit to exist any Financial Indebtedness or other liabilities or obligations (contingent or otherwise), other than: (i) obligations of Seller under the Transaction Documents; (ii) any liabilities and obligations (excluding Financial Indebtedness) necessary for the performance of its obligations under the Transaction Documents; (iii) obligations under any Subordinated Intercompany Debt; (iv) any legal, accounting, tax, administration, corporate maintenance or similar liabilities arising in the ordinary course of its business; or (v) other Permitted Indebtedness; |
| (d) | grant, incur, assume or permit to exist any Encumbrance on its property or assets, other than the Security and Permitted Encumbrances; or |
| (e) | make any loan to, guarantee the obligations of, provide for other credit support for, or make any investment in, its direct or indirect Subsidiaries, other than by way of Subordinated Intercompany Debt or any Permitted Loan. |
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| (3) | MAC Australia shall not: |
| (a) | carry on any business other than holding the shares of Project Owner or as required to perform its obligations under the Transaction Documents; |
| (b) | own or lease any real property or own or lease any personal property, other than as required to carry on the business described in Section 6.9(3)(a), other than the shares of Project Owner and cash or investment securities; |
| (c) | incur, assume, be liable for or permit to exist any liabilities or obligations (contingent or otherwise, and excluding Financial Indebtedness), other than such liabilities or obligations as reasonably required to carry on the business described in Section 6.9(3)(a); |
| (d) | incur, assume, be liable for or permit to exist any Financial Indebtedness other than (i) its obligations under the Transaction Documents; (ii) any liabilities and obligations (excluding Financial Indebtedness) necessary for the performance of its obligations under the Transaction Documents; (iii) obligations under any Subordinated Intercompany Debt; or (iv) any legal, accounting, tax, administration, corporate maintenance or similar liabilities arising in the ordinary course of its business; |
| (e) | grant, incur, assume or permit to exist any Encumbrance (other than any Permitted Encumbrances) on any present or after acquired property or assets of MAC Australia; or |
| (f) | make any loan to or make any investment in, its direct or indirect security holders or their Affiliates other than another Seller PSA Entity and by way of Subordinated Intercompany Debt or any Permitted Loan. |
| Section 6.10 | Separation Requirements |
The Seller PSA Entities shall ensure that the Project Owner and each other Seller PSA Entity will be treated for all purposes as a separate Person in its dealings from all other Persons (including other Seller PSA Entities), including by ensuring that each of the Project Owner and the other Seller PSA Entities will (i) maintain books and records separate from any other Person; (ii) maintain its accounts separate from those of any other Person; (iii) conduct its own business in its own name; (iv) maintain separate financial statements or records (noting that this does not limit or prohibit the Seller Group Entities or the Seller PSA Entities preparing consolidated financial statements); (v) pay any liabilities out of its own funds; (vi) use separate invoices and cheques; (vii) hold itself out as a separate Person; (viii) correct any known misunderstanding regarding its separate identity; and (ix) engage in dealings with its Affiliates in a manner that respects its separate corporate identity.
| Section 6.11 | Related Party Transactions |
Without limiting any other provision of this Agreement, the Seller PSA Entities shall ensure that any Related Party Transaction entered into by the Seller PSA Entities shall be:
| (a) | in the ordinary course of business, at prices and on terms and conditions that are commercially reasonable and could be obtained in a similar arm’s length transaction; and |
| (b) | subject to a Subordination Deed in accordance with Section 7.1(5). |
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| Section 6.12 | Distributions. |
The Seller PSA Entities and the Project Owner shall not:
| (a) | make any Distribution other than: (i) Distributions by the Project Owner and MAC Australia necessary for Seller to fulfill its Silver Stream Obligations and Copper Stream Obligations; (ii) Distributions by the Project Owner and MAC Australia in a reasonable amount in respect of management salaries, director and auditor’s fees and similar expenses of Seller relating to the administration of the Project Owner as required pursuant to any Related Party Transaction that complies with the requirements of Section 6.11; (iii) Distributions by the Project Owner to MAC Australia provided that each of the Project Owner and MAC Australia has delivered the Silver Stream Security Documents required to be delivered by it pursuant to this Agreement and provided such Silver Stream Security Documents remain in effect; (iv) payments made on account of Permitted Indebtedness or (vi) any other Distribution provided that the amount of cash or Cash Equivalent Investments (net of any redemption costs) freely available to the Seller PSA Entities immediately following the Distribution is not less than US$30,000,000 and no Event of Default is continuing or would occur as a result of making the Distribution; |
| (b) | upon the occurrence of a Trigger Event and until 90 days after any such Trigger Event has been remedied or in the event the making of a Distribution would cause a Trigger Event, make any Distribution; or |
| (c) | permit Project Owner or any Seller PSA Entity to be subject to any restrictions on its ability to make Distributions (whether by way of dividend, debt repayment or otherwise) to MAC Australia or Seller that would impede in any manner Seller’s ability to make payments under this Agreement to Purchaser as and when provided for herein. |
| Section 6.13 | Abandonment |
Project Owner may abandon, surrender, relinquish or allow to lapse or expire any of the Stream Properties (an “Abandonment”, and “Abandon” and “Abandoned” shall have corresponding meanings) if Project Owner determines, acting in a commercially reasonable manner, that it is not economical to mine the Minerals from such Stream Properties that it proposes to Abandon and the Seller PSA Entities have provided Purchaser with at least ninety (90) days’ prior written notice of such Abandonment and the Seller PSA Entities have not received from Purchaser, at least 30 days before the proposed date of the Abandonment, written notice that Purchaser desires Project Owner to convey or cause the conveyance of such Stream Properties to be Abandoned (the “Abandonment Property”) to Purchaser or an assignee thereof. If such a written notice is received by the Seller PSA Entities from Purchaser, the Seller PSA Entities shall, in exchange for consideration of one U.S. Dollar, acting in good faith, use commercially reasonable efforts to convey or cause the conveyance of the Abandonment Property to Purchaser on an as is, where is basis and at the sole cost, risk and expense of Purchaser and shall thereafter have no further obligation to maintain the title to such Abandonment Property. If Purchaser does not give such written notice to the Seller PSA Entities within the prescribed period of time, Project Owner may Abandon such Abandonment Property and shall thereafter have no further obligation to maintain the title to such Abandonment Property or maintain such Abandonment Property in good standing.
| Section 6.14 | Right of First Refusal |
| (1) | On or before the later of (i) the seventh (7th) anniversary of the Closing Date and (ii) the date on which Purchaser together with any Affiliate of Purchaser ceases to hold or control more than 5% of the issued and outstanding common shares in the capital of Seller, if Seller or any Affiliate thereof (the “Vendor”) receives a Definitive Offer from a third party that would be binding upon acceptance by the Vendor (a “Third Party Offer”), to purchase a royalty, stream, participation, production or similar interest or to enter into any agreement that is similar to a royalty, stream, participation or production interest agreement, in each case, in respect of or with reference to any metals, minerals or products or by-products of whatever kind and nature and in whatever form or state, in, under or upon the surface or subsurface of any property now or hereafter owned or acquired by Seller or any of its Affiliates (collectively, a “ROFR Interest”), and the Vendor is willing to accept that Third Party Offer, then the Seller PSA Entities shall cause the Vendor, by notice in writing delivered to Purchaser, to offer to sell all, but not less than all, of the ROFR Interest so sought to be purchased by the third party under the Third Party Offer to Purchaser at the same price and otherwise upon the same terms and conditions as are contained in the Third Party Offer, and to provide to Purchaser the best available information that any Seller Group Entity has with respect to the ROFR Interest (including any information provided to the third party) (the “ROFR Offer”); provided that, if the Third Party Offer includes non-cash consideration that is personal to the third party (including shares of the third party), then Purchaser shall be entitled to substitute such non-cash consideration with cash or non-cash consideration that is personal to Purchaser (including shares of Purchaser or any of its Affiliates) with the same or greater value, liquidity and marketability as the third party’s non-cash consideration. [***]. |
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| (2) | [***]: |
| (a) | [***]; and |
| (b) | [***]. |
| (3) | [***]. |
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| (4) | If Purchaser does not accept the ROFR Offer, then the Vendor shall be free to sell all (but not less than all) of such ROFR Interest to the applicable third party pursuant to the Third Party Offer. If the Vendor and the third party have not entered into a binding, written agreement pertaining to all (but not less than all) of such ROFR Interest (the “Third Party Agreement”) [***] then Seller and the Vendor shall again be required to comply with the terms of this Agreement with respect to that Third Party Offer before selling the ROFR Interest that is the subject to the Third Party Offer to a third party. Seller shall provide Purchaser with a copy of the Third Party Agreement promptly once it is executed and delivered, and shall execute and deliver to Purchaser at the completion of the transactions contemplated by the Third Party Agreement a certificate of a director or senior officer of Seller certifying that the sale of the ROFR Interest to the third party was completed pursuant to the terms of the Third Party Offer. |
| (5) | [***]. |
| (6) | [***]. |
| (7) | The Section 6.14 is conditional on Completion occurring and the Deposit being paid to Seller in accordance with this Agreement and is of no effect until Completion has occurred and the Deposit had been paid. |
| Section 6.15 | Code of Conduct |
| (1) | Within twelve months of the Closing Date, Seller shall cause the Seller Group Entities to establish a code of conduct setting out the principles to guide the conduct of business and affairs of the Seller Group Entities including environmental and governance standards, relationship with indigenous peoples and communities in which it operates and compliance with Anti-Corruption Laws and Anti-Terrorism Laws. Such code of conduct shall be satisfactory to Purchaser, acting reasonably and approved by the board of directors of Seller and the other Seller Group Entities (the “Code of Conduct”). |
| (2) | Seller shall abide by the Code of Conduct and shall take all commercially reasonable steps to obtain compliance by its employees, consultants and agents with the Code of Conduct. |
| (3) | Seller shall not, and shall cause the Seller Group Entities to not, terminate, replace, amend or otherwise vary the principles set out in the Code of Conduct except as considered necessary or appropriate to adhere to higher standards or practices. |
| (4) | Within twelve months of the Closing Date, Seller shall join the United Nations Global Compact, implement the principles thereof and comply with the applicable reporting obligations thereunder. |
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| Section 6.16 | Anti-Corruption and Anti-Terrorism Laws |
The Seller PSA Entities shall, and shall cause each Seller Group Entity to (i) comply with applicable Anti-Terrorism Laws and Anti-Corruption Laws, (ii) refrain from dealing in, or otherwise engaging in any transaction related to, any property or interests in property obtained in contravention or blocked pursuant to any applicable Anti-Terrorism Laws or Anti-Corruption Laws, or engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any applicable Anti-Terrorism Laws or Anti-Corruption Laws, and (iii) take all measures appropriate in the circumstances (in any event as required by Applicable Law) to provide reasonable assurance that each Seller Group Entity is and will continue to be in compliance with applicable Anti-Terrorism Laws and Anti-Corruption Laws.
| Section 6.17 | Sanctions |
| (1) | Each Seller PSA Entity shall not, and shall cause each Seller Group Entity to not, engage in, or be a party to, any transaction or activity: |
| (a) | with a Sanctioned Person; |
| (b) | with a Person who is owned or controlled, either directly or indirectly, by, or is otherwise acting on behalf of, a Sanctioned Person; |
| (c) | that is for the benefit of a Sanctioned Person; or |
| (d) | that would amount to a breach of any applicable Sanctions. |
| (2) | Neither any Seller PSA Entity nor any of its shareholders, Affiliates, directors, officers, employees, agents or representatives will directly or indirectly, use the proceeds of the Deposit or any Silver Cash Price payable hereunder, or lend, contribute, or otherwise make available such proceeds to any Affiliate, joint venture partner, or other Sanctioned Person: |
| (a) | to fund any activities or business of or with a Sanctioned Person or for the benefit of a Sanctioned Person; or |
| (b) | in any manner that would be prohibited by applicable Sanctions or would otherwise cause Purchaser to be in breach of any applicable Sanctions. |
| (3) | Each Seller PSA Entity undertakes that it will not fund any of its operations or deliveries of Refined Silver hereunder with proceeds derived from any transaction that would be prohibited by applicable Sanctions or would otherwise cause Purchaser to be in breach of any applicable Sanctions. |
| Section 6.18 | Financial Covenants |
| (1) | The Seller PSA Entities shall ensure that at all times: |
| (a) | the ratio of Total Net Debt to EBITDA shall: |
| (i) | on any date during the period from the Closing Date to the date falling 12 months after the Closing Date: |
| (A) | be not more than 3.25:1 if there are no Copper Stream Obligations outstanding on that date; |
| (B) | be not more than 3:50:1 if any Copper Stream Obligations are outstanding on that date; and |
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| (ii) | on any date thereafter: |
| (A) | be not more than 3:00:1.00 if there are no Copper Stream Obligations outstanding on that date; |
| (B) | be not more than 3:25:1.00 if any Copper Stream Obligations are outstanding on that date; |
| (b) | prior to the Deposit Reduction Date, the Reserve Tail Ratio is projected to be greater than 25% at the latest maturity date of any and all Permitted Secured Debt referred to in paragraph (a) and (c) of the definition thereof; and |
| (c) | prior to the Deposit Reduction Date, the aggregate of Available Cash and Cash Equivalent Investments of MAC Australia and its Subsidiaries is at least US$30,000,000. During the period from the Closing Date to the date falling 12 months after the Closing Date, the calculation of Available Cash will include any undrawn portion of Facility B under the Senior Project Acquisition Facility. |
| (2) | The covenants in Section 6.18(1) shall be tested as at each date an Annual Compliance Certificate must be delivered in accordance with Section 5.1(5)(a). The covenants in Section 6.18(1)(a) and Section 6.18(1)(c) shall be tested by reference to the latest financial statements delivered under Section 5.1(5) and the covenant in Section 6.18(1)(b) shall be tested by reference to the Base Case Financial Model. |
| (3) | If a covenant set out in Section 6.18(1)(a) or Section 6.18(1)(c) is not satisfied at any time (a "Relevant Breach"), a Seller PSA Entity may procure that the Relevant Breach is cured in accordance with Section 6.18(4). |
| (4) | Subject to Section 6.18(5), a Relevant Breach may be cured by a Seller PSA Entity prepaying the Senior Project Acquisition Facility in part in such as amount as would result in the relevant covenant in Section 6.18(1) being complied with no later than 30 days after notifying Purchaser of an actual or anticipated breach of such covenant. The prepayment must be funded by either or both of: |
| (a) | a subscription for shares or other equity interests in Seller or other cash funding from a Seller PSA Entity; or |
| (b) | proceeds from any subordinated loans (or other financial accommodation) which are permitted as Permitted Indebtedness. |
| (5) | Seller shall not be entitled to the remedy set out in to Section 6.18(4) if: |
| (a) | Seller has already exercised the remedy three times since the Closing Date; or |
| (b) | during the period since the covenant was last tested. |
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| Section 6.19 | Taxation |
| (1) | Each Seller PSA Entity and the Project Owner shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that: |
| (a) | such payment is being contested in good faith; |
| (b) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to Purchaser under Section 5.1(5); and |
| (c) | such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have an Adverse Impact. |
| (2) | No Seller Group Entity may change its residence for Tax purposes. |
| (3) | Each Seller PSA Entity undertakes to ensure that the Tax Sharing Agreement and Tax Funding Agreement delivered pursuant to Section 3.2 are maintained in full force and effect and that each member of that Tax Consolidated Group complies with that Tax Sharing Agreement and Tax Funding Agreement, and they are not varied without Purchaser’s consent. |
| (4) | No Seller PSA Entity may enter into a deed of cross guarantee or assumption deed with any entity which is not a Seller PSA Entity for the purposes of ASIC Corporations (Wholly-owned Companies) Instrument 2016/785. |
ARTICLE 7
GUARANTEES AND SECURITY
| Section 7.1 | Guarantees and Security |
| (1) | On or prior to the Closing Date, MAC Australia shall (i) execute and deliver a guarantee in favour of Purchaser, in form and substance satisfactory to Purchaser, acting reasonably, guaranteeing the payment and performance, when due, of all Silver Stream Obligations (the “Holdco Guarantee”) and (ii) grant to Purchaser continuing and first ranking priority charges, pledges and security interests in, to and over all of its present and after-acquired property (subject only to Permitted Encumbrances) as security for its obligations under the Holdco Guarantee and the other Silver Stream Documents, all pursuant to the Silver Stream Security Documents listed below its name in Schedule G (collectively, the “Holdco Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (2) | On or prior to Closing Date, Seller shall grant to Purchaser continuing and first ranking priority charges, mortgages, assignments by way of security, pledges and security interests in, to and over all of its present and after-acquired property, other than the Excluded Shares, (subject only to Permitted Encumbrances) as security for its obligations hereunder and the other Silver Stream Documents, all pursuant to the Silver Stream Security Documents listed below its name in Part I of Schedule G (collectively, the “Seller Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (3) | Within 5 Business Days following the Whitewash Completion Date and in any event contemporaneously with the execution and delivery of any Transaction Security Document by the Project Owner, the Project Owner shall execute and deliver a guarantee in favour of Purchaser, in form and substance satisfactory to Purchaser, acting reasonably, guaranteeing the payment and performance, when due, of all Silver Stream Obligations (the “Project Owner Guarantee”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (4) | Within 5 Business Days following the Whitewash Completion Date and in any event contemporaneously with the execution and delivery of any Transaction Security Document by the Project Owner, Project Owner shall grant to Purchaser continuing and first ranking priority charges, pledges and security interests in, to and over all of its present and after-acquired property (subject only to Permitted Encumbrances) as security for its obligations under the Project Owner Guarantee and the other Silver Stream Documents, all pursuant to the Silver Stream Security Documents listed below its name in Schedule G (collectively, the “Project Owner Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
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| (5) | The Seller PSA Entities shall cause each Seller Group Entity to whom any indebtedness is owed by a Seller PSA Entity (including pursuant to a Related Party Transaction), to execute and deliver a Subordination Deed. |
| (6) | The Seller PSA Entities shall cause all such general security agreements, assignments, real estate mortgages, mining mortgages over the tenements, control agreements, pledges and other agreements, instruments and documents to be executed and delivered, and all such further acts and things to be taken, as Purchaser may from time to time reasonably require to obtain, perfect, maintain and preserve first ranking prior perfected charges and security interests (subject to prior ranking Permitted Encumbrances) in, to and over all of each Seller PSA Entity’s property and assets (other than the Excluded Shares) in all appropriate jurisdictions. In addition to the foregoing, in the event of any acquisition, extension, renewal, replacement, conversion or substitution of any of the Mining Properties (or any part thereof), then Seller PSA Entities shall immediately notify Purchaser of such event and execute and deliver, or cause to be executed and delivered, all agreements, documents, instruments and registrations, and do all such further acts and things as Purchaser may require, to obtain perfect and preserve a first ranking security interest in such tenement, right or interest or resulting tenement, right or interest, or such other Mining Property, as security for the payment and performance, when due, of all Silver Stream Obligations. |
| (7) | The Seller PSA Entities shall not, and shall cause each other Seller Group Entity to not, contest in any manner the effectiveness, validity, binding nature or enforceability of this Agreement or any of the Silver Stream Security Documents. |
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
| Section 8.1 | Representations and Warranties of the Seller PSA Entities |
The Seller PSA Entities, acknowledging that Purchaser is entering into this Agreement in reliance thereon, hereby jointly and severally make:
| (a) | as of the date of execution of this Agreement, the representations and warranties to Purchaser set forth in Parts 1 and 3 of Schedule C; and |
| (b) | as at the Closing Date, the representations and warranties to Purchaser set forth in Parts 1, 2 and 3 of Schedule C. |
Such representations and warranties shall be deemed to be repeated (on the date of the relevant certificate) to the extent that they are certified to be true and correct in a certificate delivered by any Seller PSA Entity pursuant to Section 3.2(1) and Schedule K and each Annual Compliance Certificate.
| Section 8.2 | Representations and Warranties of Purchaser |
Purchaser, acknowledging that the Seller PSA Entities are entering into this Agreement in reliance thereon, hereby makes, as of the date of execution of this Agreement, the representations and warranties to the Seller PSA Entities set forth in Schedule D.
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| Section 8.3 | Survival of Representations and Warranties |
The representations and warranties set forth above shall survive the execution and delivery of this Agreement.
| Section 8.4 | Knowledge |
Where any representation or warranty contained in this Agreement is expressly qualified by reference to the “knowledge” of the Seller PSA Entities, it shall be deemed to refer to the actual knowledge of any director or officer of the Seller PSA Entities, and all knowledge which such persons would have if such Person made due enquiry into the relevant subject matter having regard to the role and responsibilities of such Person as an officer or director of the Seller PSA Entities, as applicable.
ARTICLE 9
DEFAULTS AND DISPUTES
| Section 9.1 | Events of Default |
Each of the following events or circumstances constitutes an event of default (each, an “Event of Default”):
| (a) | Seller fails to sell and deliver Refined Silver to Purchaser on the terms and conditions set forth in this Agreement within ten Business Days of receipt of notice from Purchaser notifying Seller of such default; |
| (b) | any Seller PSA Entity is in breach or default of any of its covenants or obligations set forth in any Silver Stream Document in any material respect (other than a breach or default of the covenants and obligations referenced in Section 9.1(a)), and such breach or default is not remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice of such breach or default, and (ii) such Person becoming aware of such breach; |
| (c) | any representations or warranty made or deemed to be made by a Seller PSA Entity in any Silver Stream Document is or proves to be incorrect or misleading in any material respect (or in any respect in the case of representations and warranties that are qualified by materiality), and such breach or default is not remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice, and (ii) such Person becoming aware of the misrepresentation; |
| (d) | any Financial Indebtedness of any Seller PSA Entity (i) is not paid when due nor within any original grace period, or (ii) is declared to be or otherwise becomes due and payable before its specified maturity date as a result of a default or review event (however described) or any commitment for any Financial Indebtedness of any Seller PSA Entity is cancelled or suspended by a creditor or any of them as a result of an event of default or review event (however described) or any creditor of any Seller PSA Entity becomes entitled to declare any Financial Indebtedness due and payable prior to its stated maturity date as a result of an event of default or review event (however described). Provided that, no Event of Default will occur under this Section 9.1(d) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling with this section is less than US$10,000,000 (or its equivalent in any other currency or currencies); |
| (e) | any action is taken by a Person to enforce any Encumbrance in, over or against any of the Collateral or any of the assets used in connection with the Mine which if successful would result in an Adverse Impact; |
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| (f) | any substantial portion of the Stream Properties or other Project Assets is expropriated by a Governmental Authority, or a Governmental Authority otherwise takes any action the result of which is that all or substantially all of the rights, privileges and benefits pertaining to or associated with all or any part of the Stream Properties cease being for the benefit or entitlement of the Project Owner, whether as a result of ceasing to own such part of the Stream Properties or otherwise; |
| (g) | a provision of a Silver Stream Document is or becomes or is claimed by a party other than Purchaser to be wholly or partly invalid, void, voidable or unenforceable in any material respect; |
| (h) | any event or circumstance where the Intercreditor Deed becomes wholly or partly invalid, void, voidable or unenforceable or illegal in any respect; |
| (i) | it is or becomes unlawful for a Seller PSA Entity to perform any of its obligations under the Silver Stream Documents or any Security created or expressed to be created or evidenced by the Silver Stream Security Documents ceases to be effective or to constitute an Encumbrance having the priority stipulated herein over the Collateral (subject to any Permitted Encumbrances) and any such default has not been remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice of such event or default, and (ii) any Seller PSA Entity becoming aware of such event or default, provided that: (A) such default is capable of being cured; and (B) Purchaser shall not suffer any material prejudice as a result of the delay; |
| (j) | the occurrence of a Change of Control of any Seller PSA Entity, other than a Change of Control of Seller that is permitted in accordance with Section 6.6(2); |
| (k) | the occurrence of an Insolvency Event of Default; |
| (l) | any event or series of events, whether related or not, occurs (including a material adverse change in the business, assets or financial condition of any Seller PSA Entity or the value of the Collateral) which has or is reasonably likely to have an Adverse Impact; |
| (m) | any Seller PSA Entity repudiates a Silver Stream Document or evidences an intention to repudiate a Silver Stream Document; |
| (n) | the shares of Seller are removed from the official list of the New York Stock Exchange; or |
| (o) | any Event of Default under and as defined in the Copper Purchase Agreement. |
| Section 9.2 | Remedies |
| (1) | If an Event of Default occurs and is continuing, Purchaser shall have the right, upon written notice to Seller, at its option and in addition to and not in substitution for any other remedies available at law or equity, to take any or all of the following actions in its sole discretion: |
| (a) | demand all amounts and deliveries owing by any of the Seller PSA Entities to Purchaser, including pursuant to Section 9.3, and set off any such amount in accordance with Section 10.5; |
| (b) | bring an action for provisional remedies or institute arbitration proceedings for damages or specific performance, in each case, in accordance with Section 9.5; |
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| (c) | terminate this Agreement by written notice to the Seller PSA Entities and, without limiting Section 9.2(1)(a) and Section 9.2(1)(b), demand all Losses suffered or incurred as a result of the occurrence of such Event of Default and termination, including damages based on Purchaser’s loss of the benefits of this Agreement calculated as the greater of (i) the IRR Amount, and (ii) Losses determined in accordance with Section 9.3(4), and all such deliveries and amounts shall become immediately due and payable upon demand; or |
| (d) | enforce the Security. |
| (2) | The Parties hereby acknowledge and agree that: (i) Purchaser will be damaged by an Event of Default; (ii) it would be impracticable or extremely difficult to fix the actual damages resulting from an Event of Default; (iii) any sums payable in accordance with Section 9.2(1)(c) (including any sums based on the Stream NPV) with respect to an Event of Default are in the nature of liquidated damages, not a penalty, and are fair and reasonable; and (iv) the amount payable in accordance with Section 9.2(1)(c) or with respect to an Event of Default represents a reasonable estimate of fair compensation for the Losses that may reasonably be anticipated from such Event of Default in full and final satisfaction of all amounts owed in respect of such Event of Default. |
| Section 9.3 | Indemnity |
| (1) | Each of the Parties agrees to indemnify and save harmless the other Parties and their respective Affiliates and directors, officers, employees and agents from and against any and all Losses suffered or incurred by any of the foregoing Persons in connection with: |
| (a) | any inaccuracy in or default or breach of any representation or warranty of such Party contained in this Agreement; |
| (b) | any breach or non-performance by such Party of any covenant or obligation to be performed by it pursuant to this Agreement; |
| (c) | in the case of indemnification by any of the Seller PSA Entities, an Event of Default; and |
| (d) | pursuing any remedies to which a Party is entitled hereunder. |
| (2) | This Section 9.3 is: |
| (a) | a continuing obligation, separate and independent from the Parties’ other obligations and survives the termination of this Agreement; and |
| (b) | absolute and unconditional and unaffected by anything that might have the effect of prejudicing, releasing, discharging or affecting in any other way the liability of the Party giving the indemnity. |
| (3) | It is not necessary for a Party to incur expense or make payment before enforcing a right of indemnity under this Agreement. |
| (4) | In determining the Losses suffered or incurred by Purchaser in connection with or relating to any future period (including in connection with any claim for anticipatory breach, any claim in a proceeding in connection with an Insolvency Event of Default where this Agreement is disclaimed, or in connection with the frustration, fundamental breach or termination of this Agreement other than in accordance with Section 4.1), such Losses shall include the net present value of the Refined Silver that would have reasonably been expected to have become due to be delivered by Seller to Purchaser hereunder and all other amounts that would have reasonably been expected to have become payable to Purchaser hereunder (including any amounts payable pursuant to Section 4.2), but for the event giving rise to the need to determine such Losses, less the payments that would have reasonably been expected to have become payable to Seller by Purchaser with respect to such Refined Silver, all determined in accordance with Schedule F (the “Stream NPV”). The Stream NPV shall be based on the principles, assumptions and procedures set forth on Schedule F. |
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| Section 9.4 | Disputed Reports |
| (1) | Any invoice or report provided pursuant to Section 5.1 and all deliveries of Refined Silver under this Agreement shall be deemed final and conclusive for all purposes with no adjustments, revisions or obligation to deliver any additional Refined Silver or return any delivered Payable Silver, or make or return any additional payment in respect of delivered Payable Silver, unless either Party notifies the other in writing (a “Dispute Notice”) that it disputes an invoice, report or quantity of Refined Silver previously delivered within three years from the date of delivery of such invoice, report or quantity of Refined Silver. |
| (2) | Purchaser and Seller shall have 60 days from the date the Dispute Notice is delivered to resolve the dispute. If Purchaser and Seller have not resolved the dispute within such period, then Purchaser shall have the right to require Seller to deliver an Auditor’s Report with respect to the subject matter of the dispute. Each of the parties agrees to deliver such Books and Records as may be reasonably requested by the Person completing the Auditor’s Report. |
| (3) | The costs of the Auditor’s Report shall be paid by Purchaser, unless the Auditor’s Report concludes that the Payable Silver for the period covered by the Dispute Notice is greater than the number of ounces of Refined Silver actually delivered in respect of such period, in which event the cost of the Auditor’s Report shall be for the account of Seller. |
| Section 9.5 | Disputes |
If a Dispute arises between the Parties (and for this purpose any of the Seller Group Entities involved in the Dispute shall be deemed to be one Party, and Purchaser the other Party), including with respect to an Auditor’s Report, the Parties shall promptly and in good faith attempt to resolve such Dispute through negotiations conducted in the following manner:
| (a) | the disputing Party shall give written notice to the other Parties to the Dispute, which notice shall include a statement of the disputing Party’s position and a summary of the arguments supporting its position; |
| (b) | within 20 days after receipt of such notice, each receiving Party shall submit a written response to the disputing Party which shall also include a statement of the receiving Party’s position and a summary of the arguments supporting its position; |
| (c) | the Chief Executive Officer or President of each of the Parties to the Dispute shall meet at a mutually acceptable time and place, but in any event within 30 days after issuance of the disputing Party’s written notice to attempt to resolve the Dispute; and |
| (d) | if the Dispute has not been resolved within ten days after such meeting, it shall be settled by binding arbitration administered by the International Center for Dispute Resolution, and any Party may so refer such dispute, controversy or claim to binding arbitration. Such referral to binding arbitration shall be to one qualified arbitrator in accordance with the Arbitration Rules, which Arbitration Rules shall govern such arbitration proceeding. The place of arbitration shall be London, England, and the language of arbitration shall be English. The determination of such arbitrator shall be final and binding upon the Parties and the costs of such arbitration shall be as determined by the arbitrator. Judgment on the award may be entered in any court having jurisdiction. The Parties covenant and agree that they shall conduct all aspects of such arbitration having regard at all times to expediting the final resolution of such arbitration. This Section 9.5 shall not preclude the Parties from seeking provisional remedies in aid of arbitration from a court of competent jurisdiction. |
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| (e) | The provisions of this Agreement providing for the resolution of Disputes shall not operate to prevent recourse to any court by Purchaser with respect to injunctions, receiving orders and orders regarding the detention, preservation and inspection of property, including the Mining Properties or any part(s) thereof, or whenever enforcement of an arbitration award reasonably requires access to any remedy which an arbitrator has no power to award or enforce. Each Seller Group Entity expressly attorns to such proceedings and waives any objections on the basis of jurisdiction, including forum non conveniens. |
| Section 9.6 | Insolvency Event |
The Parties acknowledge and agree that, if, as a result of any Insolvency Event of Default affecting any Seller PSA Entity, a Governmental Authority of competent jurisdiction permits such Seller PSA Entity to repudiate its obligations under this Agreement, such repudiation will not affect the obligations of the other Seller Group Entities, and this Agreement will remain in full force with respect to the other Seller Group Entities.
ARTICLE 10
ADDITIONAL PAYMENT TERMS
| Section 10.1 | Payments |
All cash payments due by one Party to another under this Agreement shall be made in U.S. dollars and shall be made by wire transfer in immediately available funds to the bank account or accounts designated by the other Party in writing from time to time.
| Section 10.2 | Taxes |
| (1) | All deliveries of Refined Silver and all amounts paid or retained hereunder by the Seller PSA Entities to Purchaser shall be made without any deduction, withholding, charge or levy for or on account of any Taxes, all of which shall be for the account of the Party making such delivery or payment. If any such Taxes are so required to be deducted, withheld, charged or levied by the Seller PSA Entity making such delivery or payment, then (i) Seller shall make, in addition to such delivery or payment, such additional delivery or payment as is necessary (“Additional Amounts”) to ensure that the net amount received by Purchaser (free and clear and net of any such Taxes, including any Taxes required to be deducted, withheld, charged or levied on any such additional amount) equals the full amount Purchaser would have received had no such deduction, withholding, charge or levy been required and (ii) the Seller PSA Entities shall pay the full amount deducted to the relevant taxation or other authority in accordance with Applicable Law; provided, however, that no such Additional Amount shall be made in respect of Taxes to the extent such Taxes are Excluded Taxes. |
| (2) | If Purchaser becomes liable for any Tax, other than Excluded Taxes, imposed on any deliveries or payments under this Agreement, the Seller PSA Entities shall jointly and severally agree to indemnify Purchaser for such Tax, and the indemnity payment shall be increased as necessary so that after the imposition of any Tax on the indemnity payment (including Tax in respect of any such increase in the indemnity payment), Purchaser shall receive the full amount of Taxes for which it is liable, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Seller by Purchaser shall be conclusive absent manifest error. |
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| (3) | If Purchaser is entitled to an exemption from or reduction of Taxes under the law of the jurisdiction in which Seller is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to any payments made in respect of this Agreement, Purchaser shall, at the request of Seller, deliver to Seller, at the time or times prescribed by Applicable Law or reasonably requested by Seller, such properly completed and executed documentation prescribed by Applicable Law (if any) as will permit such payments to be made without withholding or at a reduced rate of withholding Taxes. In addition, Purchaser, if requested by Seller, shall deliver such other documentation prescribed by Applicable Law (if any) or reasonably requested by Seller as will enable Seller to determine whether or not Purchaser is subject to withholding or information reporting requirements. Notwithstanding the foregoing, Purchaser shall not be required to deliver any documentation pursuant to this Section that Purchaser is not legally able to deliver. |
| (4) | If Purchaser determines, in its sole discretion, acting reasonably, that it has received a refund of any Taxes as to which it has received additional deliveries pursuant to Section 10.2(1) or additional payments pursuant to Section 10.2(2), it shall pay to Seller an amount equal to such refund (but only to the extent of additional deliveries made, or additional amounts paid, by Seller under this Section 10.2 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of Purchaser, as the case may be, and without interest (other than any net after-Tax interest paid by the relevant Governmental Authority with respect to such refund). Seller, upon the request of Purchaser, agrees to repay to Purchaser the amount paid by or to Seller (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if Purchaser is required to repay such refund to such Governmental Authority. This Section 10.2(4) shall not be construed to require Purchaser to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to Seller or any other Person, to arrange its affairs in any particular manner or to claim any available refund or reduction. |
| Section 10.3 | New Tax Laws |
In the event that (i) any new Tax is implemented, (ii) there shall occur any revision in, implementation of, amendment to or interpretation of any existing Tax, (in each of (i) or (ii) that has an adverse effect on any of the Parties or any of their Affiliates in respect of the transactions contemplated by this Agreement), or (iii) either Party shall identify changes to the ownership structure of the Seller Group Entities on the one hand or Purchaser or its Affiliates on the other hand, that will materially enhance the economic benefit they enjoy from this Agreement, then Seller on the one hand, and Purchaser on the other hand, agree that they shall negotiate in good faith with each other to amend this Agreement so that the other Parties and their Affiliates either are no longer adversely affected by any such enactment, revision, implementation, amendment or interpretation, or can achieve the material enhancement to the economic benefit they enjoy from this Agreement, as the case may be; provided that any amendment to this Agreement shall not have any adverse impact on Seller and its Affiliates on the one hand, or Purchaser and its Affiliates on the other hand.
| Section 10.4 | Interest |
| (1) | The dollar value of any overdue deliveries from time to time outstanding (such value, for the purposes of calculating interest, to be determined based on the Silver Market Price on the day such deliveries were due hereunder) shall bear interest at rate equal to Base Interest Rate plus 2% per annum taking into account the actual number of days occurring during the period commencing as of the date such deliveries first became past due and ending on the date such deliveries are made and accrued interest is paid in full. |
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| (2) | Without duplicating interest payable in accordance with Section 10.4(1), any dollar amount not paid when due shall bear interest at rate equal to Base Interest Rate plus 2% per annum taking into account the actual number of days occurring during the period commencing as of the date such amount first became past due (which shall be deemed to be the date of termination of this Agreement in the event an amount is owed as a result of Section 9.2(1)(c) and the date any Loss is first suffered or incurred in the event an amount is owed as a result of Section 9.3(1)) and ending on the date such payment and accrued interest are paid in full. |
| (3) | Interest owing under Section 10.4(1) and Section 10.4(2) shall be immediately payable on demand and be calculated on the basis of a year of 360 days. If unpaid, interest owing under Section 10.4(1) and Section 10.4(2) will be compounded with the overdue amount at the end of each month but will remain immediately due and payable on demand. The rate of interest payable on such late deliveries or payments will change simultaneously with changes in the Base Interest Rate from time to time. |
| Section 10.5 | Set Off |
Except as set out in Section 2.2(b), any Refined Silver or dollar amount not delivered or paid, as the case may be, when due by a Party may be set off by the other Party against any dollar amount or Refined Silver owed to such Party by the other Party. Any amount of Refined Silver set off and withheld by Seller against any non-payment by Purchaser, including any failure to pay for Refined Silver when due in accordance with Section 2.5(2), shall be valued at the Silver Market Price as of the date that such amount of Refined Silver first became payable to Purchaser. Any dollar amount set off and withheld against any Refined Silver shall result in a reduction in an amount of Refined Silver otherwise to be delivered by that number of ounces equal to the dollar amount set-off divided by the Silver Market Price as of the day such dollar amount first became payable.
| Section 10.6 | Judgment Currency. |
If, for the purpose of obtaining or enforcing judgment against any party in any court in any jurisdiction, it becomes necessary to convert into a particular currency (the “Judgment Currency”) an amount due in another currency (the “Indebtedness Currency”) under this Agreement, that conversion will be made at the rate of exchange, which shall be that at which, in accordance with its normal banking procedures, the non-defaulting party could purchase the Indebtedness Currency with the Judgment Currency on the Business Day immediately preceding the date on which judgment is given (or if received on a day other than a Business Day, on the next succeeding Business Day), or, if permitted by law, on the day on which the judgment is paid or satisfied (the “Rate of Exchange”). If, as a result of a change in the Rate of Exchange between the date of judgment and the date of actual payment, the conversion of the Judgment Currency into Indebtedness Currency results in the non-defaulting party receiving less than the full amount of Indebtedness Currency payable to the non-defaulting party, the defaulting party agrees to pay the non-defaulting party an additional amount (and in any event not a lesser amount) as may be necessary to ensure that the amount received is not less than the full amount of Indebtedness Currency payable by the defaulting party on the date of judgment. Any additional amount due under this Section 10.6 will be due as a separate debt, gives rise to a separate cause of action, and will not be affected by judgment obtained for any other sums due under this Agreement.
ARTICLE 11
GENERAL
| Section 11.1 | Further Assurances |
Each Party shall execute all such further instruments and documents and do all such further actions as may be necessary to effectuate the documents and transactions contemplated in this Agreement, in each case at the cost and expense of the Party requesting such further instrument, document or action, unless expressly indicated otherwise.
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| Section 11.2 | No Joint Venture |
Nothing herein shall be construed to create, expressly or by implication, a joint venture, mining partnership, commercial partnership, agency relationship, fiduciary relationship, or other partnership relationship between Purchaser and the Seller PSA Entities.
| Section 11.3 | Governing Law |
| (1) | This Agreement shall be governed by, and construed in accordance with, the laws of New South Wales, Australia. |
| (2) | The United Nations Vienna Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. |
| Section 11.4 | Costs and Expenses |
Seller shall pay (i) all reasonable fees, charges and disbursements of counsel in each applicable jurisdiction incurred by Purchaser in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Silver Stream Documents, the registration and perfection of Security in accordance with this Agreement (including any stamp duty or taxes and any request or demand under the PPSA) and any actual or proposed amendments, modifications or waivers of the provisions of any Silver Stream Document, (ii) all out of pocket costs and expenses incurred by Purchaser, including the fees, charges and disbursements of counsel, in connection with the enforcement of, or preservation of any of its rights under, this Agreement and the other Silver Stream Documents, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of the transactions contemplated under the Silver Stream Documents, and (iii) all reasonable out of pocket costs and expenses incurred by Purchaser (solely in its capacity as such), including the fees, charges and disbursements of counsel, in connection with any Change of Control or any other transfer of Equity Interests of, or corporate reorganization involving, any Seller PSA Entity.
| Section 11.5 | Survival |
Without limiting any other provision of this Agreement, the following provisions shall survive termination of this Agreement: Section 4.2, Section 5.2, Section 5.5, Section 7.1, Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section 10.1, Section 10.2, Section 10.4, Section 10.5, Section 10.6, Section 11.4 and such other provisions of this Agreement as are required to give effect thereto.
| Section 11.6 | Notices |
| (1) | Any notice or other communication (in each case, a “notice”) required or permitted to be given hereunder shall be in writing and shall be delivered by hand, prepaid courier or transmitted by electronic mail transmission (if available) addressed to: |
| (a) | If to Seller, to: |
[***]
Attention: [***]
Email: [***]
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| (b) | If to MAC Australia, to: |
c/o Squire Patton Boggs
Level 21, 300 Murray St.
Perth WA 6000
Attention: Chris Rosario
Email: chris.rosario@squirepb.com
| (c) | If to Purchaser, to: |
[***]
Attention: [***]
E-mail: [***]
with respect to any notices pursuant to Section 2.4, with a copy by electronic mail to (which shall not constitute notice):
Email: [***]
| (2) | Any notice will be deemed to have been given and received: |
| (a) | if delivered by hand or courier in accordance with Section 11.6(1), then on the day of delivery to the recipient Party if such date is a Business Day and such delivery is received before 4:00 pm at the place of delivery otherwise such notice will be deemed to have been given and received on the first Business Day following the date of delivery; and |
| (b) | if sent by email transmission in accordance with Section 11.6(1) and successfully transmitted prior to 4:00 pm on a Business Day (recipient Party time), then on that Business Day, and if successfully transmitted after 4:00 pm or if transmitted on a day that is not a Business Day then such notice will be deemed to be given and received on the first Business Day immediately following the date of transmission. |
Either Party may change its email or physical address for delivery of notices from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the Party at its changed address.
| Section 11.7 | Press Releases |
The Parties shall jointly plan and co-ordinate, and shall cause their respective Affiliates to jointly plan and co-ordinate, any public notices, press releases, and any other publicity concerning this Agreement and the transactions contemplated by this Agreement unless a Party (or its Affiliate) is required to make such disclosure pursuant to Applicable Law in circumstances where prior consultation with the other Party is not practicable. To the extent reasonably practicable, a copy of such disclosure shall be provided to the other Party at such time as it is made publicly available.
| Section 11.8 | Amendments |
This Agreement may not be changed, amended or modified in any manner, except pursuant to an instrument in writing signed on behalf of each of Seller and Purchaser, and the other Seller PSA Entities shall be deemed to have consented to any change, amendment or modification to any provision of this Agreement so agreed to by Seller and Purchaser.
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| Section 11.9 | Beneficiaries |
This Agreement is for the sole benefit of the Parties and their successors and permitted assigns and, except as expressly contemplated herein, nothing herein is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature or kind whatsoever under or by reason of this Agreement.
| Section 11.10 | Entire Agreement |
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the Parties with respect thereto.
| Section 11.11 | Waivers |
Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given. No failure on the part of any Party to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any such right shall preclude any other or further exercise of such right or the exercise of any other right.
| Section 11.12 | Assignment |
This Agreement shall enure to the benefit of and shall be binding on and enforceable by the Parties and their respective successors and permitted assigns. The Seller PSA Entities shall not Transfer all or any part of this Agreement without the prior written consent of Purchaser. Purchaser shall be entitled at any time and from time to time to Transfer all or any part of this Agreement without the prior written consent of the other Parties. Purchaser shall be entitled at any time and from time to time to grant or allow to exist an Encumbrance in respect of this Agreement in favour of its lenders. Notwithstanding the foregoing, this Agreement may not be transferred in whole or in part to a Sanctioned Person.
| Section 11.13 | Invalidity and Unenforceability |
If a provision of this Agreement is wholly or partially invalid or unenforceable in a jurisdiction:
| (a) | it is to be read down or severed in that jurisdiction to the extent of the invalidity or unenforceability; and |
| (b) | that fact does not affect the validity or enforceability of that provision in another jurisdiction or the remaining provisions. |
It is hereby declared to be the intention of the Parties that this Agreement would have been executed without reference to any portion which may, for any reason, hereafter be declared or held invalid.
| Section 11.14 | PPSA Provisions |
| (1) | Where Purchaser has a security interest (as defined in the PPSA) under any Silver Stream Document, to the extent the law permits: |
| (a) | for the purposes of sections 115(1) and 115(7) of the PPSA: |
| (i) | Purchaser need not comply with section 95, 118, 121(4), 125, 130, 132(3)(d) or 132(4) of the PPSA; and |
| (ii) | sections 142 and 143 of the PPSA are excluded; |
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| (b) | for the purposes of section 115(7) of the PPSA, Purchaser need not comply with sections 132 and 137(3); |
| (c) | each Party waives its right to receive from Purchaser any notice required under the PPSA (including a notice of a verification statement); |
| (d) | if Purchaser exercises a right, power or remedy in connection with that security interest, that exercise is taken not to be an exercise of a right, power or remedy under the PPSA unless Purchaser states otherwise at the time of exercise. However, this Section 11.14 does not apply to a right, power or remedy which can only be exercised under the PPSA; and |
| (e) | if the PPSA is amended to permit the Parties to agree not to comply with or to exclude other provisions of the PPSA, Purchaser may notify the Seller PSA Entities that any of these provisions is excluded, or that Purchaser need not comply with any of these provisions. |
This does not affect any rights a person has or would have other than by reason of the PPSA and applies despite any other section in any Silver Stream Document.
| (2) | Whenever Purchaser requests a Seller PSA Entity to do anything: |
| (a) | to ensure any security interest (as defined in the PPSA) arising pursuant to a Silver Stream Document or other Encumbrance created under any Silver Stream Document is fully effective, enforceable and perfected with the contemplated priority; |
| (b) | for more satisfactorily assuring or securing to Purchaser the property the subject of any such security interest or other Encumbrance in a manner consistent with the Silver Stream Documents; or |
| (c) | for aiding the exercise of any power in respect of any such security interest or other Encumbrance in any Silver Stream Document, |
the Seller PSA Entity shall do it promptly at its own cost. This may include obtaining consents, signing documents, getting documents completed and signed and supplying information, delivering documents and evidence of title and executed blank transfers, or otherwise giving possession or control with respect to any property the subject of any security interest or Encumbrance.
| Section 11.15 | Counterparts |
This Agreement may be executed in one or more counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement.
[The remainder of this page was intentionally left blank]
IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first written above.
| OSISKO BERMUDA LIMITED | ||
| Per: | /s/ Michael Spencer | |
| Name: Michael Spencer | ||
| Title: Managing Director | ||
| METALS ACQUISITION LIMITED | ||
| Per: | /s/ Mick McMullen | |
| Name: Mick McMullen | ||
| Title: Chief Executive Officer | ||
| METALS ACQUISITION CORP | ||
| Per: | /s/ Jaco Crouse | |
| Name: Jaco Crouse | ||
| Title: Chief Financial Officer | ||
| Executed by Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) in accordance with section 127 of the Corporations Act 2001 (Cth): | |||
| /s/ Mick McMullen | /s/ Jaco Crouse | ||
| Signature of director | Signature of company secretary/director | ||
| Mick McMullen | Jaco Crouse | ||
| Full name of director who states that they are a director of Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) | Full name of company secretary/director who states that they are a company secretary/director of Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) |
Exhibit 10.2
CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL,
AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on March 20, 2023, by and among Metals Acquisition Limited, a private limited company newly incorporated under the laws of Jersey, Channel Islands (the Issuer”), Metals Acquisition Corp, a Cayman Islands exempted company (the “Company”), and the subscriber named on the signature page hereto (“Subscriber”).
WHEREAS, pursuant to, and upon the terms and subject to the conditions set forth in, the Share Sale Agreement dated as of March 17, 2022, as amended by the Deed of Consent and Covenant, dated as of November 22, 2022 (as may be amended, supplemented, or otherwise modified from time to time, the “Share Sale Agreement”), by and among the Issuer, the Company, Metals Acquisition Corp. (Australia) Pty Ltd, an Australian private company (“MAC-Sub”) and Glencore Operations Australia Pty Limited, an Australian private company (“Glencore”), the following transactions (collectively, the “Transaction”) will occur on the Closing Date (as defined below), subject to the consummation of the Merger (as defined below): (i) MAC-Sub will acquire from Glencore 100% of the issued share capital of Cobar Management Pty Limited, an Australian private company (“CMPL”); (ii) the Issuer and/or the Company will pay at least $775,000,000 (with the potential to be scaled up to $875,000,000 depending on equity demand) to Glencore; (iii) the Issuer will issue up to 10,000,000 of the Issuer’s ordinary shares of a par value of $0.0001 per share (the “Ordinary Shares”) to Glencore (with Glencore having the option to scale down to none subject to the Company and the Issuer raising sufficient equity); (iv) Glencore will be entitled to a $75,000,000 deferred cash payment tied to a future equity raise, which may be converted into additional equity; (v) Glencore will be entitled to two separate $75,000,000 contingent payments tied to future copper prices; and (vi) the Issuer and MAC-Sub will enter into a net smelter royalty pursuant to which after the Closing (as defined below), CMPL will pay to Glencore a royalty of 1.5% of all net smelter copper concentrate produced from the mining tenure held by CMPL at the time of the Closing; and
WHEREAS, in connection with the Transaction, pursuant to that certain Plan of Merger (the “Plan of Merger”), prior to the Closing Date (the “Effective Time”), the Company will be merged with and into the Issuer (the “Merger”), with the Issuer continuing as the surviving company (the “Issuer”) and CMPL being an indirect subsidiary of the Issuer following the Transaction; and
WHEREAS, in connection with the Transaction, on or about the date of this Subscription Agreement, Subscriber has entered into a silver purchase agreement, among Subscriber, the Company, the Issuer and MAC-Sub (the “Silver Purchase Agreement”), which is expected to be consummated immediately prior to or substantially concurrently with, and contingent upon, the consummation of the Transaction; and
WHEREAS, in connection with the Transaction, Subscriber desires to subscribe for and purchase from the Issuer, immediately prior to or substantially concurrently with, and contingent upon, the consummation of the Transaction, that number of the Ordinary Shares, set forth on the signature page hereto (the “Subscribed Shares”) for a purchase price of $10.00 per share (the “Per Share Subscription Price” and the aggregate of such Per Share Subscription Price for all Subscribed Shares being referred to herein as the “Subscription Amount”), and the Issuer desires to issue and sell to Subscriber the Subscribed Shares in consideration of the payment of the Subscription Amount by or on behalf of Subscriber to the Issuer; and
WHEREAS, substantially concurrently with and following the execution of this Subscription Agreement, the Issuer and the Company will enter into subscription agreements (the “Other Subscription Agreements” and, together with this Subscription Agreement, the “Subscription Agreements”) with certain other accredited investors (the “Other Subscribers” and, together with Subscriber, the “Subscribers”), which are on substantially the same terms as the terms of this Subscription Agreement (other than the amount of Ordinary Shares to be subscribed for and purchased by the Other Subscribers), pursuant to which such investors shall agree to purchase on the closing date of the Transaction (the “Closing Date”) Ordinary Shares (the “Other Subscribed Shares” and, together with the Subscribed Shares, the “Aggregate Subscribed Shares”).
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, Subscriber hereby subscribes for and agrees to purchase at the Closing (as defined below), and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Subscription Amount, the Subscribed Shares (such subscription and issuance, the “Subscription”). The Issuer hereby expressly covenants and agrees that the Subscription Amount shall be used exclusively for the Transaction or after the consummation thereof by the Issuer and its subsidiaries (including CMPL) for working capital and other corporate purposes.
2. Closing.
(a) The consummation of the Subscription (the “Closing”) shall be contingent upon the Merger and the consummation of the Silver Purchase Agreement, and shall be contingent upon and occur on the Closing Date immediately prior to or concurrently with, the consummation of the Transaction.
(b) At least fifteen (15) Business Days before the anticipated Closing Date, the Issuer shall deliver written notice to Subscriber (the “Closing Notice”) specifying (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Subscription Amount to the Escrow Agent (as defined below). No later than three (3) Business Days after receiving the Closing Notice, Subscriber shall deliver to the Issuer such information as is reasonably requested in the Closing Notice in order for the Issuer to issue the Subscribed Shares to Subscriber. Ten (10) Business Days prior to the expected Closing Date specified in the Closing Notice, Subscriber shall deliver to Continental Stock Transfer & Trust Company or such other entity as is reasonably agreed to by the parties, as escrow agent (the “Escrow Agent”), the Subscription Amount which shall be held in a segregated escrow account for the benefit of the Subscriber (the “Escrow Account”) until the Closing pursuant to the terms of a customary escrow agreement, which shall be on terms and conditions reasonably satisfactory to the Subscriber to be entered into by the Issuer and the Escrow Agent (the “Escrow Agreement”), in cash via wire transfer to the account specified in the Closing Notice. At the Closing, the Issuer shall issue the Subscribed Shares to Subscriber and cause the Subscribed Shares to be registered in book entry form, free and clear of any liens or other restrictions (other than those arising under this Subscription Agreement or state or federal securities laws), in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable. In the event that the consummation of the Transaction does not occur within ten (10) Business Days after the anticipated Closing Date specified in the Closing Notice, the Escrow Agent (or the Issuer, if the Subscription Amount has been released by the Escrow Agent) shall promptly (but in no event later than ten (10) Business Days after the anticipated Closing Date specified in the Closing Notice) return the funds so delivered by Subscriber to the Escrow Agent by wire transfer in immediately available funds to the account specified by Subscriber; provided that, unless this Subscription Agreement has been validly terminated pursuant to Section 7 hereof, neither the failure of the Closing to occur on the Closing Date specified in the Closing Notice nor such return of funds shall (x) terminate this Subscription Agreement, (y) be deemed to be a failure of any of the conditions to Closing set forth in this Section 2, or (z) otherwise relieve any party of any of its obligations hereunder, including Subscriber’s obligation to redeliver the Subscription Amount and purchase the Subscribed Shares at the Closing in the event the Issuer delivers a subsequent Closing Notice. For the purposes of this Subscription Agreement, “Business Day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed. Prior to or at the Closing, Subscriber shall, if required, deliver to the Company a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8.
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(c) The Closing shall be subject to the satisfaction or valid waiver (to the extent a valid waiver is capable of being issued) by the party (the Issuer and the Company, on the one hand, or Subscriber, on the other) entitled to the benefit thereof, of the conditions that, on or prior to the Closing Date:
(i) the Subscribed Shares shall have been approved for listing on the New York Stock Exchange (the “NYSE”) or the Nasdaq Stock Market LLC (“Nasdaq”), subject to official notice of issuance, and no suspension of the qualification of the Subscribed Shares for offering or sale or trading on NYSE or Nasdaq, or, to the Issuer’s knowledge, initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) all conditions precedent to the closing of the Transaction set forth in the Share Sale Agreement, including, without limitation, the required approval of the Company’s shareholders, shall have been satisfied (as determined by the parties to the Share Sale Agreement, and other than those conditions which, by their nature, are to be satisfied at the closing of the Transaction, but subject to satisfaction or waiver thereof by the party entitled to the benefit thereof under the Share Sale Agreement, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Aggregate Subscribed Shares pursuant to the Subscription Agreements) or waived in writing by the party entitled to the benefit thereof under the Share Sale Agreement; and
(iii) no governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining, prohibiting or enjoining consummation of the transactions contemplated hereby (except in the case of a governmental authority located outside the United States where such judgment, order, law, rule or regulation would not be reasonably expected to have a Company Material Adverse Effect (as defined below)).
(d) The obligation of each of the Issuer and the Company to consummate the Closing shall be subject to the satisfaction or valid waiver by the Issuer and the Company of the additional conditions that, on or prior to the Closing Date:
(i) all representations and warranties of Subscriber contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date (other than (x) representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects or (y) representations and warranties that speak as of a specified earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or Subscriber Material Adverse Effect, which representations shall be true and correct in all respects) as of such specified date), in each case without giving effect to the consummation of the Transaction, and consummation of the Closing shall constitute a reaffirmation by Subscriber of each of the representations and warranties of Subscriber contained in this Subscription Agreement as of the Closing;
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(ii) Subscriber shall have wired the Subscription Amount in accordance with Section 2(b) of this Subscription Agreement and otherwise performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iii) Subscriber shall have provided to the Issuer and the Company the information requested in Annex A hereto.
(e) The obligation of Subscriber to consummate the Closing shall be subject to the satisfaction or valid waiver by Subscriber of the additional conditions that, on or prior to the Closing Date:
(i) all representations and warranties of the Issuer and the Company contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date (other than (A) representations and warranties that are qualified as to materiality or Company Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects or (B) representations and warranties that speak as of a specified earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or Company Material Adverse Effect, which representations shall be true and correct in all respects) as of such specified date), in each case without giving effect to the consummation of the Transaction, and consummation of the Closing shall constitute a reaffirmation by the Issuer and the Company of each of the representations and warranties of the Issuer and the Company, respectively, contained in this Subscription Agreement as of the Closing; provided that in the event this condition would otherwise fail to be satisfied as a result of a breach of one or more of the representations and warranties of the Issuer or the Company contained in this Subscription Agreement and the facts underlying such breach would also cause a condition to Glencore’s obligations under the Share Sale Agreement to fail to be satisfied, this condition shall nevertheless be deemed satisfied in the event Glencore waives such condition with respect to such breach under the Share Sale Agreement;
(ii) the Issuer and the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance, satisfaction or compliance would not or would not reasonably be expected to materially and adversely affect the economic benefits to Subscriber under this Subscription Agreement; and
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(iii) there shall have been no amendment or modification of the Share Sale Agreement that materially and adversely affects the economic benefits to Subscriber under this Subscription Agreement without having received Subscriber’s prior written consent.
3. Issuer Representations and Warranties. For the purposes of this Section 3, the term “Issuer” shall refer to (i) the Issuer as of the date hereof, and (ii) for the for purposes of the representations contained in subsections (f), (h) and (k) of this Section 3 and to the extent such representations and warranties are made as of the Closing Date, the combined company after giving effect to the Transaction as of the Closing Date. The Issuer represents and warrants to Subscriber and the Placement Agents (as defined below) that as of the date hereof:
(a) The Issuer (i) has been duly incorporated and is validly existing as a private limited company in good standing under the laws of Jersey, Channel Islands, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect.
(b) As of the Closing Date, the Subscribed Shares will be duly authorized and, when issued and delivered to Subscriber against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued.
(c) The Subscribed Shares are not, and following the Closing, will not be, subject to any Transfer Restriction. The term “Transfer Restriction” means any condition to or restriction on the ability of Subscriber to pledge, sell, assign or otherwise transfer the Subscribed Shares under any organizational document, policy or agreement of, by or with the Issuer, but excluding (i) the restrictions on transfer described in Section 5(e) of this Subscription Agreement with respect to the status of the Ordinary Shares as “restricted securities” pending their registration for resale under the Securities Act of 1933, as amended (the “Securities Act”), in accordance with the terms of this Subscription Agreement, and (ii) compliance with routine transfer registration provisions under the Issuer’s organizational documents and agreements and policies of the Issuer’s transfer agent.
(d) This Subscription Agreement has been duly authorized, executed and delivered by the Issuer, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(e) The execution and delivery of this Subscription Agreement, the issuance and sale of the Subscribed Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject; (ii) the organizational documents of the Issuer; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
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(f) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, the Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance of this Subscription Agreement (including, without limitation, the issuance of the Subscribed Shares), other than (i) filings required by applicable state securities laws, (ii) filings with the United States Securities and Exchange Commission (the “Commission”), including the filing of the Registration Statement pursuant to Section 6 below, (iii) filings required by the NYSE or, in the event the Company becomes listed on Nasdaq, Nasdaq, including with respect to obtaining approval of the Company’s shareholders, (iv) filings required to consummate the Transaction as provided under the Share Sale Agreement, (v) any filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or any law or regulation of any other jurisdiction related to competition or merger control, if applicable, (vi) those that will be obtained, made or given, as applicable, on or prior to the Closing, and (vii) consents, waivers, authorizations, orders, notices or filings, the failure of which to obtain would not reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on the Issuer’s legal authority to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Shares.
(g) As of the date hereof, the entire authorized share capital of the Company consists of 221,000,000 Ordinary Shares, consisting of 200,000,000 Class A ordinary shares, 20,000,000 Class B ordinary shares and 1,000,000 preference shares. As of the Closing Date (and immediately after the consummation of the Transaction), the entire authorized share capital of the Issuer will consist of 220,000,000 Ordinary Shares and 1,000,000 preference shares of a par value of $0.0001 per share.
(h) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Subscribed Shares by the Issuer to Subscriber and the Subscribed Shares are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities law.
(i) Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in violation of the Securities Act in connection with any offer or sale of the Subscribed Shares.
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(j) Except for the Placement Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Issuer solely in connection with the sale of the Subscribed Shares to Subscriber.
(k) The Issuer has provided Subscriber an opportunity to ask questions regarding the Issuer and made available to Subscriber all the information reasonably available to the Issuer that Subscriber has reasonably requested to make an investment decision with respect to the Subscribed Shares.
(l) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, the Issuer is in compliance with all laws applicable to the conduct of its business. The Issuer has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(m) The Issuer has been formed for the purpose of consummating the Merger and, prior to the consummation of the Merger, maintains limited operations and does not employ any employees and does not maintain any employee benefit or stock option or similar equity incentive plans.
(n) As of the Closing Date, the issued and outstanding Ordinary Shares of the Issuer will be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and listed for trading on the NYSE or Nasdaq. There is no suit, action, claim, proceeding or investigation pending or, to the knowledge of the Issuer, threatened against the Issuer by the NYSE, Nasdaq or the Commission with respect to any intention by such entity to deregister the Ordinary Shares or to prohibit or terminate the listing of the Ordinary Shares on the NYSE or Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by the NYSE or Nasdaq, in connection with the Transaction.
4. Company Representations and Warranties. For purposes of this Section 4, the term “Company” shall refer to (i) the Company as of the date hereof, and (ii) for purposes of the representations contained in subsections (d) and (h) of this Section 4 and to the extent such representations and warranties are made as of the Closing Date, the combined company after giving effect to the Transaction as of the Closing Date. The Company represents and warrants to Subscriber and the Placement Agents (as defined below) that as of the date hereof:
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(a) The Company (i) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Cayman Islands, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. For purposes of this Subscription Agreement, a “Company Material Adverse Effect” means any event, circumstance, change, development, effect or occurrence (collectively “Effect”) that, individually or in the aggregate with all other Effects, (a) is or would reasonably be expected to be materially adverse to the business, financial condition or results of operations of the Issuer or the Company and its subsidiaries, taken as a whole, provided, however, that a reduction or expected reduction in the operating cash flows of the Company of less than $250,000,000 in any fiscal year shall not be considered a Company Material Adverse Effect; or (b) would prevent, materially delay or materially impede the performance by the Issuer or the Company or its subsidiaries of their respective obligations under this Subscription Agreement, the Share Sale Agreement or the consummation of the Transaction before the Outside Date (as defined below); provided, however, that, in the case of clause (a), none of the following (or the effect of any of the following) shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Company Material Adverse Effect: (i) any change or proposed change in applicable law (including subordinate legislation) or GAAP or IFRS, as applicable (including, in each case, the interpretation thereof) or changes in enforcement policies or official interpretations thereof or decisions of general applicability by any governmental entity, in each case, after the date of this Subscription Agreement; (ii) events, changes or conditions generally affecting the industries or geographic areas in which the Company and its subsidiaries operate, including the copper mining industry generally; (iii) any changes in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (iv) declared or undeclared acts of war, armed hostilities, sabotage, civil unrest, protests, demonstrations, cyberattacks or terrorism, or any escalation or worsening of any such acts of war, armed hostilities sabotage, civil unrest, protests, demonstrations, cyberattacks or terrorism, or changes in global, national, regional, state or local political or social conditions; (v) any hurricane, tornado, flood, earthquake, mudslide, wildfire, natural disaster, epidemic, disease outbreak, pandemic (including, for the avoidance of doubt, the novel coronavirus, SARS-CoV-2 or COVID-19 and all related measures, strains and sequences) or other acts of God, (vi) any actions taken or not taken by the Issuer or the Company as required by this Subscription Agreement, the Share Sale Agreement or any other agreement executed and delivered in connection with the Transaction and specifically contemplated by the Share Sale Agreement, (vii) a government directive, sanction, order ban, rule or guideline in relation to any event (including a pandemic), (viii) a strike or industrial dispute which has as its result a national or statewide application, (ix) any fact, matter or circumstance disclosed in writing by or on behalf of Glencore to the Issuer or the Company prior to the date of this Subscription Agreement, (x) the unavailability (at commercially reasonable prices) of critical inputs required for the operation of CMPL's business supplied by third parties, (xi) any change or effect that is cured (including by payment of money) or ceases to exist on or before the Closing Date, (xii) any failure of CMPL and its subsidiaries, taken as a whole to meet any projections, forecasts, guidance, estimates or financial or operating predictions of revenue, earnings, cash flow or cash position (provided, that any Effect underlying such failure (except to the extent otherwise excluded by other clauses in this definition) may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur) or (xiii) any Effect attributable to the announcement or execution, pendency, negotiation, consummation or performance of this Subscription Agreement or the Transaction (including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, employees, licensors, providers, distributors, partners, investors, or other third parties related thereto), except in the cases of clauses (i) through (v), to the extent that the Company is materially and disproportionately affected thereby as compared with other participants in the industry in which the Company operates.
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(b) This Subscription Agreement has been duly authorized, executed and delivered by the Company, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The execution and delivery of this Subscription Agreement and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; (ii) the organizational documents of the Company; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
(d) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance of this Subscription Agreement, other than (i) filings required by applicable state securities laws, (ii) filings with the United States Securities and Exchange Commission (the “Commission”), including the filing of the Registration Statement pursuant to Section 6 below, (iii) filings required by the NYSE or, in the event the Company becomes listed on Nasdaq, Nasdaq, including with respect to obtaining approval of the Company’s shareholders, (iv) filings required to consummate the Transaction as provided under the Share Sale Agreement, (v) any filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or any law or regulation of any other jurisdiction related to competition or merger control, if applicable, (vi) those that will be obtained, made or given, as applicable, on or prior to the Closing, and (vii) consents, waivers, authorizations, orders, notices or filings, the failure of which to obtain would not reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s legal authority to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Shares.
(e) Other than where the failure to timely file would not reasonably be expected to have a Company Material Adverse Effect, as of their respective dates, all reports required to be filed by the Company with the Commission (the “SEC Reports”) complied in all material respects with the applicable requirements in existence as of such dates of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, as of such dates, in the light of the circumstances under which they were made, not misleading. Except as disclosed in the SEC Reports, the financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.
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(f) Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in violation of the Securities Act in connection with any offer or sale of the Subscribed Shares.
(g) Except for the Placement Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Company solely in connection with the sale of the Subscribed Shares to Subscriber.
(h) The Company has provided Subscriber an opportunity to ask questions regarding the Company and made available to Subscriber all the information reasonably available to the Company that Subscriber has reasonably requested to make an investment decision with respect to the Subscribed Shares.
(i) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, the Company is in compliance with all laws applicable to the conduct of its business. The Company has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(j) As of the date hereof, the Company’s issued and outstanding Class A ordinary shares (the “Company Shares”) are registered pursuant to Section 12(b) of the Exchange Act and listed for trading on the NYSE or Nasdaq. There is no suit, action, claim, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company by the NYSE or Nasdaq or the Commission with respect to any intention by such entity to deregister the Company Shares or to prohibit or terminate the listing of the Company Shares on the NYSE or Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by the NYSE or Nasdaq in connection with the Transaction.
(k) There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any securities of the Company, other than (1) as set forth in the SEC Reports and (2) as contemplated by the Share Sale Agreement.
(l) The Company has not engaged in any “directed selling efforts” (within the meaning of Regulation S) with respect to the Subscribed Shares, and the Company and its affiliates has complied with the offering restrictions requirement of Regulation S. The Company is a “foreign issuer” as defined in Regulation S.
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(m) Each of the Issuer and the Company covenant to the Subscriber that, except as disclosed herein, if an Other Subscription Agreement or any other side letter or similar agreement with any Other Subscriber, contains more favorable terms and/or conditions (as the case may be) than the terms and/or conditions contained in this Subscription Agreement, then the terms and conditions of this Subscription Agreement shall be, without any further action by the Subscriber, the Issuer or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Subscriber shall receive the benefit of such more favorable terms and/or conditions (as the case may be) set forth in such Other Subscription Agreement, side letter or similar agreement and the Issuer or the Company will notify Subscriber within three (3) calendar days following acceptance of the Subscriber’s subscription by the Issuer and the Company of any such amended or modified term or condition; provided that upon written notice to the Issuer and the Company, at any time, the Subscriber may elect not to accept the benefit of any or all of such amended or modified terms or conditions, in which event any such terms or conditions not accepted shall be deemed not to have amended or modified this Subscription Agreement; provided, that Subscriber acknowledges that certain Subscribers purchasing a significant portion of the Aggregate Subscribed Shares have the additional right to receive a number of Class B ordinary shares of the Company from Green Mountain Metals LLC, a Cayman Islands limited liability company and the sponsor of the Company.
5. Subscriber Representations and Warranties. Subscriber represents and warrants to the Issuer and the Company and the Placement Agents that as the date hereof:
(a) Subscriber (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement.
(b) This Subscription Agreement has been duly executed and delivered by Subscriber, and assuming the due authorization, execution and delivery of the same by the Issuer and the Company, this Subscription Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The execution and delivery of this Subscription Agreement, the purchase of the Subscribed Shares and the compliance by Subscriber with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Subscriber that would reasonably be expected to have a material adverse effect on Subscriber’s ability to timely consummate the transactions contemplated hereby, including the purchase of the Subscribed Shares.
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(d) (i) If Subscriber is located in the United States or is a U.S. person, Subscriber (A) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7), (9) or (12) under the Securities Act), in either case satisfying the applicable requirements set forth on Annex A hereto and an “institutional account” as defined in FINRA Rule 4512(c), and is not an entity formed for the specific purpose of acquiring the Subscribed Shares and is an “institutional account” as defined by FINRA Rule 4512(c) and a sophisticated institutional investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, (C) has exercised independent judgment in evaluating its participation in the purchase of the Subscribed Shares, (D) is acquiring the Subscribed Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a qualified institutional buyer or an institutional accredited investor and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (E) is not acquiring the Subscribed Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and has provided the Company with the requested information on Annex A), and (F) understands that the offering meets the exemptions from filing under FINRA Rules 5123(b)(1)(A), (C) and (J); and (ii) if located outside the United States and not a U.S. person, (A) Subscriber is acquiring the Subscribed Shares in an "offshore transaction" meeting the requirements of Rule 903 of Regulation S under the Securities Act, (B) Subscriber understand that the offering meets the exemptions from filing under FINRA Rule 5123(c), (C) Subscriber is aware that the sale to them is being made in reliance on a private placement exemption from, or in a transaction not subject to, registration under the Securities Act, and the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Securities offered pursuant to this Subscription, was located outside the United States and was not a U.S. person at the time (x) the offer was made to it and (y) when the buy order for such Subscribed Shares was originated, and continues to be located outside the United States and not to be a U.S. person and has not purchased such Subscribed Shares for the account or benefit of any person located in the United States or who is a U.S. person, or entered into any arrangement for the transfer of such Subscribed Shares or any economic interest therein to any person located in the United States or any U.S. person, (D) Subscriber is authorized to consummate the purchase of the Subscribed Shares offered pursuant to this Subscription in compliance with all applicable laws and regulations of the jurisdiction where such sales are to be made. In either case, the Subscribed Shares have not been registered under the Securities Act or any other applicable securities laws of any other jurisdiction, are being offered in transactions not requiring registration under the Securities Act, and unless so registered, may not be reoffered, resold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities laws, pursuant to any exemption therefrom or in a transaction not subject thereto. Subscriber understands that no disclosure or offering document has been prepared by the Placement Agents in connection with the offer and sale of the Subscribed Shares. Subscriber understands that the Subscribed Shares may not be offered, resold, transferred, pledged (other than in connection with ordinary course prime brokerage relationships) or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each of cases (ii) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any book-entry positions or certificates representing the Subscribed Shares shall contain the legend set forth in this Section 5(d). Subscriber understands and agrees that the Subscribed Shares will be subject to transfer restrictions under applicable securities laws and, as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge (other than in connection with ordinary course prime brokerage relationships) or otherwise dispose of the Subscribed Shares and may be required to bear the financial risk of an investment in the Subscribed Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, pledge, transfer or disposition of any of the Subscribed Shares.
Each book entry for the Subscribed Shares shall contain a notation, and each certificate (if any) evidencing the Ordinary Shares shall be stamped or otherwise imprinted with a legend, in substantially the following form (or to substantially the following effect):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE (NOTWITHSTANDING THE FOREGOING, THE SECURITIES REPRESENTED HEREBY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES). BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE SUBSCRIBER AGREES FOR THE BENEFIT OF METALS ACQUISITION LIMITED (THE “ISSUER”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT AND IS EFFECTIVE AT THE TIME OF SUCH TRANSFER, OR
(C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR
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(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY PERMITTED TRANSFER IN ACCORDANCE WITH THE ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(e) Subscriber understands and agrees that Subscriber is purchasing the Subscribed Shares directly from the Issuer. Subscriber further acknowledges that there have not been, and Subscriber hereby expressly and irrevocably acknowledges and agrees that it is not relying on, any representations, warranties, covenants or, agreements or statements made to Subscriber by or on behalf of the Issuer, the Company, Glencore or the Issuer’s, the Company’s or Glencore’s respective affiliates or any of the respective subsidiaries, control persons, officers, directors, employees, partners, agents or representatives, or any other party to the Transaction or any other person or entity (including the Placement Agents), expressly or by implication, (including by omission), other than those representations, warranties, covenants, agreements and statements of the Issuer and the Company expressly set forth in this Subscription Agreement, and Subscriber is not relying on any other purported representations, warranties, covenants, agreements or statements (including by omission). Subscriber acknowledges that certain information provided by the Issuer and the Company was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber acknowledges that such information and projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections. Subscriber agrees that neither the Placement Agents nor any of its affiliates or any of their or their respective affiliates’ control persons, officers, directors or employees, shall be liable (including in contract, tort, under federal or state securities laws or otherwise) to Subscriber pursuant to this Subscription Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Subscribed Shares. On behalf of itself and its affiliates and any of their respective control persons, officers, directors or employees, Subscriber releases the Placement Agents and any of their respective affiliates in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to this Subscription Agreement or the transactions contemplated hereby. Subscriber agrees not to commence any litigation or bring any claim against the Placement Agents nor any of their affiliates in any court or any other forum which relates to, may arise out of, or is in connection with, the placement of the Ordinary Shares. Subscriber undertook this investment freely and after obtaining independent legal advice.
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(f) In making its decision to purchase the Subscribed Shares, Subscriber has relied solely upon independent investigation made by Subscriber and upon the representations, warranties and covenants of the Issuer and the Company expressly set forth herein (and no other representations and warranties). Subscriber acknowledges and agrees that Subscriber has received and had adequate time to review such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Shares, including with respect to the Issuer, the Company and the Transaction (including CMPL and its subsidiaries (collectively, the “Acquired Companies”)). Subscriber acknowledges it has conducted its own investigation of the Company and the Subscribed Shares and has not relied on any statements or other information provided by the Placement Agents concerning the Issuer, the Company or the Subscribed Shares or the offer and sale of the Subscribed Shares, and has been offered the opportunity to ask questions of the Issuer and the Company and received answers thereto, including on the financial information, as Subscriber deemed necessary in connection with its decision to purchase the Subscribed Shares. Subscriber has made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant to its investment in the Subscribed Shares. Without limiting the generality of the foregoing, Subscriber acknowledges that Subscriber has reviewed the SEC Reports. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Shares. Subscriber acknowledges and agrees that none of Citigroup Global Markets Inc., UBS Securities LLC, Canaccord Genuity LLC and Ashanti Capital Pty Ltd., each acting as a placement agent to the Company (collectively, the “Placement Agents”), nor any affiliate of the Placement Agents has provided Subscriber with any information or advice with respect to the Subscribed Shares nor is such information or advice necessary or desired. Neither the Placement Agents nor any of their affiliates have made or make any representation or warranty, whether express or implied, of any kind or character as to the Issuer, the Company or the Acquired Companies or the quality or value of the Subscribed Shares and the Placement Agents and any of their respective affiliates may have acquired non-public information with respect to the Issuer, the Company or the Acquired Companies which Subscriber agrees need not be provided to it. In connection with the issuance of the Subscribed Shares to Subscriber, neither the Placement Agents nor any of their affiliates have acted as a financial advisor or fiduciary to Subscriber. Subscriber agrees that neither the Placement Agents nor any of their affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing shall be liable to any Subscriber for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with Subscriber’s purchase of the Subscribed Shares. Subscriber understands that the Placement Agents and their directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, the Company or the Subscribed Shares or the accuracy, completeness or adequacy of any information supplied to the Placement Agents by the Issuer and the Company. On behalf of Subscriber and Subscriber’s affiliates, Subscriber releases the Placement Agents and their respective affiliates in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to the Subscription. Subscriber agrees not to commence any litigation or bring any claim against any of the Placement Agents nor any of their affiliates in any court or any other forum which relates to, may arise out of, or is in connection with, the Subscription. This undertaking is given freely and after obtaining independent legal advice.
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(g) Subscriber became aware of this offering of the Subscribed Shares solely by means of direct contact between Subscriber, the Issuer and the Company or by means of contact from the Placement Agents and/or their respective advisors (including, without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, representatives, affiliates, directors, officers, managers, members, and/or employees, and/or the representatives of such persons (such parties referred to collectively as “Representatives”). The Subscribed Shares were offered to Subscriber solely by direct contact between Subscriber, the Issuer and the Company and/or its Representatives. Subscriber did not become aware of this offering of the Subscribed Shares, nor were the Subscribed Shares offered to Subscriber, by any other means, and none of the Issuer, the Company, the Placement Agents or their respective Representatives acted as investment advisor, broker or dealer to Subscriber. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person or entity (including, without limitation, the Issuer, the Company, the Placement Agents and/or their respective Representatives), other than the representations and warranties expressly set forth in this Subscription Agreement, in making its investment or decision to invest in the Issuer and the Company. Subscriber acknowledges that the Issuer and the Company represents and warrants that the Subscribed Shares (i) were not offered by any form of general solicitation or general advertising, including methods described in Section 502(c) of Regulation D under the Securities Act, and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
(h) Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Shares. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Shares, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision, and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. Subscriber acknowledges that it (i) is a sophisticated investor, experienced in investing in business and financial transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and (ii) has exercised independent judgment in evaluating its purchase of the Subscribed Shares. Subscriber acknowledges that its purchase of Subscribed Shares (i) is fully consistent with Subscriber’s financial needs, objectives and condition, (ii) complies and is fully consistent with all of Subscriber’s applicable investment policies, guidelines and other restrictions, (iii) has been duly authorized and approved by all necessary action (corporate or otherwise), and (iv) does not and will not violate or constitute a default under Subscriber’s charter, by- laws or other constituent documents or under any law, rule, regulation, agreement or other obligation by which we are bound and are a fit, proper and suitable investment, notwithstanding the substantial risks inherent in investing in or holding the Subscribed Shares. Subscriber understands that the purchase and sale of the Subscribed Shares hereunder meets (i) the institutional accounts exemptions from filing under FINRA Rule 5123(b)(1)(A), (ii) the institutional customer exemption from filing under FINRA Rule 2111(b), (iii) the qualified institutional buyers exemption from filing under FINRA Rule 5123(b)(1)(C) and (iv) the accredited investors exemption from filing under FINRA Rule 5123(b)(1)(J).
(i) Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Subscribed Shares and determined that the Subscribed Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer and the Company. Subscriber acknowledges specifically that a possibility of total loss exists.
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(j) Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Shares or made any findings or determination as to the fairness of this investment.
(k) To the best of its knowledge, Subscriber is in material compliance with all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the United States and administered by the U.S. Department of Treasury, U.S. Department of Commerce, or the U.S. Department of State, and (b) the United Nations Security Council, the European Union as administered by any European Union member state, or the United Kingdom’s HM Treasury (collectively, “Sanctions”). Subscriber is not (x) to the best of its knowledge, a person or entity that is named on any sanctions-related list of designated persons, including the List of Specially Designated Nationals and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List or the Sectoral Sanctions Identifications List, each of which is administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), the Denied Persons List, Entity List, or Unverified List administered by the U.S. Department of Commerce, Bureau of Industry and Security, and sanctions-related lists set forth in any Executive Order issued by the President of the United States and administered by OFAC, or any other list of prohibited or restricted parties promulgated by OFAC, the Department of Commerce, the Department of State, His Majesty’s Treasury, the European Union or any member state thereof, or the United Nations Security Council, (y) organized, located, or resident in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of any country or territory subject to comprehensive sanctions (currently, Cuba, Iran, North Korea, Syria, Russia and the Crimea, Donetsk and Luhansk regions of Ukraine) or (z) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, (x) through (z), a “Restricted Person”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records and information as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber is in material compliance with the BSA/PATRIOT Act, and, to the extent required, maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with Sanctions, including for the screening of its investors to confirm that they are not Restricted Persons. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Subscribed Shares were legally derived.
(l) Subscriber does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof Subscriber has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or short sale positions with respect to the securities of the Issuer or the Company. Notwithstanding the foregoing, in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of Subscriber’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of Subscriber’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Subscribed Shares covered by this Subscription Agreement.
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(m) If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or an employee benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA), a church plan (as defined in Section 3(33) of ERISA), a non-U.S. plan (as described in Section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”, collectively, the “Plans”) subject to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code or other laws or regulations that are similar to such provisions, then Subscriber represents and warrants that neither the Issuer, the Company, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Shares.
(n) At the Closing, Subscriber will have sufficient funds to pay the Subscription Amount pursuant to Section 2(b) of this Subscription Agreement.
(o) Subscriber agrees that, notwithstanding Section 10(h) of this Subscription Agreement, the Placement Agents may rely upon the representations and warranties made by Subscriber to the Issuer and the Company in this Subscription Agreement.
(p) No broker, finder or other financial consultant has acted on behalf of Subscriber in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on the Issuer or the Company.
(q) Subscriber hereby acknowledges and agrees that (i) the Placement Agents are each acting solely as a Placement Agent in connection with the Subscription contemplated by this Subscription Agreement and are not acting as an underwriter or in any other capacity and are not and shall not be construed as a fiduciary for Subscriber, the Issuer, the Company or any other person or entity in connection with the transactions contemplated herein, (ii) neither the Placement Agents nor any of their respective Representatives have made, or will make, any representation or warranty, whether express or implied, of any kind or character and have not provided any advice or recommendation in connection with the transactions contemplated herein, (iii) the Placement Agents and their respective Representatives will have no responsibility with respect to (x) any representations, warranties or agreements made by any person or entity under or in connection with the Subscription as contemplated by this Subscription Agreement or the transactions contemplated herein or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) of any thereof, or (y) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Issuer, the Company, the Acquired Companies or the transactions contemplated herein, (iv) the Placement Agents and their respective Representatives shall have no liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by Subscriber, the Issuer, the Company or any other person or entity), whether in contract, tort or otherwise, to Subscriber, or to any person claiming through Subscriber, in respect of the transactions contemplated herein, (v) neither the Placement Agents nor their respective Representatives have made an independent investigation with respect to the Issuer, the Company or the Subscribed Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer or the Company, and (vi) the Placement Agents have not prepared a disclosure or offering document in connection with the offer and sale of the Subscribed Shares.
(r) Except for the representations and warranties contained in this Section 5, Subscriber makes no express or implied representation or warranty, and Subscriber hereby disclaims any such representation or warranty with respect to the execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated herein.
(s) If Subscriber is located in or receiving this offer in Australia, Subscriber warrants that (i) it is a person or body referred to in Section 708(11) or 708(12) of the Corporations Act 2001 (Cth); or (ii) that a qualified accountant has issued a certificate, no more than six months prior to the date of this Subscription Agreement, confirming that Subscriber (x) has net assets of at least AU$2.5 million; or (y) has a gross annual income for each of the last two financial years of at least AU$250,000 per annum; or (iii) it is otherwise an “exempt offeree” for the purposes of Section 708 of the Corporations Act 2001 (Cth) and does not require disclosure from the Company under Part 6D.2 of the Corporations Act in order for the Company to issue the Subscribed Shares to Subscriber under this Subscription Agreement; and (iv) it agrees to comply with to Section 707(3) of the Corporations Act 2001 (Cth) and acknowledges Subscriber will be prohibited from on- selling the Subscribed Shares to investors in Australia for a period of 12 months after their issuance unless such purchaser falls within an exception set out in Section 708 of the Corporations Act 2001 (Cth).
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| 6. | Registration of Subscribed Shares. |
(a) The Issuer agrees that the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Ordinary Shares (the “Registration Statement”) no later than thirty calendar days after the Closing Date, and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty calendar days after the filing thereof (or, in the event the Commission reviews and has written comments to the Registration Statement, the ninetieth calendar day following the filing thereof) and (ii) the tenth Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review ((i) and (ii) collectively, the “Effectiveness Deadline”); provided that if such day falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business. The Issuer will use its commercially reasonable efforts to provide a draft of the Registration Statement to the undersigned for review (but not comment) at least two (2) Business Days in advance of filing the Registration Statement; provided that, for the avoidance of doubt, in no event shall the Issuer be required to delay or postpone the filing of such Registration Statement as a result of or in connection with Subscriber’s review. Unless otherwise agreed to in writing by Subscriber, Subscriber shall not be identified as a statutory underwriter in the Registration Statement unless requested by the Commission or another regulatory agency; provided, that if the Commission or another regulatory agency requests that a Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have the opportunity to withdraw from the Registration Statement upon its prompt written request to the Issuer. Notwithstanding the foregoing, if the Commission prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Ordinary Shares by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Ordinary Shares which is equal to the maximum number of Ordinary Shares as is permitted by the Commission. In such event, the number of Ordinary Shares to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders. The Issuer agrees that, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, the Issuer will use its commercially reasonable efforts to cause such Registration Statement to remain effective with respect to Subscriber until the earlier of (i) two years from the issuance of the Ordinary Shares, (ii) the date on which all of the Ordinary Shares shall have been sold, and (iii) on the first date on which the undersigned can sell all of its Ordinary Shares (or shares received in exchange therefor) under Rule 144 without limitation as to the manner of sale or the amount of such securities that may be sold. If requested by Subscriber, the Issuer shall use its commercially reasonable efforts to (i) cause the removal of the restrictive legends from any Ordinary Shares being sold under the Registration Statement or pursuant to Rule 144 at the time of sale of such Registrable Securities (as defined below) and, at the request of a Holder (as defined below), cause the removal of all restrictive legends from any Registrable Securities held by such Holder that may be sold by such Holder without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions, and (ii) cause its legal counsel to deliver an opinion, if necessary, to the transfer agent in connection with the instruction under subclause (i) to the effect that the removal of such restrictive legends in such circumstances may be effected under the Securities Act, in each case upon the receipt of customary representations and other documentation, if any, from the Holder as reasonably requested by the Issuer, its counsel or the transfer agent, establishing that restrictive legends are no longer required. The Issuer shall use its commercially reasonable efforts to have the legend removal referenced above apply to all shares held by Subscriber in a single transaction. The Issuer will use commercially reasonable efforts to file all reports, and provide all customary and reasonable cooperation, necessary to enable Holder to resell Registrable Securities pursuant to the Registration Statement or Rule 144, as applicable, qualify the Registrable Securities for listing on the applicable stock exchange on which the Ordinary Shares are then listed and update or amend the Registration Statement as necessary to include Registrable Securities. “Registrable Securities” shall mean, as of any date of determination, the Ordinary Shares and any other equity security issued or issuable with respect to the Ordinary Shares by way of share subdivision, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, provided, however, that such securities shall cease to be Registrable Securities at the earliest of (A) three years, (B) the date all Ordinary Shares held by a Holder may be sold by such Holder without volume or manner of sale limitations pursuant to Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (C) the date on which such securities have actually been sold by a Holder, and (D) when such securities shall have ceased to be issued and outstanding. “Holder” shall mean Subscriber or any affiliate of Subscriber to which the rights under this Section 6 shall have been assigned. The undersigned agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Exchange Act, of Ordinary Shares to the Issuer (or its successor) promptly upon request to assist the Issuer in making the determination described above. The Issuer’s obligations to include the Ordinary Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Ordinary Shares as shall be reasonably requested by the Issuer to effect the registration of the Ordinary Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. In the case of the registration effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Ordinary Shares. Notwithstanding anything to the contrary contained herein, the Issuer may delay or postpone filing of such Registration Statement, and from time to time require Subscriber not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement if it determines that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, or if such filing or use could materially affect a bona fide business or financing transactions of the Issuer or would require premature disclosure of information that could materially adversely affect the Issuer (each such circumstance, a “Suspension Event”); provided, that, (w) the Issuer shall not so delay filing or so suspend the use of the Registration Statement for a period of more than sixty (60) consecutive days or more than two times in any 360-day period and (x) the Issuer shall use commercially reasonable efforts to make such registration statement available for the sale by the undersigned of such securities as soon as practicable thereafter.
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(b) Upon receipt of any written notice from the Issuer (which notice shall not contain any material non-public information regarding the Issuer) of the occurrence of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the undersigned agrees that (i) it will immediately discontinue offers and sales of the Ordinary Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the undersigned receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by the Issuer, the undersigned will deliver to the Issuer, or in the undersigned’s sole discretion destroy, all copies of the prospectus covering the Subscribed Shares in the undersigned’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Ordinary Shares shall not apply (w) to the extent the undersigned is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up.
(c) The Issuer shall, notwithstanding any termination of this Subscription Agreement, indemnify, defend and hold harmless the Subscriber (if the Subscriber is named as a selling stockholder under the Registration Statement), its officers, directors, trustees, agents, partners, members, managers, stockholders, affiliates, employees and investment advisers of each of them, and each person who controls the Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) officers, directors, trustees, agents, partners, members, managers, stockholders, affiliates, employees and investment advisers of each such controlling person to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in any Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Issuer of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Section 6 except to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Subscriber furnished in writing to the Issuer by the Subscriber expressly for use therein; provided, however, that the indemnification contained in this Section 6 shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Issuer (which consent shall not be unreasonably withheld, conditioned or delayed), nor shall the Issuer be liable for any Losses to the extent they arise out of or are based upon a violation which occurs (A) in reliance upon and in conformity with written information furnished by a Subscriber expressly for use in such Registration Statement, (B) in connection with any failure of such person to deliver or cause to be delivered a prospectus made available by the Issuer in a timely manner to the extent required, (C) as a result of offers or sales effected by or on behalf of any person by means of a freewriting prospectus (as defined in Rule 405 of the Securities Act) that was not authorized in writing by the Issuer, or (D) in connection with any offers, sales or transfers effected by or on behalf of a Subscriber in violation of Section 6(e) hereof. The Issuer shall notify the Subscriber promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 6 of which the Issuer is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party and shall survive the transfer of the Ordinary Shares by the Subscriber.
| 7. | Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Share Sale Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of the Issuer and the Company and Subscriber to terminate this Subscription Agreement, (c) August 2, 2023 (the “Outside Date”) or (d) the failure to consummate the Silver Purchase Agreement in accordance with its terms (for any reason whatsoever); provided, that nothing herein will relieve any party from liability for any willful breach hereof (including, for the avoidance of doubt, a Subscriber’s willful breach of Section 2(c) of this Subscription Agreement with respect to its representations, warranties and covenants as of the date of the Closing) prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer and the Company shall notify Subscriber of the termination of the Share Sale Agreement promptly after the termination thereof. For the avoidance of doubt, if any termination hereof occurs after the delivery by Subscriber of the Subscription Amount for the Subscribed Shares, the Issuer and the Company shall promptly (but not later than one (1) Business Day thereafter) return, or cause the Escrow Agent to return, the Subscription Amount to Subscriber by wire transfer of immediately available funds to the account specified by Subscriber without any deduction for or on account of any tax, withholding, charges, or set-off. |
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| 8. | No Short Sales. Subscriber hereby agrees that, from the date of this Subscription Agreement until the Closing Date (or earlier termination of this Subscription Agreement), neither Subscriber nor any Person acting on behalf of Subscriber or pursuant to any understanding with Subscriber will engage in any Short Sales (as defined below) with respect to securities of the Issuer and the Company, as applicable. For purposes of this Section 8, “Short Sales” shall mean all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all short positions effected through any direct or indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), or sales or other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing in this Section 8 shall prohibit other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s Subscription (including Subscriber’s controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers or desks managing other portions of such Investor’s assets, the limitations set forth in the first sentence of this Section 8 shall only apply with respect to the portion of assets managed by the portfolio managers or desks that made the investment decision to purchase the Subscribed Shares covered by this Subscription Agreement. |
| 9. | Trust Account Waiver. Subscriber hereby acknowledges that the Company has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the public shareholders of the Company and certain other parties (including the underwriters of the IPO). For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber hereby (i) agrees that it nor any of its related parties does not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets held in the Trust Account or distributions therefrom, and shall not make any claim against the Trust Account (including any distributions therefrom), in each case, regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”) and (ii) irrevocably waives any Released Claims that it or any of its related parties may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of any agreement with the Company or its related parties); provided, however, that nothing herein shall serve to limit or prohibit (i) the Subscriber’s right to pursue a claim against the Company or for legal relief against assets held outside the Trust Account (including from and after the consummation of a transaction other than as contemplated by this document) or, for specific performance, injunctive or other equitable relief or (ii) any claims that the Subscriber may have in the future against the Company’s assets or funds that are not held in the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds). Subscriber acknowledges and agrees that such irrevocable waiver is material to this document and specifically relied upon by the Company to induce the Company to enter into this document, and such party further intends and understands such waiver to be valid, binding and enforceable against it and its related parties under applicable law. Subscriber agrees not to seek recourse or make or bring any action, suit, claim or other proceeding against the Trust Account as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Shares regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability. Subscriber acknowledges and agrees that it shall not have any redemption rights with respect to the Subscribed Shares pursuant to the Company’s organizational documents in connection with the Transaction or any other business combination, any subsequent liquidation of the Trust Account, the Company or otherwise. In the event Subscriber or any of its related parties have any claim against the Company in connection with, as a result of, relating to or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Shares, Subscriber and its related parties (or claimant on any of their behalves or in lieu of any of them) shall pursue such claim solely against the Company and its assets outside the Trust Account and not against the Trust Account or any monies or other assets in the Trust Account. |
| 10. | Miscellaneous. |
(a) All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, on the date of transmission to such recipient; (iii) one (1) Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four (4) Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 10(a).
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(b) Subscriber acknowledges that (i) the Issuer and the Company will rely on the acknowledgments, understandings, agreements, representations and warranties made by Subscriber contained in this Subscription Agreement and (ii) the Placement Agents will rely on the representations and warranties made by Subscriber and the Company, as the case may be, contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Issuer and the Company and the Placement Agents if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects. The Issuer and the Company acknowledges that Subscriber and others (including Placement Agents) will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement.
(c) Each of the Issuer, the Company, the Placement Agents and Subscriber is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party as requested or required by law, rule or regulation in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby; provided that, with respect to production by the Issuer and the Company, such party will provide Subscriber with at least three (3) Business Days’ prior written notice of such production to the extent legally permissible and subject to Section 10(r).
(d) [Reserved]
(e) Neither this Subscription Agreement nor any rights that may accrue to Subscriber hereunder (other than the Subscribed Shares acquired hereunder, if any) may be transferred or assigned. Neither this Subscription Agreement nor any rights that may accrue to the Issuer and the Company hereunder may be transferred or assigned (provided, that, for the avoidance of doubt, each of the Issuer and the Company may transfer the Subscription Agreement and its rights hereunder solely in connection with the consummation of the Transaction and exclusively to another entity under the control of, or under common control with, the Issuer and the Company). Notwithstanding the foregoing, Subscriber may assign its rights and obligations under this Subscription Agreement to one or more of its affiliates (including other investment funds or accounts managed or advised by the investment manager who acts on behalf of Subscriber) or, with the Issuer and the Company’s prior written consent, to another person, provided that no such assignment shall relieve Subscriber of its obligations hereunder if any such assignee fails to perform such obligations, unless each of the Issuer and the Company has given its prior written consent to such relief, and such assignee agrees in writing to be bound by the terms hereof.
(f) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
(g) The Issuer or the Company may request from Subscriber such additional information as the Issuer or the Company may reasonably determine necessary to evaluate the eligibility of Subscriber to acquire the Subscribed Shares, to register the resale of the Subscribed Shares or otherwise consummate or evidence the transaction contemplated by this Subscription Agreement, and Subscriber shall provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures provided that the Issuer and the Company agree to keep any such information provided by Subscriber confidential other than as necessary to include in any registration statement the Issuer and the Company is required to file hereunder or in connection herewith. Subscriber acknowledges and agrees that if it does not provide the Issuer or the Company with such requested information, the Issuer and the Company may not be able to register the Subscribed Shares for resale pursuant to Section 6 hereof. Subscriber hereby agrees that the Subscription Agreement, as well as the nature of Subscriber’s obligations hereunder, may be disclosed in any public announcement or disclosure required by the Commission and in any registration statement, proxy statement, consent solicitation statement or any other Commission filing to be filed by the Issuer and the Company in connection with the issuance of the Subscribed Shares contemplated by this Subscription Agreement and/or the Transaction, in each case without Subscriber’s prior written consent.
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(h) This Subscription Agreement may not be amended, modified, waived or terminated (other than pursuant to the terms of Section 7 above) except by an instrument in writing, signed by each of the parties hereto; provided, that Section 2(a) of this Subscription Agreement may not be amended, modified, waived or terminated without the written consent of Subscriber; provided further, that Section 5, this Section 10(h), and Section 10(j) of this Subscription Agreement may not be amended, terminated or waived in a manner that is material and adverse to the Placement Agents without the written consent of the Placement Agents. Upon the effectuation of such waiver, modification, amendment or termination in conformance with this Section 10(h), such amendment, modification, waiver or termination shall be binding on Subscriber and effective as to all of this Subscription Agreement.
(i) This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties hereto, with respect to the subject matter hereof, except that any confidentiality agreement with respect to Subscriber or its affiliates shall remain in full force and effect following the amendment, modification, waiver or termination of this Subscription Agreement.
(j) Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns. The parties hereto acknowledge and agree that each of the Placement Agents is an express third-party beneficiary of its express rights in Section 3, Section 4, Section 5, Section 10(h) and this Section 10(j) of this Subscription Agreement. In addition, (i) the Issuer and the Company acknowledges and agrees that each of the Placement Agents is a third-party beneficiary of the acknowledgments, understandings, agreements, covenants, representations and warranties made by the Issuer and the Company contained in this Subscription Agreement, and (ii) Subscriber acknowledges and agrees that each of the Placement Agents is a third-party beneficiary of the acknowledgments, understandings, agreements, covenants, representations and warranties made by Subscriber contained in this Subscription Agreement. Each of the parties hereto shall be entitled to seek and obtain equitable relief, without proof of actual damages, including an injunction or injunctions or order for specific performance to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement to cause Subscriber to fund the Subscription Amount and cause the Closing to occur if the conditions in Section 2 this Subscription Agreement have been satisfied or, to the extent permitted by applicable law, waived by the applicable party entitled to waive any such condition. Each party hereto further agrees that none of the parties hereto or the Placement Agents shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10(j), and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument
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(k) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(l) [Reserved.]
(m) This Subscription Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf or any other form of electronic delivery (including any electronic signature complying with U.S. federal ESIGN Act of 2000)) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(n) The parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto and the Placement Agents shall be entitled to seek an injunction or injunctions to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled to seek at law, in equity, in contract, in tort or otherwise.
(o) This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other jurisdiction.
(p) EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
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(q) The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the state courts of New York or in the federal courts located in the state and county of New York (collectively the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this subscription agreement may be brought in any other forum. Notwithstanding the foregoing, a final judgement in any such action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby irrevocably waives all claims of immunity from jurisdiction and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 10(a) of this Subscription Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
(r) This Subscription Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Subscription Agreement, or the negotiation, execution or performance of this Subscription Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party (which, for the avoidance of doubt, shall not include the Placement Agents or any of their Affiliates). Each of the Issuer, Company and Subscriber further acknowledge and agree that each Placement Agent is a third-party beneficiary of the representations and warranties of the Issuer, the Company and Subscriber in this Subscription Agreement.
(s) The Issuer shall, by 9:00 a.m., Eastern Time, on the first Business Day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing, to the extent not previously publicly disclosed, all material terms of the transactions contemplated hereby (and by the Other Subscription Agreements), the Transaction and any other material, nonpublic information that each of the Issuer and the Company has provided to Subscriber at any time prior to the filing of the Disclosure Document. Notwithstanding the foregoing, or anything contained to the contrary in Section 10(c), neither the Issuer nor the Company shall publicly disclose the name of Subscriber or any affiliate or investment advisor of Subscriber, or include the name of Subscriber or any affiliate or investment advisor of Subscriber in any press release or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent (including by e-mail) of Subscriber, except as required by the federal securities laws, rules or regulations and to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the NYSE or Nasdaq regulations, in which case the Issuer and the Company shall provide Subscriber with reasonable prior written notice (including by e- mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure. Subject to the limitations of the following sentence, Subscriber hereby consents to the publication and disclosure in any Form 8-K filed by the Issuer with the Commission, in any filing with the Commission made in connection with the Share Sale Agreement and the Transaction, including any proxy statement, prospectus or registration statement related thereto or any other filing with the Commission pursuant to applicable securities laws, of Subscriber’s name and identity and the nature of Subscriber’s commitments, arrangements and understandings under and relating to this Subscription Agreement and, if deemed required or appropriate by the Issuer, a copy of this Subscription Agreement. Notwithstanding the foregoing or anything contained to the contrary in Section 10(c), the Issuer may make disclosures to an auditor or governmental or regulatory authority pursuant to any routine investigation, inspection, examination or inquiry without providing Subscriber with any notification thereof, unless Subscriber is the subject of any such investigation, inspection, examination or inquiry (in which case the preceding sentence shall govern).
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(t) The obligations of Subscriber under this Subscription Agreement are several and not joint with the obligations of any Other Subscriber or any other investor under the Other Subscription Agreements, and Subscriber shall not be responsible in any way for the performance of the obligations of any Other Subscriber under this Subscription Agreement or any other investor under the Other Subscription Agreements. The decision of Subscriber to purchase Subscribed Shares pursuant to this Subscription Agreement has been made by Subscriber independently of any Other Subscriber or any other investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Issuer or the Company or any of their subsidiaries which may have been made or given by any Other Subscriber or investor or by any agent or employee of any Other Subscriber or investor, and neither Subscriber nor any of its agents or employees shall have any liability to any Other Subscriber or investor (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any Other Subscription Agreement, and no action taken by Subscriber or investor pursuant hereto or thereto, shall be deemed to constitute Subscriber and other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Subscriber and other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the this Subscription Agreement and the Other Subscription Agreements. Subscriber acknowledges that no Other Subscriber has acted as agent for Subscriber in connection with making its investment hereunder and no Other Subscriber will be acting as agent of Subscriber in connection with monitoring its investment in the Subscribed Shares or enforcing its rights under this Subscription Agreement. Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any Other Subscriber or investor to be joined as an additional party in any proceeding for such purpose.
(u) If any change in the Ordinary Shares shall occur between the date hereof and immediately prior to the Closing by reason of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number and type of Subscribed Shares issued to the Subscriber and the Per Share Subscription Price shall be appropriately adjusted to reflect such change.
[Signature pages follow.]
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IN WITNESS WHEREOF, each of the Issuer, Company and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| METALS ACQUISITION LIMITED | |||
| By: | /s/ Mick McMullen | ||
| Name: | Mick McMullen | ||
| Title: | Chief Executive Officer | ||
| Address for Notices: | ||
| Century House, Ground Floor | ||
| Cricket Square, P.O. Box 2238 | ||
| Grand Cayman KY1-1107, Cayman Islands | ||
| METALS ACQUISITION CORP | ||
| By: | /s/ Jaco Crouse | |
| Name: | Jaco Crouse | |
| Title: | Chief Financial Officer | |
| Address for Notices: | ||
| Century House, Ground Floor | ||
| Cricket Square, P.O. Box 2238 | ||
| Grand Cayman KY1-1107, Cayman Islands | ||
Signature Page to MAC Subscription Agreement
| SUBSCRIBER: | ||
| Signature of Subscriber: | ||
| By: | /s/ Michael Spencer | |
| Name: Michael Spencer | ||
| Title: Managing Director | ||
| Date: | March 20, 2023 | |
| Name of Subscriber: | ||
| Osisko Bermuda Limited | ||
| (Please print. Please indicate name and capacity of person signing above) | ||
| Name in which shares are to be registered | ||
| (if different): | ||
| Email Address: | [***] | |
| Subscriber’s EIN: | ||
| Jurisdiction of residency: Bermuda | ||
| Number of Subscribed Shares subscribed for: | 1,500,000 | |
| Price Per Subscribed Share: | $10.00 | |
| Subscription Amount: | $ 15,000,000 |
You must pay the Subscription Amount by wire transfer of United States dollars in immediately available funds to the Escrow Account specified by the Company in the Closing Notice.
Signature Page to MAC Subscription Agreement
ANNEX A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Annex A should be completed and signed by Subscriber and constitutes a part of the Subscription Agreement.
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the box, if applicable) |
¨ Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).
| B. | FINRA INSTITUTIONAL INVESTOR STATUS (Please check the box) |
¨ Subscriber is a “institutional investor” (as defined in FINRA Rule 2111).
| C. | ACCREDITED INVESTOR STATUS (Please check the box) |
| ¨ | Subscriber is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and has marked and initialed the appropriate box below indicating the provision under which it qualifies as an “accredited investor.” |
| D. | NON-U.S. PERSON STATUS (Please check the box) |
x Subscriber is a non-U.S. person located outside of the United States.
| E. | AFFILIATE STATUS |
(Please check the applicable box)
SUBSCRIBER:
¨ is:
x is not:
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ¨ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company; |
| ¨ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ¨ | Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment advisor makes the investment decisions, or if the plan has total assets in excess of $5,000,000; |
| ¨ | Any corporation, similar business trust, partnership or any organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; |
| ¨ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
A-1
| ¨ | Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence must not be included as an asset; (b) indebtedness secured by the person’s primary residence up to the estimated fair market value of the primary residence must not be included as a liability (except that if the amount of such indebtedness outstanding at the time of calculation exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess must be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the residence must be included as a liability; |
| ¨ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |
| ¨ | Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; or |
| ¨ | Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests. |
| F. | FINRA INSTITUTIONAL ACCOUNT STATUS |
(Please check the applicable subparagraphs):
¨ Subscriber is an “institutional account” under FINRA Rule 4512(c).
¨ Subscriber is not an “institutional account” under FINRA Rule 4512(c).
SUBSCRIBER:
Print Name: Osisko Bermuda Limited
| By: | /s/ Michael Spencer | |
| Name: | Michael Spencer | |
| Title: | Managing Director | |
A-2
Exhibit 10.3
CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL,
AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
OSISKO BERMUDA LIMITED
and
METALS ACQUISITION CORP
and
METALS ACQUISITION LIMITED
and
METALS ACQUISITION CORP. (AUSTRALIA) PTY LTD
COPPER PURCHASE AGREEMENT
Dated as of March 20, 2023
TABLE OF CONTENTS
| ARTICLE 1 | ||
| INTERPRETATION | ||
| Section 1.1 | Definitions | 1 |
| Section 1.2 | Other Rules of Interpretation | 34 |
| Section 1.3 | Days | 35 |
| Section 1.4 | Joint and Several Liability | 35 |
| Section 1.5 | Merger | 35 |
| Section 1.6 | Schedules | 35 |
| ARTICLE 2 | ||
| PURCHASE AND SALE | ||
| Section 2.1 | Purchase and Sale | 37 |
| Section 2.2 | Delivery Obligations | 37 |
| Section 2.3 | Delivery of LME Warrants | 39 |
| Section 2.4 | Invoicing | 39 |
| Section 2.5 | Purchase Price | 40 |
| Section 2.6 | Loss of Offtaker Delivery | 40 |
| Section 2.7 | Minimum Lot Size | 40 |
| Section 2.8 | Copper Stream Percentage | 41 |
| Section 2.9 | Buy-Down Option | 41 |
| Section 2.10 | Copper Delivery Deferral Option | 42 |
| Section 2.11 | Proceeds Account and Cashflow Waterfall | 44 |
| ARTICLE 3 | ||
| DEPOSIT | ||
| Section 3.1 | Deposit | 44 |
| Section 3.2 | Closing Date Deliveries | 44 |
| Section 3.3 | Satisfaction of Conditions Precedent | 45 |
| Section 3.4 | Condition Subsequent | 45 |
| Section 3.5 | Use of Deposit | 46 |
| ARTICLE 4 | ||
| TERM | ||
| Section 4.1 | Term | 46 |
| Section 4.2 | Uncredited Deposit | 46 |
| ARTICLE 5 | ||
| REPORTING; BOOKS AND RECORDS | ||
| Section 5.1 | Reporting Requirements | 46 |
| Section 5.2 | Books and Records | 48 |
| Section 5.3 | Technical Reports | 48 |
| Section 5.4 | Inspections | 49 |
| Section 5.5 | Effective Date of Rights | 49 |
| Section 5.6 | Confidentiality | 50 |
| ARTICLE 6 | ||
| COVENANTS | ||
| Section 6.1 | Conduct of Operations | 51 |
| Section 6.2 | Processing/Commingling | 51 |
( i )
| Section 6.3 | Preservation of Corporate Existence | 52 |
| Section 6.4 | Insurance | 52 |
| Section 6.5 | Project Assets | 53 |
| Section 6.6 | Transfers | 53 |
| Section 6.7 | Offtake Agreements | 54 |
| Section 6.8 | Material Contracts | 55 |
| Section 6.9 | Restrictions on PSA Entities | 55 |
| Section 6.10 | Separation Requirements | 57 |
| Section 6.11 | Related Party Transactions | 57 |
| Section 6.12 | Distributions | 57 |
| Section 6.13 | Abandonment | 58 |
| Section 6.14 | Not Used | 58 |
| Section 6.15 | Code of Conduct | 58 |
| Section 6.16 | Anti-Corruption and Anti-Terrorism Laws | 58 |
| Section 6.17 | Sanctions | 59 |
| Section 6.18 | Financial Covenants | 59 |
| Section 6.19 | Taxation | 60 |
| ARTICLE 7 | ||
| GUARANTEES AND SECURITY | ||
| Section 7.1 | Guarantees and Security | 61 |
| ARTICLE 8 | ||
| REPRESENTATIONS AND WARRANTIES | ||
| Section 8.1 | Representations and Warranties of the Seller PSA Entities | 62 |
| Section 8.2 | Representations and Warranties of Purchaser | 62 |
| Section 8.3 | Survival of Representations and Warranties | 62 |
| Section 8.4 | Knowledge | 62 |
| ARTICLE 9 | ||
| DEFAULTS AND DISPUTES | ||
| Section 9.1 | Events of Default | 63 |
| Section 9.2 | Remedies | 64 |
| Section 9.3 | Indemnity | 65 |
| Section 9.4 | Disputed Reports | 65 |
| Section 9.5 | Disputes | 66 |
| Section 9.6 | Insolvency Event | 66 |
| ARTICLE 10 | ||
| ADDITIONAL PAYMENT TERMS | ||
| Section 10.1 | Payments | 67 |
| Section 10.2 | Taxes | 67 |
| Section 10.3 | New Tax Laws | 68 |
| Section 10.4 | Interest | 68 |
| Section 10.5 | Set Off | 68 |
| Section 10.6 | Judgment Currency | 69 |
| ARTICLE 11 | ||
| GENERAL | ||
| Section 11.1 | Further Assurances | 69 |
| Section 11.2 | No Joint Venture | 69 |
| Section 11.3 | Governing Law | 69 |
( ii )
| Section 11.4 | Costs and Expenses | 69 |
| Section 11.5 | Survival | 70 |
| Section 11.6 | Notices | 70 |
| Section 11.7 | Press Releases | 71 |
| Section 11.8 | Amendments | 71 |
| Section 11.9 | Beneficiaries | 71 |
| Section 11.10 | Entire Agreement | 71 |
| Section 11.11 | Waivers | 71 |
| Section 11.12 | Assignment | 72 |
| Section 11.13 | Invalidity and Unenforceability | 72 |
| Section 11.14 | PPSA Provisions | 72 |
| Section 11.15 | Counterparts | 73 |
ADDENDA
Schedule A MINING PROPERTIES (WITH MAP OF STREAM PROPERTIES)
Schedule B CORPORATE STRUCTURE AND ORGANIZATION
Schedule C REPRESENTATIONS AND WARRANTIES OF SELLER PSA ENTITIES
Schedule D REPRESENTATIONS AND WARRANTIES OF PURCHASER
Schedule E MATERIAL CONTRACTS
Schedule F STREAM NPV PROCEDURES
Schedule G TRANSACTION SECURITY DOCUMENTS
Schedule H MONTHLY REPORT
Schedule I ACCESSION AGREEMENT
Schedule J ANNUAL COMPLIANCE CERTIFICATE
Schedule K CONDITIONS PRECEDENT
Schedule L CONDITIONS SUBSEQUENT
Schedule M EXISTING SECURITY
( iii )
COPPER PURCHASE AGREEMENT
THIS COPPER PURCHASE AGREEMENT dated as of March 20, 2023 (the “Signing Date”) between OSISKO BERMUDA LIMITED, an exempted company existing under the laws of Bermuda, as purchaser, METALS ACQUISITION LIMITED, a company incorporated under the laws of Jersey, as seller, METALS ACQUISITION CORP, a Cayman Islands exempted company, as seller, METALS ACQUISITION CORP. (AUSTRALIA) PTY LTD (ACN 657 799 758), a company existing under the laws of Australia, as a seller psa entity, and each other Person who from time to time accedes to this Agreement as a Seller PSA Entity.
RECITALS:
| A. | Upon completion of the Merger of MAC with and into MAL, MAL will continue as the surviving company and thereby all undertaking, property and liabilities of MAC will vest in MAL including all Copper Stream Obligations; |
| B. | MAC Australia is a wholly owned Subsidiary of MAC and upon completion of the Merger will be a wholly-owned Subsidiary of MAL; |
| C. | Upon completion of the Acquisition Transaction, MAC Australia will own the legal and beneficial interest in all of the issued and outstanding Equity Securities in the capital of the Project Owner; |
| D. | The Project Owner is the sole legal and beneficial owner of the Stream Properties and the other Project Assets; and |
| E. | Seller has agreed to sell to Purchaser, and Purchaser has agreed to purchase from Seller, an amount of Refined Copper equal to the Reference Copper, subject to and in accordance with the terms and conditions of this Agreement; |
NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
| Section 1.1 | Definitions |
As used in this Agreement, including the recitals and schedules hereto, the following terms have the following meanings:
“Abandonment” has the meaning set out in Section 6.13.
“Abandonment Property” has the meaning set out in Section 6.13.
“Acceptable Bank” means:
| (a) | a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or A3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency; or |
| (b) | any other bank or financial institution approved by Purchaser. |
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“Accession Agreement” means the accession agreement between the Project Owner and Purchaser substantially in the form attached as Schedule I to be executed in accordance with Section 3.4(2) and Schedule L.
“Account Bank Agreement” means:
| (a) | in relation to the Initial Account Bank, the ‘account bank agreement’ to be entered into prior to the Closing Date and the accompanying document titled “conditions of consent to charge”; and |
| (b) | in relation to a replacement account bank, any other account bank agreement entered into between Seller and that replacement account bank in the form approved by Purchaser. |
“Acknowledgement” means the acknowledgement and affirmation executed and delivered by MAL, and consented to by MAC Australia, pursuant to which MAL acknowledges and affirms that all undertaking, property and liabilities of MAC vested in MAL as the surviving company after the Merger and MAL has assumed all Copper Stream Obligations of MAC.
“Acquiror” has the meaning set out in the definition of “Change of Control”.
“Acquisition Finance Documents” means, collectively, the Silver Stream Documents, the Copper Stream Documents, the Senior Facility Agreement, the Mezzanine Debt Facility Agreement, the Glencore Royalty Deed, the Transaction Security Documents and all other agreements and documents to be entered into or delivered by the Seller Group Entities or any one of them in connection with the Senior Project Acquisition Facility, the Mezzanine Debt or the Glencore Royalty.
“Acquisition Transaction” means the consummation of the transactions contemplated by the SSA, including acquisition by MAC Australia of 100% of the issued share capital in the Project Owner.
“Adverse Impact” means any effect, event, occurrence, amendment or other change that, when taken together with all other effects, events, occurrences, amendments or other changes, is or would reasonably be likely to:
| (a) | have a material adverse effect on: (i) the business, operation, property, condition (financial or otherwise) or prospects of the Seller PSA Entities taken as a whole; (ii) the ability of one or more of the Seller PSA Entities to perform its obligations under any of the Copper Stream Documents; (iii) the validity or enforceability of, or the effectiveness or ranking of the Security granted or purporting to be granted under any of the Copper Stream Security Documents or the rights or remedies of Purchaser under any of the Copper Stream Documents; |
| (b) | have a material adverse effect on the Project Owner’s ability to operate the Mine in accordance with the Mine Plan as in effect immediately prior to the occurrence of the Adverse Impact; |
| (c) | significantly decrease or delay the expected copper production from the Stream Properties or otherwise significantly decrease or delay the expected Reference Copper in each case based on the Mine Plan in effect at the time of the occurrence of such effect, event, occurrence, amendment or other change; or |
| (d) | result in a Trigger Event. |
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“Affiliate” means, in relation to any Person, any other Person controlling, controlled by, or under common control with such first mentioned Person.
“Agreement” means this Copper Purchase Agreement and all attached schedules, in each case as the same may be supplemented, amended, restated, modified or superseded from time to time in accordance with the terms hereof.
“Annual Compliance Certificate” means the certificate of the chief financial officer of Seller substantially in the form attached as Schedule J and confirming the matters set out therein.
“Anti-Corruption Laws” means, with respect to any Person, any law, judgment, order, executive order, decree, ordinance, rule or regulation of any Governmental Authority related to bribery or corruption binding on or affecting such Person or its property or operations including (i) the United States Foreign Corrupt Practices Act of 1977, as amended; (ii) the Criminal Code Act 1995 (Cth); (iii) the Corruption (Jersey) Law 2006; (iv) United Kingdom Bribery Act 2010; (v) the Corruption of Foreign Public Officials Act (Canada), as amended; (vi) sections 121 (Frauds on the Government) and 426 (Secret Commissions) of the Criminal Code (Canada); (vii) the OECD Convention of December 17, 1997 with respect to measures against corruption of foreign public officials and any OECD Guidelines or Action Statements with respect thereto; and (viii) any other applicable national and international laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.
“Anti-Terrorism Laws” means, with respect to any Person, any law, judgment, order, executive order, decree, ordinance, rule or regulation of any Governmental Authority related to anti money laundering, anti-terrorist financing, Sanctions and “know your client” laws binding on or affecting such Person or its property or operations including (i) the U.S. Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (United States), as amended; (iii) the United States Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001; (iv) the Bank Secrecy Act (United States), as amended; (v) the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth); (vi) the Suppression of Terrorism Act 1978 (Jersey) Order 19782; (vii) the Terrorism (Jersey) Law 2002; (viii) the Proceeds of Crime and Terrorism (Miscellaneous Provisions) (Jersey) Law 2014; (ix) the Sanctions and Asset Freezing (Jersey) Law 2019; (x) the Sanctions and Asset Freezing (Implementation of External Sanctions) (Jersey) Oder 2021; (xi) the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); (xii) Parts II.1 (Terrorism) and XII.2 (Proceeds of Crime) of the Criminal Code (Canada); (xiii) regulations promulgated pursuant to the Special Economic Measures Act (Canada), (xiv) the United Nations Act (Canada), (xv) the Justice for Victims of Corrupt Foreign Officials Act (Canada), and (xvi) the Freezing Assets of Corrupt Foreign Officials Act (Canada) and all regulations and orders made pursuant to these statutes.
“Applicable Law” means any law, regulation, decision, ordinance, code, order or other requirement or rule of law or the rules, policies, orders or regulations of any Governmental Authority, including any judicial or administrative interpretation thereof, applicable to a Person or any of its properties, assets, businesses or operations.
“Approved Acquiror” means a Person that:
| (a) | has sufficient financial resources and technical and operational capability to continue the mining operations and activities pertaining to or in respect of the Mine, the Stream Properties and the Mineral Processing Facilities in accordance with all Applicable Laws, the Mine Plan, the Authorisations and Good Practice Standards; |
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| (b) | (i) is incorporated or organized (with a substantial presence), has its primary stock exchange listing, management headquarters and presence of substantial assets in the United States, Canada, Western Europe, Japan, Australia, Peru, Mexico, Brazil, Chile and South Africa or other jurisdictions with an equivalent rule of law environment and ability to enforce judgments, or (ii) is otherwise acceptable in the discretion of Purchaser; and |
| (c) | is not a Sanctioned Person. |
For the purpose of this definition in order for a Person to have sufficient technical expertise, the Seller PSA Entities must demonstrate that such Person (together with its Affiliates) has the team, or will, following the Transfer or Change of Control, as applicable, have the team, with the proven ability and experience to develop and operate a copper mine and processing facility of comparable size and type to the Mine (such ability and experience to include the ability to provide operating oversight and have the expertise to manage the capital allocation decisions and technical evaluation for capital expansion projects); such requirement will be deemed to be satisfied if the operating team for the Mine following the completion of the Transfer or Change of Control, as applicable, materially remains the same as the operating team for the Mine prior to such Transfer or Change of Control.
“Approved Hedging” has the meaning set out in paragraph (b) in the definition of Permitted Secured Debt.
“Arbitration Rules” means the International Arbitration Rules of the International Centre for Dispute Resolution.
“Auditor’s Report” means a written report prepared by a national accounting firm in Australia that is independent of the Seller Group Entities and Purchaser, is mutually agreeable to the Parties and has experience and expertise in determining the quantity of copper mined, produced, extracted or otherwise recovered from mining projects, which report determines at a minimum the number of tonnes of Reference Copper that Purchaser was entitled to have received pursuant to this Agreement in respect of any period in dispute.
“Authorisation” means:
| (a) | an authorization, consent, approval, resolution, licence (including each Water Licence), permit, order, concession, franchise, exemption, filing or registration; or |
| (b) | in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Authority intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action. |
“Available Cash” means any amounts classified according to applicable IFRS as ‘Cash’ (which is held with an Acceptable Bank).
"Available Copper Deposit” means $75,000,000.
"Backstop Date” has the meaning given in Section 2A.1(3).
“Base Case Financial Model” means the excel document in a form and substance equivalent to that provided on the Closing Date comprising the reserves and resources position, business plan, production, operating and financial forecasts (including forecast capital expenditure and forecast revenues) of MAC Australia and its Subsidiaries from the Closing Date until the end of the currently forecast life of mine, or in relevant cases, such longer term as necessary to demonstrate compliance with any forward-looking financial covenants required under this Agreement and any Permitted Secured Debt referred to in paragraph (a) or (c) of the definition thereof, provided to Purchaser under Section 3.2, as updated annually and from time to time in accordance with this Agreement and for the purposes of evidencing that MAC Australia is permitted to increases the amount of hedging under the Approved Hedging.
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“Base Interest Rate” means Term SOFR plus 12% per annum.
“Books and Records” means all books, records, invoices, data, documentation, weight, moisture and assay certificates, scientific and technical information, samples and other information relating to operations and activities with respect to the Mine, the Mining Properties and the mining, treatment, processing, milling, leaching, gravity, refining, concentrating and transportation of Minerals.
“Business Day” means any day (other than a Saturday or Sunday) on which banks are open for general business in Sydney, London, Bermuda and Jersey.
“Buy-Down Effective Date” has the meaning set out in Section 2.9(1).
“Buy-Down Option” has the meaning set out in Section 2.9(1).
“Buy-Down Stream Percentage” means, as applicable, any of the Option 1 Threshold Stream Percentage, the Option 1 Tail Stream Percentage, the Option 2 Threshold Stream Percentage and the Option 2 Tail Stream Percentage.
“Buy-Down Threshold” means, as applicable, any of the Option 1 Threshold Quantity and Option 2 Threshold Quantity.
“Cambiate Equipment Supply Agreement” means the Cambiate equipment supply (loaders & trucks) agreement dated June 30, 2020 with Sandvik Mining and Construction Australia Pty Ltd relating to the Project.
“Cash Equivalent Investments” means at any time:
| (a) | certificates of deposit maturing within six months after the relevant date of calculation and issued by an Acceptable Bank; |
| (b) | bonds, debentures, stock, treasury bills, notes or any other security issued or guaranteed by the government of the United States of America, the Commonwealth of Australia or any government of any State or Territory of the Commonwealth of Australia, the United Kingdom, any member state of the European Economic Area or any Participating Member State (other than Portugal, Ireland, Greece or Spain) or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; |
| (c) | commercial paper (not convertible or exchangeable to any other security): |
| (i) | for which a recognised trading market exists; |
| (ii) | issued by an issuer incorporated in the United States of America, Australia, the United Kingdom, any member state of the European Economic Area or any Participating Member State; |
| (iii) | which matures within six months after the relevant date of calculation; and |
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| (iv) | which has a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
| (d) | any investment in money market funds (i) which have a credit rating of either A-1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody's Investors Service Limited, (ii) which invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above and (iii) to the extent that investment can be turned into cash on not more than 30 days' notice; |
| (e) | overnight deposits held with an Acceptable Bank; or |
| (f) | any other debt security approved by the Senior Project Acquisition Facility lenders or agent thereunder, |
in each case, to which MAC Australia is alone (or together with other Seller PSA Entities) beneficially entitled at that time and which is not issued or guaranteed by any Seller PSA Entity or subject to any Encumbrance (other than Encumbrance arising under the Acquisition Finance Documents).
“Cashflow Waterfall” means the order of payments that may be made from the Proceeds Account as set out in Part A (Pre-Enforcement Cashflow Waterfall) of Schedule 5 (Cashflow Waterfalls) of the Intercreditor Deed.
“Cement Supply Agreement” means the forward purchase agreement – supply of cement with a commencement date of 1 January 2022 between the Project Owner and East Coast Cement Pty Ltd ACN 603 062 497.
“Change of Control” of a Person means the consummation of any transaction, including any consolidation, arrangement, amalgamation, merger or demerger or any issue, Transfer or acquisition of voting shares, the result of which is that any other Person or group of other Persons acting jointly or in concert for purposes of such transaction (any such Person or group of Persons being referred to as the “Acquiror”): (i) becomes the beneficial owner, directly or indirectly, of 50% or more of the voting shares of such Person, measured by voting power rather than number of shares; or (ii) acquires control of such Person.
“Closing Date” has the meaning set out in Section 3.2(1).
“Closing Date Security Documents” means, collectively, the Holdco Guarantee, the Holdco Security Agreements and the Seller Security Agreements.
“Cobar Terminal Services Agreement” means the Cobar terminal services agreement dated 31 August 2021 between the Project Owner and Aurizon Port Services NSW Pty Ltd ACN 103 570 181.
“Code of Conduct” has the meaning set out in Section 6.15(1).
“Collateral” means all present and after acquired property and assets (whether real, personal or other and including Equity Securities and the Project Assets) of the Seller PSA Entities in which charges, mortgages, assignments by way of security or security interests are granted or purported to be granted pursuant to the Security Documents but excluding the Excluded Shares.
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“Commingling Plan” has the meaning set out in Section 1.1(2).
“Commitment Documents” means the backstop financing commitment letter dated December 27, 2022 between Seller and Purchaser, including the term sheet attached thereto as Exhibit A.
“Compensation Plan” has the meaning set out in Section 1.1(2).
“Comprehensively Sanctioned Country or Territory” means a country or territory that is, or whose government is, the subject of Sanctions, including the Crimea Region of Ukraine, the Democratic Republic of North Korea, the Donetsk People’s Republic, the Luhansk People’s Republic, Cuba, Iran, Sevastopol, Sudan, Syria and Russia.
"Completion" has the meaning given in the SSA, as in effect on the date hereof.
“Confidential Information” has the meaning set out in Section 5.6(1).
“Consent Deed” means a consent deed in a form acceptable to Purchaser (acting reasonably) in relation to the attachment of the Security to the following:
(a) the Diesel Supply Agreement;
(b) the Cement Supply Agreement; and
(c) any other Material Contract which Purchaser determines (acting reasonably) requires consent to the Security attaching to it or any property in connection with it.
“Consultancy Services Umbrella Agreement” means the umbrella agreement - consultancy services" dated 8 February 2021 between the Project Owner and Golder Associates Pty Ltd ACN 006 107 857.
“Contingent Copper Payments” means, collectively (i) the unsecured, subordinated payment of up to US$75,000,000 deferred consideration payable by MAL to Glencore Operations Australia Pty Limited under the SSA payable if, over the life of the Project, the average daily LME closing price of copper is greater than US$9,370 per metric tonne for any rolling 18 month period (starting at Completion), and (ii) the unsecured, subordinated payment of up to US $75,000,000 deferred consideration payable by the Company to Glencore Operations Australia Pty Limited under the SSA payable if, over the life of the mine, the average daily LME closing price of copper is greater than US$9,920 per metric tonne for any rolling 24 month period (commencing at Completion);
“control” means the right, directly or indirectly, to direct or cause the direction of the management of the business or affairs of a Person, whether by ownership of securities, by contract or otherwise (including by way of entitlement to nominate a majority of the directors of such entity); and “controls”, “controlling”, “controlled by” and “under common control with” have corresponding meanings.
“Cooling Plant Agreement” means the wet equipment hire contract dated 6 September 2019 between the Project Owner and Aggreko Generator Rentals Pty Ltd ACN 001 991 457.
"Copper Backstop Notice” has the meaning set out in Section 2A.1(2).
“Copper Cash Price” means 4% of the Copper Market Price.
“Copper Deferral Option Period” has the meaning set out in Section 2.10(1).
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“Copper Market Price” means, with respect to any day, the per tonne cash settlement price as quoted in US dollars by the LME for Grade A copper on such day or the immediately preceding day if such day is not a trading day; provided that, if for any reason the LME is no longer in operation or if the per tonne price of copper is not calculated on behalf of or confirmed, acknowledged by, or quoted by the LME, the Copper Market Price shall be determined in a manner endorsed by the LME, failing which the Copper Market Price will be determined by reference to the per tonne price of copper on another commodity exchange satisfactory to Purchaser, acting reasonably.
“Copper Purchase Price” has the meaning set out in Section 2.5(1).
“Copper Stream Documents” means, collectively, this Agreement, the Guarantees, the Copper Stream Security Documents, the Intercreditor Deed, the Accession Agreement, the Acknowledgement, the Subordination Deed, the Tripartite Deeds, the Consent Deeds, the Account Bank Agreement and each other agreement, document, instrument or certificate delivered for the benefit of Purchaser pursuant to or otherwise in connection with any of this Agreement, the Guarantees, the Copper Stream Security Documents, the Intercreditor Deed, the Accession Agreement, the Acknowledgement, the Subordination Deed, the Tripartite Deeds, the Consent Deeds and any other agreement designated from time to time by Purchaser and Seller as a “Copper Stream Document” for purposes of the Guarantees and the Copper Stream Security Documents.
“Copper Stream Obligations” means all indebtedness, liabilities and other obligations, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time or from time to time due or accruing due and owing by or otherwise payable or to be performed by any Seller Group Entity to Purchaser under, in connection with or pursuant to the Copper Stream Documents.
“Copper Stream Percentage” has the meaning set out in Section 2.8(1) and, for the avoidance of doubt, includes the First Stream Percentage, the Second Threshold Stream Percentage, the Tail Stream Percentage and any Buy-Down Stream Percentage, as applicable.
“Copper Stream Security Documents” means, collectively, the agreements itemized in Part I of Schedule G and all other assignments, deeds of trust, mortgages, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants to Purchaser mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the Copper Stream Obligations and “Copper Stream Security Document” means any of the Copper Stream Security Documents
“Corporations Act” means the Corporations Act 2001 (Cth) (Australia).
“Date of Delivery” has the meaning set out in Section 2.3(2).
“Deposit” means the amount equal to the Available Copper Deposit multiplied by the Elected Deposit Percentage.
“Deposit Reduction Date” means the date on which the Uncredited Deposit is reduced to nil in accordance with this Agreement.
“Derivative Transaction” means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price including Hedging Contracts.
“Diesel Supply Agreement” means the diesel supply agreement dated 7 September 2012 between the Project Owner and Glencore Singapore Pte Ltd ABN 42 883 745 924
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“Disclosing Party” has the meaning set out in Section 5.6(1).
“Disclosure Letter” means the disclosure letter dated the date of this Agreement and delivered by Seller to Purchaser with this Agreement.
“Dispute” means any and all questions, claims, controversies, or disputes arising out of or relating to the validity, construction, interpretation, meaning, performance, effect or breach of any one or more of this Agreement and any Copper Stream Document, or the rights and liabilities arising hereunder or thereunder.
“Dispute Notice” has the meaning set out in Section 9.4(1).
“Distribution” means with respect to any Seller PSA Entity:
| (a) | the retirement, redemption, retraction, purchase or other acquisition by such Person of any Equity Securities of such Person; |
| (b) | the declaration or payment by such Person of any dividend, return of capital or other distribution (in cash, securities, other property or otherwise) of, on or in respect of, any Equity Securities of such Person or any other payment or distribution of any kind to its direct or indirect securityholders; |
| (c) | any other payment or distribution (in cash, securities, other property, or otherwise) by such Person of, on or in respect of, its Equity Securities; |
| (d) | any payment, repayment, redemption, repurchase or acquisition by such Person of, or on account of, Subordinated Intercompany Debt or any other Financial Indebtedness subordinate to the Copper Stream Obligations, including any payment on account of principal, interest, bonus, premium, make-whole or otherwise; and |
| (e) | any management, consulting or similar fee or any bonus payment or comparable payment, or by way of gift or gratuity, to any Affiliate of such Person or to any director or officer thereof, excluding, for greater certainty, employment compensation in the ordinary course of business. |
“Distribution Account” means the account held with the Initial Account Bank and styled ‘Distribution Account’ and any replacement bank account with a replacement bank that is an Acceptable Bank and acceptable to Purchaser and agreed between Seller and Purchaser to be the Distribution Account.
“EBITDA” means for any period, the total consolidated operating income of MAC Australia and its Subsidiaries for that period as stated in MAC Australia’s financial statements before interest and taxation and:
| (a) | after adding back any amount attributable to the amortization, depreciation or impairment charges and any unrealized gains or losses in respect of any Derivative Transactions other than any Derivative Transactions entered into in accordance with the Approved Hedging; |
| (b) | excluding any exceptional, one off, non-recurring or extraordinary items which represent gains or losses including those arising on: |
| (i) | the restructuring of the activities of an entity and reversals of any provisions for the cost of restructuring; |
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| (ii) | disposals, revaluations or impairment of non-current assets; and |
| (iii) | disposals of assets associated with discontinued operations, |
on the basis that the closing out of any Derivative Transactions is not an item of an unusual or non-recurring nature for these purposes;
| (c) | excluding any upward or downward adjustment of any non-cash provision during that period; and |
| (d) | excluding unrealised mark-to-market gains and losses under any Derivative Transaction entered into in accordance with the Approved Hedging. |
“Elected Deposit Percentage” has the meaning set out in Section 2A.1(2).
“Encumbrances” means all mortgages, charges, assignments (including by way of security), hypothecs, pledges, security interests, liens, movable assets securities, trusts, easements, restrictions, patent or other reservation in minerals, royalty claims, and other encumbrances and adverse claims of every nature and kind, including any “security interest” as defined in sections 12(1) or (2) of the PPSA.
“Environmental Laws” mean Applicable Laws relating to pollution or protection of the environment or any natural resource, archaeological preventive programs or occupational or public health or safety, including Applicable Laws relating to emissions, discharges, or releases of Hazardous Substances (whether ordinary, industrial, toxic or hazardous) or wastes into the environment (including ambient air, atmosphere, fauna, flora, surface water, ground water, aquifers, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, management, treatment, storage, disposal, transport or handling of Hazardous Substances (whether ordinary, industrial, toxic or hazardous) or wastes, which are applicable to the Mine, the Project Assets or the other assets owned, controlled or managed by the Project Owner or to the activities at any time of the Project Owner.
“Equity Securities” means, with respect to any Person, any and all shares, interests, participations, rights in, or other equivalents (however designated and whether voting and non-voting) of, such Person’s capital, whether outstanding on the date hereof or issued after the date hereof, including any interest in a partnership, limited partnership or other similar Person and any beneficial interest in a trust, and any and all rights, warrants, options or other rights exchangeable for or convertible into any of the foregoing.
“Event of Default” has the meaning set out in Section 9.1.
“Excluded Shares” means the issued and outstanding shares held by Seller in the capital of MAC AU 1 Pty Ltd (ACN 665 573 875), MAC AU 2 Pty Ltd (ACN 665 574 167), MAC AU 3 Pty Ltd (ACN 665 574 210) and MAC AU 4 Pty Ltd (ACN 665 574 327) so long as the Persons issuing such shares have no direct or indirect interest in the Project Owner or the Project Assets.
“Excluded Taxes” means with respect to Purchaser, income or franchise Taxes imposed on (or measured by) its taxable income by Bermuda, or by the jurisdiction under the Applicable Law of which such recipient is organized or in which its principal office is located.
“Financial Indebtedness” means, with respect to any Person, any indebtedness for or in respect of:
| (a) | moneys borrowed and any debit balance at any financial institution; |
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| (b) | any amount raised by acceptance under any acceptance credit, bill acceptance or bill endorsement facility or dematerialised equivalent; |
| (c) | any amount raised under any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
| (d) | the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a balance sheet liability (other than any liability in respect of a lease or hire purchase contract which would, in accordance with IFRS in force before 1 January 2019, have been treated as an operating lease); |
| (e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
| (f) | any redeemable shares where the holder has the right, or the right in certain conditions, to require redemption; |
| (g) | any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition having the commercial effect of a borrowing; |
| (h) | excluding the Contingent Copper Payments, consideration for the acquisition of assets or services payable more than 90 days after acquisition; |
| (i) | any Derivative Transaction (and, when calculating the value of any Derivative Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Derivative Transaction, that amount) shall be taken into account); |
| (j) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
| (k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) – (j) above. |
“FIRB Requirements” means (i) the Treasurer of the Commonwealth of Australia ("Treasurer") (or the Treasurer’s delegate) has provided a written no objections notification to the entry by Purchaser into the ‘Proposed Transaction’ as that term is defined within Purchaser’s application to the Treasurer dated 9 March 2023 for the purposes of Part 2, Divisions 2 and 3 of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (the “FIRB Application”) either without conditions or with conditions acceptable to Purchaser (acting reasonably) or (ii) following the FIRB Application having been given by Purchaser to the Treasurer, under the Foreign Acquisitions and Takeovers Act 1975 (Cth) the Treasurer has ceased to be empowered to make any order under Part 3 of that Act because the applicable time limit on making orders and decisions under that Act has expired.
"First Buy-Down Amount” means $40,000,000.
“First Stream Percentage” has the meaning set out in Section 2.8(1).
“Five Year Anniversary Date” means the date that is the fifth (5th) anniversary of the Closing Date.
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“Freehold Properties” means each freehold property held by the Project Owner listed in Part II of Schedule A.
“Funds Flow Statement” has the meaning set out in paragraph (ee) of Schedule K.
“Glencore Offtake Agreement” means the offtake agreement to be entered on or prior to the Closing Date between Glencore International AG, as buyer, and the Project Owner, as seller, with respect to purchase of copper concentrate from the Mine.
“Glencore Royalty” means the 1.5% net smelter return royalty on the Royalty Area (as defined therein) granted by the Project Owner to Glencore Operations Australia Pty Limited in connection with the Acquisition Transaction pursuant to the Glencore Royalty Deed.
“Glencore Royalty Deed” means the royalty deed to be entered into on or before the Closing Date between the Project Owner as grantor, Seller as guarantor and Glencore Operations Australia Pty Limited, as grantee.
“Good Practice Standards” means, in relation to the business of mining (including all relevant disciplines pertaining thereto, such as metallurgy, processing, engineering, environmental and governance matters, relations with community and indigenous peoples and other social matters), the exercise of that degree of skill, care, prudence, operational and financial foresight and operating practice which would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking as the Project Owner under the same or similar circumstances, with the exercise of skill, care, prudence, operational and financial foresight and operating practices to be substantially in accordance with recognised best practices in the mining industry in Australia.
“Governmental Authority” means any government or any governmental, semi-governmental or judicial entity or authority, including any self-regulatory organisation established under statute or any stock exchange.
“GST Law” means the same as ‘GST law’ means in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
“Guarantees” means, collectively, the Holdco Guarantee and the Project Owner Guarantee.
“Haulage Agreement” means the rail haulage services agreement dated on or around 1 December 2009 and as varied on 1 December 2015 and 8 September 2020 between the Project Owner and Qube Logistics (Rail) Pty Ltd ACN 082 313 415 (formerly South Spur Rail Services Pty Ltd).
“Hazardous Substance” means any substance or a composition that contains one or more substances (a) whose characteristics pollute or damage the environment or any natural resource, (b) which is dangerous or poses a risk to the life or health of any human, including those substances with proven acute or chronic toxicity and other damaging effects, or (c) which is defined or otherwise regulated under any Environmental Law.
"Hedge Counterparty” means any person which is, or has become, a party to the Senior Security Trust Deed as a Hedge Counterparty in accordance with the Senior Security Trust Deed and to the Intercreditor Deed as a Hedge Counterparty in accordance with the Intercreditor Deed.
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“Hedging Contracts” means any any master agreement, confirmation, schedule or other agreement entered into or to be entered into by Seller and a Hedge Counterparty for the purpose of hedging only the types of liabilities and/or risks in relation to one or more commodities, currencies, interest, securities or other matters, including commodity futures trading, forward sale and/or purchase contracts, spot-deferred contracts, option contracts or trading, metals trading, precious metal loans, fixed price offtake agreements or other exchange, swap, forward, cap, collar, floor, option or other hedging or similar agreement or any combination thereof, or any other similar transactions.
“Holdco Guarantee” has the meaning set out in Section 7.1(1).
“Holdco Security Agreements” has the meaning set out in Section 7.1(1).
“IFRS” means the International Financial Reporting Standards applied in accordance with generally accepted accounting principles, standards and practices in Australia.
“Immaterial Mining Properties” means any one of the following assets:
| (a) | Exploration Lease 6907 (EL 6907) and Exploration Lease 6223 (EL 6223); |
| (b) | obsolete or redundant vehicles, plant and equipment, |
| (c) | leasehold interests in, or licences of, residential property to employees of the Borrower or Target in the ordinary course of business; and |
| (d) | other Mineral Facilities disposed of in the ordinary course of business that are not reasonably required for, or useful in connection with, the operation of the Project in accordance with the then current Mine Plan. |
“including” or “includes” means including without limitation or includes without limitation.
“Initial Account Bank” means Citibank N.A., Sydney Branch.
“Initial Technical Report” means the independent technical report summary dated May 13, 2022 prepared by Behre Dolbear Australia Pty Ltd in accordance with SEC Regulation S-K Technical Report Summary requirements in respect of CSA Copper Mine – New South Wales – Australia.
“Initial Term” has the meaning set out in Section 4.1.
“Insolvency Event of Default” means any one of the following events:
| (a) | a Seller PSA Entity or so long as any Permitted Secured Debt is outstanding, any other Seller Group Entity: |
| (i) | is or is presumed or deemed to be unable or admits inability to pay its debts as they fall due; |
| (ii) | suspends making payments on any of its debts; |
| (iii) | is bankrupt or any applications are made, proceedings are commenced or other steps taken to for it to be declared bankrupt under Applicable Law or any step is taken by it to participate in a scheme of arrangement under Part 18A of the Companies (Jersey) Law 1991; or |
| (iv) | by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; or |
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| (b) | a moratorium is declared in respect of any indebtedness of any member of the Seller Group Entities; |
| (c) | any corporate action, legal proceedings or other procedure or step is taken in relation to: |
| (i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, liquidation, striking off, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Seller PSA Entity or other Seller Group Entity other than the Merger, a solvent liquidation or reorganisation of any member of the Seller Group Entities which is not a Seller PSA Entity except an application made to a court for the purpose of winding up such a Person which is disputed by a Seller PSA Entity or other relevant Seller Group Entity acting diligently and in good faith and dismissed within 14 Business Days; or |
| (ii) | a composition, compromise, assignment or arrangement with any creditor of any Seller PSA Entity or other Seller Group Entity; or |
| (iii) | the appointment of a liquidator (other than in respect of a solvent liquidation of member of the Seller Group Entities which is not a Seller PSA Entity), receiver, administrative receiver, administrator, restructuring officer, compulsory manager or other similar officer in respect of any Seller PSA Entity or other Seller Group Entity or any of its assets except on application made to a court for the purpose of appointing such a Person which is disputed by a Seller PSA Entity or other relevant Seller Group Entity acting diligently and in good faith and dismissed within 14 Business Days; or |
| (iv) | enforcement of any Encumbrance over any assets of any member of the Seller Group Entities; |
or any analogous procedure or step is taken in any jurisdiction; or
| (d) | any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Seller PSA Entity having an aggregate value equal to or greater than US$10,000,000. |
“Intercreditor Deed” means the intercreditor deed to be dated before the Closing Date between Seller, MAC Australia, the Senior Security Trustee, Citisecurities Limited as senior agent, Citibank, N.A., Sydney Branch, Bank of Montreal, National Bank of Canada and The Bank of Nova Scotia as senior lenders, Citibank N.A., Sydney Branch as hedging counterparty, Sprott Resource Lending Corp. as mezzanine security trustee, Sprott Resource Lending Corp. as mezzanine note agent, Sprott Private Resource Lending II (Collector-2), LP as mezzanine noteholder, Purchaser as silver streamer and copper streamer and Glencore Operations Australia Pty Limited as NSR holder.
“IRR Amount” means an amount calculated upon the occurrence of an Event of Default and termination of this Agreement equal to (i) the sum of the Deposit and a per annum percentage return on the Deposit equal to (x) [***] from the Closing Date to the date of the occurrence of such Event of Default, and (y) [***] from the date of the occurrence of such Event of Default to the date of indefeasible payment in full of the Copper Stream Obligations, less (ii) the net value of Refined Copper delivered to Purchaser under this Agreement where the net value of Refined Copper delivered hereunder is the Copper Market Price of such Refined Copper on the day immediately prior to the Date of Delivery of such Refined Copper less the Copper Cash Price paid by Purchaser on account of such Refined Copper.
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“ITSA” means an indirect tax sharing agreement which:
| (a) | satisfies the requirements of section 444-90 of the Taxation Administration Act 1953 (Cth); and |
| (b) | covers all group liabilities of the GST Group (as defined in the GST Law) to which a Seller PSA Entity or the Project Owner is a member; |
“Jersey Companies Law” means the Companies (Jersey) Law 1991;
“Jersey Consent Letter” means a consent letter (in the form acceptable to Purchaser) executed by any party granting a Copper Stream Security Document governed by the laws of Jersey, consenting to the registration of a financing statement on the SIR, in respect of the security interest to be created pursuant to such Copper Stream Security Document;
“JORC Code” means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia, as amended.
“Judgment Currency” has the meaning set out in Section 10.6.
"Legal Reservations” means:
| (a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, liquidation, reorganisation, moratoria, administration and other laws generally affecting the rights of creditors; |
| (b) | the time barring of claims under applicable limitations laws, the possibility that an undertaking to assume liability for or indemnity of a person against non-payment of stamp duty may be void and defences of set-off or counterclaim; and |
| (c) | any other matters which are set out as qualification as to matters of law in any legal opinions to be given to Purchaser in connection with this Agreement. |
"Less Key Material Contracts” means the contracts listed under that heading in Schedule E and any replacements thereof.
“LME” means the London Metal Exchange or any successor exchange agreed between Purchaser and Seller.
“LME Warrants” means, in respect of Refined Copper, a bearer document of title recognized by the LME and representing 25 tonnes (+/- 2%) of Refined Copper held in a LME approved warehouse located in a Permitted Warehouse Location.
“Losses” means all claims, demands, proceedings, fines, losses, damages, liabilities, obligations, deficiencies, costs and expenses (including all legal and other professional fees and disbursements, interest, penalties, judgment and amounts paid in settlement of any demand, action, suit, proceeding, assessment, judgment or settlement or compromise), including any Taxes payable in respect thereof, including the value or change in value of past, current or future required or expected deliveries of copper hereunder (including any decline in value of any copper that is not delivered when due), in connection with or in respect of any breach or default by the other Party.
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“MAC” means Metals Acquisition Corp, a Cayman Islands exempted company.
“MAC Australia” means Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758), a company existing under the laws of Australia and its successors and permitted assigns.
“MAL” means Metals Acquisition Limited, a company incorporated under the laws of Jersey.
“Material Contracts” means, collectively, (i) each agreement set forth in Schedule E and any replacements thereof, (ii) any contract or agreement entered into by a Seller Group Entity and that is material to the construction, development, operation or ownership of the Mine or that would have an Adverse Impact if it was terminated or suspended or any party thereto failed to perform its obligations thereunder; and (iii) any document entered into for the purposes of varying, novating, supplementing, extending, replacing or restating any of the agreements referred to in above paragraphs (i) or (ii).
“Merger” means the merger of MAC with and into MAL pursuant to Part 18B of the Companies (Jersey) Law 1991, as amended, and Part XVI of Companies Act (As Revised) of the Cayman Islands pursuant to which MAL continues as the surviving company and all undertaking, property and liabilities of MAC vest in MAL.
“ME Supply Contract” means the mobile equipment supply contract (supply of capital equipment and associated services) dated 30 June 2020 between Mount Isa Mines Limited ACN 009 661 447 (acting in its personal capacity and as agent for the Project Owner and Ernest Henry Mining Pty Ltd ACN 008 495 574) and Sandvik Mining and Construction Australia Pty Ltd ACN 003 771 382
“Mezzanine Debt” means the subordinated term loan facility in the aggregate principal amount of US$135,000,000 pursuant to the Mezzanine Debt Facility Agreement.
“Mezzanine Debt Facility Agreement” means the loan note subscription agreement dated March 10, 2023 between MAL, MAC Australia as borrower, the Seller as guarantors, Sprott Private Resource Lending II (Collector-2), LP, as mandated lead arranger and bookrunner and original lender, and Sprott Resource Lending Corp. as agent and security trustee.
“Mine” means the CSA Copper Mine located in Cobar Basin in New South Wales, Australia, which is comprised of and covers, inter alia, the Stream Properties and the other Project Assets.
“Mine Data” has the meaning set out in Schedule C.
“Mine Plan” means, at any time, the comprehensive operating plan as described in the Initial Technical Report and including the primary life of mine financial assumptions as detailed in the Base Case Financial Model, as each may be amended or updated at such time in accordance with this Agreement.
“Mineral Facilities” means all buildings, improvements, structures, systems, fixtures, plant, machinery, tools and other personal property at any time used or intended for use in connection with or incidental to the exploration, mining, storage, transporting and processing of Minerals, and all facilities and infrastructure associated with the Project (including all Mineral Processing Facilities).
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“Mineral Processing Facilities” means any crusher, mill, ore concentrator, processing plant, smelter, refinery or other processing facility owned or operated by any Seller Group Entity located on the Stream Properties and at which Minerals are processed.
“Minerals” means any and all ore and marketable metal bearing material or product in whatever form or state (including Produced Copper) that is mined, produced, extracted or otherwise recovered or derived from the Stream Properties, including any such material or product derived from any processing or reprocessing of any tailings, stockpiles, waste rock or other waste products originally derived from the Stream Properties, and including ore and any other products requiring further milling, processing, smelting, refining or other beneficiation of Minerals, including Saleable Products.
“Minimum Lot Size” has the meaning set out in Section 2.7.
“Mining Properties” means all right, title and interest both present and future in, under or derived from:
| (a) | the Tenements, the Freehold Properties, the Project Leases and all other documentation and agreements under which a Seller PSA Entity or any Affiliate thereof derives the right to conduct mining or exploration for Minerals at the Mine or otherwise forming part of or used in connection with the Project, including the Stream Properties; |
| (b) | the Project Area, including any title to or interest in land in a Project Area now or at a later time held by any Seller PSA Entity or any Affiliate thereof; |
| (c) | all Authorisations in relation to the Project; and |
| (d) | all Mineral Facilities; |
whether any of the foregoing in above paragraphs (a), (b), (c) and (d) is acquired or obtained before or after the date of this Agreement.
“Mining Rights” means any mining claims, mining leases, mineral claims, mining concessions, mineral concessions, exploration permits or licenses, mining licenses, forms of mineral tenure or other rights to Minerals or to access and work upon lands, such as ownership and ancillary rights, surface rights, leasing agreements, lands temporal occupation agreements or otherwise, for the purpose of exploring, exploiting or benefiting Minerals, under the terms of Applicable Laws, whether contractual, statutory or otherwise, or any interest therein whether now owned or hereafter acquired, including the Principal Tenements. “Mining Rights” includes any amendments, relocations, adjustments, resurvey, additional locations, consolidation, derived rights or conversions of, or any renewal, replacement, amendment or other modification or extensions of any of the foregoing.
“Monthly Report” means a written report, in relation to any calendar month, in substantially the form attached as Schedule H detailing:
| (a) | the tonnages and head grades of ore mined and tonnages of waste mined and tonnages and head grades of both the ore mined and stockpiled, from the Stream Properties during such calendar month; |
| (b) | the tonnages and grades of ore processed from the Stream Properties at the Mineral Processing Facilities during such calendar month; |
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| (c) | with respect to any Mineral Processing Facilities, the types of Saleable Products produced, tonnages, weights and concentrate grades during such calendar month and the resulting recoveries, including the metallurgical balances for gravity circuit (if applicable), flotation of concentrate, CN leaching of concentrate or tailings, or any other process that results in Produced Copper; |
| (d) | the number of tonnes of copper contained in the Saleable Product produced during such calendar month; |
| (e) | the weight and grade of any Saleable Product delivered or shipped offsite during such calendar month; |
| (f) | the weight and grade of any Saleable Product contained in any Offtaker Delivery during such calendar month; |
| (g) | the number of tonnes of copper contained in each Offtaker Delivery in respect of which an Offtaker Payment was received during that calendar month, prior to any Offtaker Charges or payable rates; |
| (h) | the tonnes of Payable Copper and Reference Copper for that calendar month by Offtaker Delivery; |
| (i) | a reconciliation between (g) and (h), including details regarding payable rates and provisional percentages; |
| (j) | end of month stockpile of Saleable Product (tonnage, moisture content and grade) not yet subject to an Offtaker Delivery; |
| (k) | inventory of Saleable Product in process whether in solids or solution as well as the measured process plan stream copper grades and reported copper grades of process plant streams to the extent used in determining the metallurgical plant balance; |
| (l) | inventory for Saleable Product which has been delivered to an Offtaker, but for which an Offtaker Payment has not yet been made (or if made, no Refined Copper in respect thereof have yet been delivered to Purchaser); |
| (m) | a statement listing all invoices relating to Offtaker Payments, indicating whether provisional or final, and including (A) invoice number, (B) lot designation if applicable, (C) weights, (D) copper grades of any product, and (E) Payable Copper and Reference Copper, received during such calendar month; |
| (n) | the most recent update to the forecast of production of copper or Payable Copper and Reference Copper to the extent such forecast has been updated by any Seller Group Entity from the forecast most recently provided to Purchaser, and the related assumptions as set out in Section 5.1(2)(c) to the extent also updated; |
| (o) | details of the Offtake Agreements, specifying the type of product and annual quantity being sold to each Offtaker; such information to be provided whenever any new Offtake Agreement is entered into or whenever changes to any existing Offtake Agreement are made; |
| (p) | the type as well as expected weight, expected copper grade of any product scheduled to be shipped in the following month along with the expected Offtaker Payment date; and |
| (q) | such other information in respect of copper as may be reasonably requested by Purchaser. |
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“Native Title Claim” means any application, claim or entitlement, (whether arising by statute or otherwise) of any indigenous Person or traditional owner to any estate or interest in land by which that Person or owner is applying for or claiming or has that estate or interest in land because that Person is indigenous, is a traditional owner or otherwise has a relationship with the land including any application, claim, right or entitlement under the Native Title Act 1993 (Cth) or any analogous legislation.
“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, or any successor instrument, rule or policy.
“OFAC” means The Office of Foreign Assets Control of the US Department of the Treasury.
“Offtake Agreement” means the Glencore Offtake Agreement and any other agreement or contract entered into by a Seller Group Entity with an Offtaker, or pursuant to Applicable Law, or other arrangement or requirement, that relates in any way to: (i) the sale of Minerals to an Offtaker; (ii) the delivery of the entitlement to, or the benefit of, Minerals to an Offtaker; or (iii) the smelting, refining or other beneficiation of Minerals by an Offtaker for the benefit of a Seller Group Entity.
“Offtake Sales Documents” means such documents as are prepared or produced in connection with sale or transfer of Minerals to an Offtaker, including the provisional and final settlement sheets, provisional and final invoices, metals return statements, credit notes, bills of lading, and any and all certificates and other documentation prepared or produced for or by the relevant Offtaker, including certificates for final shipped moisture content and final analyses and assays evidencing the amount of Minerals, including the quantity of copper and any other metal contained therein, delivered to the Offtaker.
“Offtaker” means (i) any Person that is not a Seller Group Entity that purchases Minerals from a Seller Group Entity or is the recipient of the entitlement to, or benefit of, Minerals from a Seller Group Entity (including where a Governmental Authority levies a Tax payable by way of delivery of Minerals or otherwise obtains Minerals from a Seller Group Entity); or (ii) any Person that takes delivery of Minerals for the purpose of smelting, refining or other beneficiation of such Minerals for the benefit of a Seller Group Entity.
“Offtaker Charges” means any refining charges, treatment charges, penalties, insurance charges, transportation charges, settlement charges, weight franchise charges, financing charges or price participation charges, royalties or royalty type payments, or other charges, penalties or deductions that may be charged or levied by an Offtaker, regardless of whether such charges, penalties or deductions are expressed as a specific metal deduction, as a recovery rate, a percentage or otherwise.
“Offtaker Delivery” means the delivery of Minerals to an Offtaker or the transfer of the entitlement to or benefit of Minerals to an Offtaker, which for greater certainty shall not include any deliveries of Minerals to Persons subsequent to the first Offtaker acquiring such Minerals.
“Offtaker Payment” means (i) with respect to (A) Minerals purchased by an Offtaker from a Seller Group Entity, or (B) Minerals the entitlement to, or benefit of which, is received by an Offtaker from a Seller Group Entity, the receipt from and after the Closing Date by a Seller Group Entity of payment or other consideration (including any LME Warrants) from the Offtaker in respect of any Minerals, or if no such consideration is applicable, the delivery of the Minerals (or ownership of the Minerals) to such Offtaker (or to the direction of such Offtaker); and (ii) with respect to Minerals refined, smelted or otherwise beneficiated by an Offtaker on behalf of a Seller Group Entity, the receipt from and after the Closing Date by a Seller Group Entity of any Refined Copper in accordance with the applicable Offtake Agreement.
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"Option 1 Tail Stream Percentage” means 1.5%.
"Option 1 Threshold Stream Percentage” means 3.25%.
"Option 1 Threshold Quantity” means 23,900 tonnes of Refined Copper.
"Option 2 Tail Stream Percentage” means 1.875%.
"Option 2 Threshold Stream Percentage” means 4.0625%.
"Option 2 Threshold Quantity” means 28,450 tonnes of Refined Copper.
“Original Financial Statements” means:
| (a) | in relation to the Project Owner, its audited financial statements for the financial years ended 31 December 2020, 31 December 2021 and 31 December 2022; and |
| (b) | in relation to MAC, its audited financial statements for its financial years ended 31 December 2020, 31 December 2021 and 31 December 2022. |
"Original Threshold Quantity” means 33,000 tonnes of Refined Copper.
“Other Minerals” means ores or other minerals mined, produced, extracted or otherwise recovered from properties that are not one of or do not constitute part of the Stream Properties, whether such properties are owned by Seller Group Entities or otherwise.
“Parties” means the parties to this Agreement.
“Payable Copper” means 96.2% of the Produced Copper (prior to any deduction in respect of any Offtaker Charges) contained in any Offtaker Delivery.
"Perfection Requirements” means the making or procuring of the appropriate perfection, stamping, endorsements, notarisations, notifications, Authorisations and registration requirements of or with respect to the Transaction Security Documents and or the security interest created under them.
"Permitted Disposal” means any sale, lease, licence, bailment, transfer or other disposal (a “Disposal”) which is on arm’s length terms:
| (a) | of Minerals by the Project Owner to an Offtaker pursuant to an Offtake Agreement; |
| (b) | of assets (other than Equity Securities or Mining Properties) by the Project Owner in exchange for other assets comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash); |
| (c) | of Immaterial Mining Properties by the Project Owner; |
| (d) | of Cash Equivalent Investments for cash or in exchange for other Cash Equivalent Investments; |
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| (e) | of equipment by the Project Owner, in connection with, or for the purpose of, such assets then continuing to be used by the Project Owner under a lease back or hire purchase contract, so long as the net book value (when aggregated with the net book value of all such Disposals) does not exceed US$30,000,000 (or its equivalent) in total; |
| (f) | with Purchaser’s prior written consent, |
so long as, in each case, no Event of Default is subsisting on the date of such Disposal or would occur as a result of such disposal, and such Disposal would not have, or could not reasonable be expected to have, an Adverse Effect.
“Permitted Encumbrances” means:
| (a) | any lien arising by operation of law and in the ordinary course of trading so long as the debt it secures is paid when due or contested in good faith and appropriately provisioned; |
| (b) | any reservations, or exceptions contained in the original grants of land or by applicable statute or the terms of any lease in respect of any Mining Properties, or comprising the Mining Properties which do not materially detract from the value of, or materially impair the use of, the Mining Properties for the purpose of conducting and carrying out mining operations thereon; |
| (c) | minor discrepancies in the legal description or acreage of or associated with the Mining Properties or any adjoining properties which would be disclosed in an up to date survey and any pre-existing registered easements and pre-existing registered restrictions or pre-existing covenants that run with the land, in either case which do not materially detract from the value of, or materially impair the use of, the Mining Properties for the purpose of conducting and carrying out mining operations thereon; |
| (d) | Encumbrances on cash and Cash Equivalent Investments granted by a Seller PSA Entity to a Governmental Authority to secure performance of statutory obligations or regulatory requirements (including reclamation obligations) under Applicable Law; |
| (e) | rights of way for, or reservations of rights of others for, sewers, water lines, gas lines, electric lines, telegraph and telephone lines, and other similar utilities, or zoning by-laws, ordinances, surface access rights or other restrictions as to the use of the mining licenses comprising the Project Assets, which do not in the aggregate materially detract from the use of such mining licenses for the purpose of conducting and carrying out mining operations thereon; |
| (f) | any rights of expropriation, access or user or other similar such rights conferred or vested on public authorities, provided they are not exercised against any Seller PSA Entity or its assets, or if exercised, do not materially detract from the value; |
| (g) | any Encumbrance arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to the Project Owner in the ordinary course of trading and on the supplier's standard or usual terms (or on terms more favourable to the Project Owner) so long as any such Encumbrance is limited to the specific asset that has been acquired, the debt it secures is paid when due or contested in good faith and sufficient reserves of liquid assets have been set aside to pay the debt if the contest is unsuccessful; |
| (h) | any Encumbrance arising as a consequence of any leases or hire purchase contracts (constituting Financial Indebtedness under paragraph (d) of that definition) of vehicles, plant, equipment or computers permitted under paragraph (k) of the definition of Permitted Indebtedness and only over the asset being financed, or otherwise any PPS Lease (as defined in the PPSA) provided for by a transaction which does not secure payment or performance of an obligation; |
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| (i) | Encumbrances on cash and Cash Equivalent Investments granted by the Project Owner to a public utility or any municipality or governmental or other public authority when required by such utility or municipality or other authority in connection with the operations of the Project Owner, all in the ordinary course of its business; |
| (j) | any netting or set-off arrangement entered into by any Seller PSA Entity in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of Seller PSA Entities and credit balances of Seller Group Entities; |
| (k) | any payment or close out netting or set-off arrangement under any transactional banking facilities or any Derivative Transaction or foreign exchange transaction entered into by a Seller PSA Entity which constitutes Permitted Indebtedness, excluding any Encumbrance under a credit support arrangement; |
| (l) | any contractual right of set-off, other than in respect of Financial Indebtedness, pursuant to a contract entered into in the ordinary course of business; |
| (m) | any Encumbrance already subsisting but not legally possible or reasonably feasible to be discharged and listed as ‘Existing Security’ on Schedule M, except to the extent the principal amount secured by it exceeds the amount listed with respect to that Encumbrance in Schedule M; |
| (n) | any Encumbrance listed as ‘Existing Security’ on Schedule M, including any replacement Encumbrance upon any successive refinancing thereof, so long as the Financial Indebtedness secured thereby is Permitted Indebtedness; |
| (o) | the Glencore Royalty; |
| (p) | any Encumbrance on Project Assets granted to a provider of Permitted Secured Debt, provided that any such provider shall have entered into the Intercreditor Deed or other intercreditor agreement in form and substance satisfactory to Purchaser; and |
| (q) | any Encumbrance created with Purchaser’s prior written consent. |
“Permitted Indebtedness” means any of the following Financial Indebtedness:
| (a) | Permitted Secured Debt; |
| (b) | Financial Indebtedness incurred under the Glencore Royalty Deed and the Material Contracts, including in respect of the SSA, any future or contingent consideration payable under it; |
| (c) | equipment financing incurred by Project Owner provided that the provider of such equipment financing is limited in recourse to the equipment financed or supplied by such provider and all such Financial Indebtedness owed to any such provider is secured only by charges on the underlying equipment; |
| (d) | Financial Indebtedness incurred by Project Owner in respect of surety or completion bonds, standby letters of credit or letters of guarantee securing mine closure, asset retirement and environmental reclamation obligations of Project Owner to the extent required by Applicable Laws or Governmental Authority; |
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| (e) | any unsecured Financial Indebtedness under any agreement entered into by the Project Owner in the ordinary course of its business for the acquisition of any asset or service where payment for the asset or service is deferred for a period of not more than 90 days; |
| (f) | arising under a foreign exchange transaction entered into by the Project Owner or MAC Australia for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade, but not a foreign exchange transaction for investment or speculative purposes; |
| (g) | Subordinated Intercompany Debt; |
| (h) | Financial Indebtedness of Project Owner under working capital facilities with commercial banks or other customary capital providers for the mining sector (which shall not include any hedge or distressed debt funds) in an aggregate amount not to exceed US$25 million (or its equivalent); |
| (i) | indebtedness of the Seller PSA Entities related to a corporate credit card facility, provided that the aggregate amount of all such Indebtedness does not exceed US$250,000 (or its equivalent) at any time; |
| (j) | Financial Indebtedness arising under Approved Hedging; |
| (k) | under leases and hire purchase contracts entered into by the Project Owner constituting Financial Indebtedness under paragraph (d) of that definition of vehicles, plant, equipment or computers, so long as the aggregate capital value of all such items so leased under outstanding leases by the Project Owner does not exceed US$30,000,000 (or its equivalent in any other currency or currencies) at any time; and |
| (l) | any other Financial Indebtedness incurred with Purchaser’s prior written consent, |
so long as, in each case, no Event of Default is subsisting on the date such Financial Indebtedness is incurred or would occur as a result of the incurrence of such Financial Indebtedness.
"Permitted Loan” means:
| (a) | any loans, refundable deposits, advance payments or trade credit extended by the Project Owner to its customers on normal commercial terms and in the ordinary course of its trading activities; and |
| (b) | any loan made with Purchaser’s prior written consent. |
“Permitted Secured Debt” means any of the following Financial Indebtedness or other obligations which in each case is secured by Encumbrances against some or all of the assets of a Seller PSA Entity:
| (a) | Financial Indebtedness of up to US$230 million pursuant to the Senior Project Acquisition Facility secured by Encumbrances on the Collateral and any refinancing, replacement or renewal of such Financial Indebtedness provided that each condition in clause 6.2 of the Intercreditor Deed is satisfied (or waived by Purchaser in its sole discretion); |
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| (b) | so long as it is in accordance with the Approved Hedging Programme – Project Chariot 2023 provided to Purchaser prior to the Closing Date, as amended from time to time in accordance with the Senior Facility Agreement, Financial Indebtedness arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade or under a Derivative Transaction in respect of copper production of the Project Owner for the first three years following the Closing Date, but not a foreign exchange transaction or any other Derivative Transaction for investment or speculative purposes, in each case to the extent provided by some or all of the lenders under the Senior Project Acquisition Facility and secured by Encumbrances on the Collateral and any replacement of such hedging provided by lenders under the Senior Project Acquisition Facility or with lenders of any Financial Indebtedness refinancing, replacing or renewing the Senior Project Acquisition Facility in accordance with the above paragraph (a) (the, “Approved Hedging”); |
| (c) | Financial Indebtedness of up to US$135 million pursuant to the Mezzanine Debt secured by Encumbrances on the Collateral and any refinancing, replacement or renewal of such Financial Indebtedness provided that each condition in clause 6.3 of the Intercreditor Deed is satisfied (or waived by Purchaser in its sole discretion); |
| (d) | Financial Indebtedness of up to A$40 million secured only by Encumbrances on the Collateral , which is used solely for the purpose of third party letter of credit financing where the letters of credit issued thereunder are used to provide performance guarantees required by Applicable Laws or the Government of New South Wales securing mine closure, asset retirement and environmental obligations of the Project Owner in connection with the Mine and other financial guarantees in relation to the Acquisition Transaction provided by lenders under the Senior Project Acquisition Facility or with lenders of any Financial Indebtedness refinancing, replacing or renewing the Senior Project Acquisition Facility in accordance with the above paragraph (a); and |
| (e) | the Silver Stream Obligations and the Copper Stream Obligations. |
“Permitted Transaction” means:
| (a) | a dual listing by Seller on the Australian Securities Exchange and the issue of any Equity Securities by Seller in connection with that listing or any other equity raise; |
| (b) | the raising of any equity in connection with the Acquisition Transaction and any restructure, redemption or other matters undertaken in connection with the Acquisition Transaction associated with Seller’s listing on the New York Stock Exchange (NYSE) subject to any such restructure and redemptions having been completed before the Closing Date; or |
| (c) | the Merger. |
“Permitted Warehouse Location” means Rotterdam, Netherlands and such other locations as Purchaser and Seller may agree in their sole discretion.
“Person” means and includes a Party, individuals, corporations, bodies corporate, limited or general partnerships, joint stock companies, limited liability corporations, joint ventures, associations, companies, trusts, banks, trust companies, Governmental Authority or any other type of organization, whether or not a legal entity.
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“PIPE Subscription Agreement” means the agreement to be entered into on or around the Signing Date by Purchaser and Seller whereby Purchaser has agreed to subscribe for the Subscription Amount worth of common stock in Seller at the same price per share as the new equity raised by Seller to complete the Acquisition Transaction, as referred to in paragraph (b) of the definition of Permitted Transaction.
"PPSA" means the Personal Property Securities Act 2009 (Cth).
“PPX Supply Contract” means the supply contract (supply of PPX parts, GET, drilling consumables, services and other items) dated on or around 1 October 2020 between Mount Isa Mines Limited ACN 009 661 447 (in its personal capacity and acting as agent for the Project Owner and Ernest Henry Mining Pty Ltd ACN 008 495 574) and Sandvik Mining and Construction Australia Pty Ltd ACN 003 771 382
“Principal Tenements” means, collectively, (i) Consolidated Mining Lease No. 5 (CML5), Mining Purpose Lease 1093 (MPL 1093) and Mining Purpose Lease 1094 (MPL 1094) and (ii) Exploration Lease 5693 (EL 5693), Exploration Lease 5983 (EL 5983), Exploration Lease 6907 (EL 6907), Exploration Lease 6223 (EL 6223) and Exploration Lease (Application) 6565 (and any resulting tenement arising from it).
“Proceeds Account” means, collectively, the accounts held with the Initial Account Bank and styled “AUD Proceeds Account” and “USD Proceeds Account” and any replacement bank accounts with a replacement account bank that is an Acceptable Bank and acceptable to Purchaser and agreed between MAC Australia and Purchaser to be a Proceeds Account.
“Produced Copper” means any and all copper in whatever form or state that is mined, produced, extracted or otherwise recovered from the Stream Properties, including:
| (a) | any copper derived from any processing or reprocessing of any tailings, waste rock or other waste products originally derived from the Stream Properties; and |
| (b) | copper contained in any ore or other products resulting from the further milling, processing or other beneficiation of Minerals originally mined, produced, extracted or otherwise recovered or derived from the Stream Properties, including Saleable Products. |
“Project” means:
| (a) | the management, operation, maintenance, repair and expansion of the Mine; and |
| (b) | the extraction, production, recovery, sale, transportation, storage, processing and delivery of copper, silver and by product metals in concentrate. |
“Project Area” means the area the subject of the Tenements, the Freehold Properties and the Project Leases.
“Project Assets” means all the right, title and interest both present and future of the Seller PSA Entities which is attributable to the Project and includes all the right, title and interest both present and future of the Seller PSA Entities in, to, under or derived from:
| (a) | the Mining Properties; |
| (b) | the Minerals; |
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| (c) | the mining, processing, development, production, maintenance, administration, water, electrical and conveyor facilities (including the Mineral Processing Facilities), railway infrastructure and rolling stock, storage facilities, stockpiling facilities, shipping infrastructure, utilities, and related ancillary infrastructure, other buildings, structures, improvements, fixtures and other real and personal property, including equipment, re-commissioned, constructed, operated or otherwise used by or on behalf of any Seller Group Entity to extract, beneficiate, market, transport and sell Minerals derived from the Mining Properties or to develop, operate or administer the Mining Properties, whether or not located within the physical boundaries of the Mining Properties; |
| (d) | all Authorisations or other rights (including surface, access and water rights), lease, licence, easement, right of way, privileges, concessions or franchises owned, controlled, leased, operated or held by or on behalf of any Seller Group Entity at any time in relation to the Mining Properties; |
| (e) | the Material Contracts and any other contract, agreement which related to the development, operation or maintenance of the Mining Properties, or to the mining production, transportation, storage, treatment, processing or marketing of Minerals; |
| (f) | any other present and after-acquired real or personal property used or acquired for use by any Seller Group Entity in connection with the Mining Properties; and |
| (g) | all exploration and mining information, documents, maps, reports, records, studies and other written data, including all data stored on magnetic tapes, disks or diskettes or any other computer storage media, relating to geological, geochemical and geophysical work, feasibility studies and other operations conducted with respect to the Project. |
“Project Leases” means each perpetual land lease held by the Project Owner listed in Part III of Schedule A and any additional or replacement lease used or to be used in connection with the Project.
“Project Owner” means Cobar Management Pty Limited, a company existing under the laws of New South Wales, or any transferee of the Stream Properties as permitted pursuant to this Agreement, and their respective successors and permitted assigns, and “Project Owner” means any of them.
“Project Owner Guarantee” has the meaning set out in Section 7.1(3).
“Project Owner Security Agreements” has the meaning set out in Section 7.1(4).
“Project Owner Whitewash Documentation” has the meaning set out in Schedule L.
“Purchaser” means Osisko Bermuda Limited, an exempted company existing under the laws of Bermuda, and its successors and assigns.
"Quarter End Date” means each of 31 March, 30 June, 30 September and 31 December or if any such date is not a Business Day, the preceding Business Day.
“Rate of Exchange” has the meaning set out in Section 10.6.
“Receiving Party” has the meaning set out in Section 5.6(1).
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“Refined Copper” means marketable metal bearing material in the form of copper that is refined by an accredited refiner to standards conforming to the specifications for good delivery of the LME.
“Reference Copper” means Payable Copper multiplied by the Copper Stream Percentage.
“Related Party Transaction” means any transaction or agreement (whether by written agreement or otherwise) between a Seller PSA Entity and one or more Seller Group Entities, including any Financial Indebtedness, service agreement or management agreement.
“Relevant Breach” has the meaning set out in Section 6.18(3).
“Relevant Jurisdictions” has the meaning set out in Schedule K.
“Reserve Tail Ratio” means the ratio expressed as a percentage of:
| (a) | the projected remaining proven and probable copper Reserves as from the latest maturity date of any and all Permitted Secured Debt referred to in paragraph (a) and (c) of the definition thereof to the forecast end of the mine life for the Project; and |
| (b) | the projected remaining proven and probable copper Reserves as from the Closing Date to the forecast end of the mine life of the Project, |
as included in the relevant updated Reserves Statement (taking into account the projected future production set out in the most recently delivered updated Base Case Financial Model).
“Reserves” means proven and probable reserves as defined and incorporated under NI 43-101 or JORC Code, as applicable.
“Reserves Statement” means a statement of Reserves in relation to the Project.
“Resources” means measured, indicated and inferred resources as defined and incorporated under NI 43-101 or JORC Code, as applicable.
“Resources Statement” means a statement of Resources in relation to the Project.
“Saleable Products” means any concentrates, precipitates, doré, bullion, carbon fines, slag or other product or material that contains marketable metals or in respect of which an Offtaker Payment is expected.
“Sanctioned Person” means any Person that (i) is, or is owned or controlled, either directly or indirectly, by, or is otherwise acting on behalf of a Person that is the subject of any Sanctions; or (ii) part of, controlled by, or owned by the government, or any agency or instrumentality of the government, of a Comprehensively Sanctioned Country or Territory.
“Sanctions” means any trade, economic or financial sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty's Treasury, the Australian Department of Foreign Affairs and Trade, the Jersey Minister for External Relations, the New Zealand Ministry of Foreign Affairs and Trade, the Hong Kong Commerce, Industry and Tourism Branch of the Commerce and Economic Development Bureau, the Monetary Authority of Singapore, the Ministry of Finance Japan, the Governor in Council (Canada), Global Affairs Canada or Public Safety Canada.
"Second Buy-Down Amount” means US$20,000,000.
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“Second Threshold Stream” means the Second Threshold Stream Percentage, as amended pursuant to Section 2.9, if applicable.
“Second Threshold Stream Percentage” has the meaning set out in Section 2.8(1).
“Security” means the charges and security interests granted in favour of Purchaser pursuant to the Copper Stream Security Documents, including any "security interest" as defined in sections 12(1) or (2) of the PPSA.
“Security Agreements” means, collectively, the Holdco Security Agreements, the Seller Security Agreements and the Project Owner Security Agreements.
“Seller” means (i) prior to completion of the Merger, collectively, MAL and MAC, and (ii) following completion of the Merger, MAL as the surviving company and its successors and permitted assigns.
“Seller Group Entities” means the Seller PSA Entities and each of their respective Affiliates.
“Seller PSA Entities” means prior to the Whitewash Completion Date, Seller and MAC Australia, and immediately following the Whitewash Completion Date, Seller, MAC Australia and the Project Owner.
“Seller PSA Entities Whitewash Documentation” has the meaning set out in Schedule L.
“Seller Security Agreements” has the meaning set out in Section 7.1(2).
“Senior Facility Agreement” means the syndicated facility agreement dated February 28, 2023 between the Seller, MAC Australia, Citibank N.A., Sydney Branch and Bank of Montreal as mandated lead arrangers and bookrunners, Citibank N.A., Sydney Branch as initial account bank, the lenders party thereto and Citisecurities Limited as agent.
“Senior Project Acquisition Facility” means the senior secured credit facility consisting of up to a US$205 million term loan facility and a US$25 million revolving working capital facility made available to MAC Australia pursuant to the Senior Facility Agreement, the proceeds of which will be used to acquire the Project Owner pursuant to the Acquisition Transaction.
"Senior Security Trust Deed” means the deed entitled “Security Trust Deed” to be dated before the Closing Date and made between, among others, the Seller PSA Entities and the Senior Security Trustee.
“Senior Security Trustee” has the meaning given to it in the Intercreditor Deed.
“Shiploader Agreement” means the Newcastle shiploader services agreement dated on or about January 2014 as varied on 30 August 2021 between the Project Owner and Aurizon Port Services Pty Ltd ACN 103 570 181 (formerly Conports Pty Ltd)
“Signing Date” has the meaning set out in the preamble to this Agreement.
“Silver Purchase Agreement” means the silver purchase agreement dated as of the date hereof between Purchaser as purchaser, Seller as seller, MAC Australia as a seller psa entity and upon completion of the Whitewash Procedures, the Project Owner as a seller psa entity and project owner.
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“Silver Stream Documents” means, collectively, collectively, (i) the Silver Purchase Agreement, (ii) the guarantees granted by MAC Australia and upon completion of the Whitewash Procedures, the Project Owner of the Silver Stream Obligations; (iii) all general security deeds, mortgage terms deeds, mortgages and all other assignments, deeds of trust, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants to Purchaser mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the Silver Stream Obligations, (iv) the Intercreditor Deed, (v) the Subordination Deed, (vi) the accession agreement between Purchaser and the Project Owner, (vii) each other agreement, document, instrument or certificate delivered for the benefit of Purchaser pursuant to or otherwise in connection with any of foregoing agreements referred to in above paragraphs (i) through (vi) inclusive, and (viii) and any other agreement designated from time to time by Purchaser and Seller as a “Silver Stream Document” for purposes of the guarantees and security referred to in above paragraphs (ii) and (iii).
“Silver Stream Obligations” means all indebtedness, liabilities and other obligations, present or future, direct or indirect, absolute or contingent, matured or unmatured, at any time or from time to time due or accruing due and owing by or otherwise payable or to be performed by any Seller Group Entity to Purchaser under, in connection with or pursuant to the Silver Stream Documents.
“SIJL” means the Security Interests (Jersey) Law 2012.
“SIR” means the security interest register maintained under Part 8 of the SIJL.
“SSA” means the CMPL share sale agreement dated March 17, 2022 between Seller, MAC Australia and Glencore Operations Australia Pty Limited in respect of the acquisition of 100% of the issued share capital in the Project Owner by MAC Australia, as amended by the Deed of Amendment, Consent and Covenant dated as of November 22, 2022.
“Stream NPV” has the meaning set out in Section 9.3(4).
“Stream Properties” means:
| (a) | the real property, Mining Rights, tenements, concessions and other similar interests listed or described in Part I of Schedule A or otherwise forming part of or used in connection with the Project Assets and including, for the avoidance of doubt, the Principal Tenements; |
| (b) | whether created privately or through the actions of any Governmental Authority, any right, title or interest in any real property, mining right, tenement, concession, contract and other similar interest held by a Seller Group Entity in, to, under or over all or any portion of the area covered by any of the foregoing detailed in (a); and |
| (c) | any present or future renewals, extensions, modifications, divisions, substitutions, amalgamations, successions, derivations, severances, conversions, demise to lease, renaming or variation of any of the foregoing detailed in (a) or (b); |
whether any of the foregoing is acquired or obtained before or after the date of this Agreement, and including all plants, buildings, structures, improvements, appurtenances and fixtures located thereon or thereunder.
“Subordinated Intercompany Debt” means unsecured loans made solely among one or more Seller PSA Entities, provided that such Financial Indebtedness shall be subordinated pursuant to a Subordination Deed.
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“Subordination Deed” means:
| (a) | a subordination deed between each subordinate lender, Purchaser and relevant debtor pursuant to which, among other things, each holder of Subordinated Intercompany Debt and other Seller Group Entity party to a Related Party Transaction with a Seller PSA Entity agrees as subordinate lender (i) to subordinate and postpone any indebtedness owing to it by a Seller PSA Entity to the Copper Stream Obligations, (ii) that no principal, interest or other amounts in respect of such indebtedness will be payable except to the extent it is permitted pursuant to Section 6.12, (iii) that no Encumbrances have been or will be taken by the holder of such indebtedness, (iv) that no remedies will be exercised by the holder of such indebtedness while any Copper Stream Obligations remain outstanding, and (v) that in connection with any Insolvency Event of Default, the holder of such indebtedness will not vote its claim in respect thereof in any manner that would prejudice Purchaser’s rights and remedies under this Agreement or any of the Copper Stream Security Documents, and otherwise in form and substance satisfactory to Purchaser; or |
| (b) | such other intercreditor or subordination agreement between, among others, each such subordinate lender and debtor and Purchaser in substantially the same scope as the subordination deed referred to in above paragraph (a) and otherwise in form and substance satisfactory to Purchaser, noting that this may result in the Intercreditor Deed (so long as it remains in effect) being the Subordination Deed. |
“Subordination of Claims Letter” means the letter dated prior to the Closing Date between, among others, MAC and Purchaser. in respect of claims under certain due diligence reports.
"Subscription Amount” means US$25,000,000 multiplied by the Elected Deposit Percentage.
“Subsidiary” means, with respect to any Person, any other Person which is, directly or indirectly, controlled by that Person.
“Sub-Minimum Amount” has the meaning set out in Section 2.7.
“Tail Stream” means the Tail Stream Percentage, as adjusted pursuant to Section 2.9, if applicable.
“Tail Stream Percentage” has the meaning set out in Section 2.8(1).
“Tax” or “Taxes” means all present or future taxes, rates, levies, royalties, imposts, duties, deductions, assessments, withholdings, dues, fees and other charges of any nature, including any interest, fines, penalties or other liabilities with respect thereto, imposed, levied, collected, withheld or assessed by any Governmental Authority (of any jurisdiction), and whether disputed or not, including sales or value-added taxes, goods and services taxes, stamp taxes and royalties.
“Tax Act” means the Income Tax Assessment Act 1936 (Cth).
“Tax Consolidated Group” means a Consolidated Group or an MEC Group as defined in the Income Tax Assessment Act 1997 (Cth).
“Tax Funding Agreement” means a tax funding agreement between the members of a Tax Consolidated Group which includes:
| (a) | reasonably appropriate arrangements for the funding of Tax payments by the "Head Company" (as defined in the Tax Act) having regard to the position of each member of the Tax Consolidated Group; |
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| (b) | an undertaking from each member of the Tax Consolidated Group to compensate each other member adequately for loss of Tax attributes (including Tax losses and Tax offsets) as a result of being a member of the Tax Consolidated Group; and |
| (c) | an undertaking from the "Head Company" (as defined in the Tax Act) to pay all group liabilities (as described in section 721 10 of the Tax Act) of the Consolidated Group before the members of the Tax Consolidated Group make any payments to the "Head Company" (as defined in the Tax Act) under the agreement. |
“Tax Sharing Agreement” means any agreement that satisfies the requirements of section 721 25 of the Tax Act for being a valid tax sharing agreement.
“Technical Report” means a technical report prepared in accordance with NI 43-101, the JORC Code or any other comparable foreign mineral disclosure code.
“Tenements” means:
| (a) | the Principal Tenements; |
| (b) | each tenement acquired by a Seller PSA Entity or any Affiliate thereof after the date of this Agreement which is related to the Project, or is in respect of an area adjacent to an existing Tenement; |
| (c) | each other tenement held by a Seller PSA Entity or any Affiliate thereof which is required for the Project in accordance with the then current Mine Plan; |
| (d) | each present or future interest from time to time held by or on behalf of an Seller PSA Entity or any Affiliate thereof in any present or future right, lease, licence, claim, permit or other authority which confers or may confer a right to prospect or explore for or mine any metals or minerals in any part of the area covered by the tenements referred to in paragraphs (a) to (c) of this definition; |
| (e) | each present or future renewal, replacement, extension, modification, amendment, substitution, conversion, amalgamation, relocation, adjustment, resurvey, additional location, consolidation, derived right or variation of any of the mineral rights described above (whether extending over the same or a greater or lesser area); |
| (f) | each present or future application for or an interest in any of the above which confers or which, when granted, will confer the same or similar rights in relation to the Project; and |
| (g) | each other tenement Purchaser and Seller agree in writing to be a Tenement or the agent under the Senior Project Acquisition Facility and MAC Australia agree in writing to be a Tenement. |
“Term SOFR” means the greater of (i) Term SOFR reference rate for a 3-month term published two Business Days prior to the first day of such term (the “Reference Business Day”), as such rate is published by the CME Group Benchmark Administration Limited (or a successor administrator of that reference rate), provided however that if such reference rate for such tenor has not been published on the Reference Business Day, then Term SOFR will be the Term SOFR reference rate for such tenor as published by CME Group Benchmark Administration Limited (or a successor administrator of that reference rate) on the first preceding Business Day for which such reference rate was published so long as such first preceding Business Day is not more than three Business Days prior to the Reference Business Day; and (ii) 2.00% per annum.
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“Threshold Quantity” means the delivery of the Original Threshold Quantity to Purchaser in aggregate (including all deliveries since the Closing Date) pursuant to this Agreement, as such amount may be adjusted pursuant to Section 2.9, if applicable.
“Time of Delivery” has the meaning set out in Section 2.3(2).
“Top Up Amount” has the meaning set out in Section 2.7(b).
“Total Net Debt” means, in relation to MAC Australia and its Subsidiaries, the sum of the following items (as stated on MAC Australia’s financial statements):
| (a) | the consolidated Financial Indebtedness of MAC Australia and its Subsidiaries: |
| (i) | including any liabilities related to: |
| (A) | the Mezzanine Debt; |
| (B) | the Senior Project Acquisition Facility; |
| (C) | the Copper Stream Obligations; and |
| (ii) | excluding any liabilities related to: |
| (A) | unrealized Derivative Transactions; |
| (B) | the Silver Stream Obligations; |
| (C) | the Glencore Royalty; |
| (D) | (1) so long as any Financial Indebtedness remains outstanding under Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof, any other subordinated loans referred to or permitted under the Senior Facility Agreement or Mezzanine Debt Facility Agreement, or (2), after indefeasible payment in full of Permitted Secured Debt referred to in paragraphs (a) and (c) of the definition thereof, Subordinated Intercompany Debt; |
less
| (b) | Available Cash and Cash Equivalent Investments. |
“Transaction Documents” means, collectively, the Acquisition Finance Documents and the Material Contracts.
“Transaction Security Documents” means, collectively, (i) the Copper Stream Security Documents, (ii) the agreements itemized in Part II of Schedule G, and (iii) all other assignments, deeds of trust, mortgages, control agreements, pledges and other security agreements pursuant to which a Seller Group Entity grants mortgages, charges, assignments by way of security, pledges and/or security interests in all or some of its present and after acquired property as security for the obligations under the Acquisition Finance Documents (other than the Copper Stream Obligations) or any Permitted Secured Debt refinancing, replacing or renewing the Senior Project Acquisition Facility or Mezzanine Debt and “Transaction Security Document” means any of the Transaction Security Documents.
“Transfer” means to sell, transfer, assign, convey, dispose or otherwise grant a right, title or interest (including a joint venture interest or an expropriation or other Transfer required or imposed by law or any Governmental Authority, whether voluntary or involuntary), or to abandon, surrender or otherwise relinquish a right, title or interest.
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“Trigger Event” means any Event of Default, or any event or circumstance which, with notice, the passage of time or both, would constitute an Event of Default or a material default under the terms of any Material Contract or agreement relating to any Financial Indebtedness.
“Tripartite Deed” means:
| (a) | each tripartite deed to be granted in respect of the following Material Contracts: |
| (i) | Glencore Offtake Agreement; |
| (ii) | the Transitional Services Agreement; |
| (iii) | the SSA; |
| (iv) | the Shiploader Agreement; |
| (v) | the Haulage Agreement; |
| (vi) | the Cobar Terminal Services Agreement; |
| (vii) | the Cooling Plant Agreement; |
| (viii) | the Ventilation Construction Agreement; |
| (b) | each Consent Deed; and |
| (c) | any consent letter or side agreement made or to be made between a Seller PSA Entity, Purchaser and a counterparty to a Material Contract in relation to that Material Contract in accordance with Section 6.8(3). |
“Transitional Services Agreement” means the transitional services agreement dated before Completion to be entered into between Seller, the Project Owner and a Glencore Group entity
“Uncredited Deposit” means, at any time, the Deposit, less the aggregate amount (if any) that has been credited against the Uncredited Deposit in accordance with Section 2.5; provided that in no event will the Uncredited Deposit be less than nil.
“Value” means, with respect to any Refined Copper delivered or deferred hereunder as of any calculation date, the applicable Copper Market Price on the calculation date multiplied by the applicable Reference Copper.
“Ventilation Construction Agreement” means the construction agreement (cooling turnkey solution)" dated 1 September 2021 between the Project Owner and Gordon Brothers Industries (Pty) Ltd ACN 160 126 456.
“Water License” means each water access licence listed in Part IV of Schedule A and any additional or replacement licence, permit or authorisation in respect of water used or to be used in connection with the Project.
“Whitewash Completion Date” means the date that is 30 days following the Closing Date or such later date agreed to by Purchaser in its sole discretion.
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“Whitewash Procedure” means the compliance procedure set out in section 260A of the Corporations Act to be undertaken by the Seller Group Entities in connection with the transactions contemplated by this Agreement and the Acquisition Transaction.
| Section 1.2 | Other Rules of Interpretation |
| (1) | Except as may be otherwise specifically provided in this Agreement and unless the context otherwise requires, the Parties agree that (i) the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this Agreement in its entirety and not to any particular provision hereof; (ii) references to an “Article”, “Section”, “clause” or “Schedule” followed by a number or letter refer to the specified Article, Section or clause of or Schedule to this Agreement; (iii) headings of Articles and Sections are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement (iv) where the word “including” or “includes” is used in this Agreement, it means “including without limitation” or “includes without limitation”; (v) all references to “tonnes” as a measure of mass in this Agreement are to dry metric tonnes; (vi) the language used in this Agreement is the language chosen by the Parties to express their mutual intent; (vii) unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders; (viii) a reference to a statute includes all regulations made pursuant to and rules promulgated under such statute and, unless otherwise specified, any reference to a statute or regulation includes the provisions of any statute or regulation which amends, supplements or supersedes any such statute or any such regulation from time to time; (ix) except where the context otherwise requires, all references to agreements (including this Agreement) and other contractual instruments shall be deemed to be a reference to such agreement or instrument as it may be amended, modified, restated, amended and restated, supplemented or extended from time to time; (x) time is of the essence in the performance of the Parties’ respective obligations under this Agreement; (xi) all statements or references to dollar amounts in this Agreement are to US dollars; (xii) any rule of construction to the effect that any ambiguity is to be resolved against the drafting Party shall not be applicable in the interpretation of this Agreement; (xiii) references to “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; and (xiv) certain amounts and figures are subject to adjustment in accordance with Clause 2A.2. |
| (2) | Where this Agreement specifies an amount in a given currency (the specified currency) “or its equivalent”, the “equivalent” is a reference to the amount of any other currency which, when converted into the specified currency utilising any publicly available spot rate of exchange selected by Purchaser (acting reasonably)) for the purchase of the specified currency with that other currency at or about 11:00am on the relevant date, is equal to the relevant amount in the specified currency. |
| (3) | In each Copper Stream Document, where it relates to a person (i) incorporated, (ii) established, (iii) constituted, (iv) formed, (v) which carries on, or has carried on, business, or (vi) that owns immovable property, in each case, in Jersey, a reference to: |
| (a) | a "composition, compromise, assignment or arrangement with any creditor", "winding-up", "administration", "insolvency", "insolvent", "bankruptcy”, "liquidation" or "dissolution" includes, without limitation, "bankruptcy" (as that term is interpreted pursuant to Article 8 of the Interpretation (Jersey) Law 1954), a compromise or arrangement of the type referred to in Article 125 of the Companies (Jersey) Law 1991, any procedure or process referred to in Part 21 of the Companies (Jersey) Law 1991, and any other similar proceedings affecting the rights of creditors generally under Jersey law, and shall be construed so as to include any equivalent or analogous proceedings; |
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| (b) | a "liquidator", "receiver", "administrative receiver", "administrator" or the like includes, without limitation, the Viscount of the Royal Court of Jersey, Autorisés, any provisional liquidator or liquidator appointed pursuant to Part 21 of the Companies (Jersey) Law 1991, or any other person performing the same function of each of the foregoing; |
| (c) | a “Security", "security interest", "security", "encumbrance" or the like includes, without limitation, any hypothèque, whether conventional, judicial or arising by operation of law and any security interest created pursuant to the Security Interests (Jersey) Law 1983 or Security Interests (Jersey) Law 2012 and any related legislation; and |
| (d) | any equivalent or analogous procedure or step being taken in connection with insolvency includes any corporate action, legal proceedings or other formal procedure or step being taken in connection with an application for a declaration of en désastre being made in respect of any such entity or any of its assets (or the making of such declaration) or the service of a statutory demand pursuant to Part 21 of the Companies (Jersey) Law 1991 in respect of such entity. |
| Section 1.3 | Days |
In this Agreement, a period of days shall be deemed to begin on the first day after the event which began the period and to end at 5:00 p.m. (Eastern Standard Time) on the last day of the period. If, however, the last day of the period does not fall on a Business Day, the period shall terminate at 5:00 p.m. (Eastern Standard Time) on the next Business Day.
| Section 1.4 | Joint and Several Liability |
All obligations and liabilities designated as being obligations or liabilities of Seller, including all representations and warranties, covenants and payment and delivery obligations of Seller, are joint and several obligations of MAL and MAC and each of MAL and MAC will, as a separate and independent obligation, perform each such obligation as primary obligor. Each of MAL and MAC irrevocably waives any claim, remedy or other right which it may now have or hereafter acquire against each other that arises from the existence, payment, performance or enforcement of a Seller’s obligation under the Copper Stream Documents, including any right of subrogation, reimbursement, exoneration, indemnification or any right to participate in any claim or remedy of Purchaser against any Seller, or their property and assets which Purchaser now has or may hereafter acquire, whether or not such claim, remedy or other right is reduced to judgment or is liquidated, unliquidated, fixed, contingent, matured, unmatured, deposited, undisputed, secured or unsecured and whether or not such claim, remedy or other right arises in equity or under contract, statute or common law.
| Section 1.5 | Merger |
It is the intention of the Parties that MAC will merge with and into MAL pursuant to the Merger prior to the Closing Date so that all undertaking, property and liabilities of MAC will vest in MAL as surviving company and that MAL will be the only Seller under this Agreement for all purposes.
| Section 1.6 | Schedules |
The following schedules are attached to and form part of this Agreement:
Schedule A - Mining Properties (With Map of Stream Properties)
Schedule B - Corporate Structure and Organization Chart
Schedule C - Representations and Warranties of the Seller PSA Entities
Schedule D - Representations and Warranties of Purchaser
Schedule E - Material Contracts
Schedule F - Stream NPV Procedures
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Schedule G – Transaction Security Documents
Schedule H - Monthly Report
Schedule I - Accession Agreement
Schedule J - Annual Compliance Certificate
Schedule K - Conditions Precedent
Schedule L - Conditions Subsequent
Schedule M – Existing Security
ARTICLE 2A
COPPER BACKSTOP
| Section 2A.1 | Copper Backstop Election |
| (1) | Purchaser hereby agrees to make available the Available Copper Deposit to Seller in accordance with the terms of this Agreement. |
| (2) | Seller may draw the Available Copper Deposit, in whole or in part, at its sole discretion, by giving Purchaser written unconditional and irrevocable notice (“Copper Backstop Notice”) of the percentage of the Available Copper Deposit it intends to draw for the purposes of this Agreement (the “Elected Deposit Percentage”). |
| (3) | Seller must issue a Copper Backstop Notice to Purchaser by no later than ten (10) Business Days prior to the Closing Date (“Backstop Date”). For the avoidance of doubt, if Seller does not issue a Copper Backstop Notice by the Backstop Date, the Elected Deposit percentage will be deemed to be nil. |
| (4) | Seller has no obligation to draw any portion of the Available Copper Deposit. In the event Seller elects not to draw on any portion of the Available Copper Deposit by the Backstop Date, either party may terminate this Agreement by notice given to the other party. |
| (5) | If this Agreement is terminated in accordance with clause 2A.1(4), then each Party is released from its obligations under this Agreement and none of the Parties will retain any rights against the other Parties in connection with this Agreement. |
| Section 2A.2 | Pro-Rata Adjustments to this Agreement |
For the purposes of this Agreement:
| (a) | any Copper Stream Percentage, including the First Stream Percentage, the Second Threshold Stream Percentage and Tail Stream Percentage; |
| (b) | any Buy-Down Stream Percentage; |
| (c) | any Buy-Down Threshold; |
| (d) | the Original Threshold Quantity; |
| (e) | the First Buy-Down Amount; and |
| (f) | the Second Buy-Down Amount, |
are subject to adjustment on a pro-rata basis in respect of the Elected Deposit Percentage, with the amount or figure comprising the relevant term above to be multiplied by the Elected Deposit Percentage in each instance.
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ARTICLE 2
PURCHASE AND SALE
| Section 2.1 | Purchase and Sale |
| (1) | Subject to and in accordance with the terms of this Agreement including Section 2.2 and Section 2.9, from and after the Closing Date, Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from Seller, an amount of Refined Copper equal to the Reference Copper, free and clear of all Encumbrances. For greater certainty, Reference Copper shall not be reduced for, and Purchaser shall not be responsible for any Offtaker Charges, all of which shall be for the account of Seller. |
| (2) | Seller shall not sell to Purchaser any Refined Copper that has been directly or indirectly purchased on a commodities exchange. Seller shall not sell and deliver to Purchaser the physical Refined Copper resulting from Produced Copper. |
| Section 2.2 | Delivery Obligations |
| (1) | Subject to Completion occurring, the Deposit having been paid, Purchaser having paid the Subscription Amount under the PIPE Subscription Agreement, Section 2.10, and prior to the Five Year Anniversary Date, on each Quarter End Date, Seller shall sell and deliver to Purchaser, Refined Copper in an aggregate amount equal to the Reference Copper in each Offtaker Delivery occurring in such calendar quarter and in respect of which an Offtaker Payment has been made in that calendar quarter (whether such Offtaker Payment relates to all or any portion of the Produced Copper contained in such Offtaker Delivery) provided that if in any calendar quarter, an Offtaker Payment consists of a provisional payment that may be adjusted upon final settlement of an Offtaker Delivery then: |
| (a) | Seller shall sell and deliver to Purchaser, on the Quarter End Date of each calendar quarter in which the provisional Offtaker Payment is made, Refined Copper in an amount equal to: (A) the percentage paid on a provisional basis, such percentage being equal to the total value of the payment or other consideration received by any Seller Group Entity in respect of the Produced Copper contained in such Offtaker Delivery divided by the total value of the Produced Copper determined on a provisional basis (determined in accordance with the applicable Offtake Agreement) as being contained in such Offtaker Delivery; multiplied by (B) the Reference Copper contained in such Offtaker Delivery; as supported by the documentation provided pursuant to Section 2.4 and in the applicable Monthly Report; and |
| (b) | on the Quarter End Date of each calendar quarter in which the final settlement of the Offtaker Delivery with the Offtaker is made, Seller shall sell and deliver to Purchaser Refined Copper in an amount, if positive, equal to the Reference Copper determined pursuant to the final settlement, less the number of tonnes of Refined Copper previously delivered to Purchaser in respect of such Offtaker Delivery pursuant to Section 2.2(1)(a), as supported by the documentation provided pursuant to Section 2.4 and the applicable Monthly Report. If such difference is negative, then Seller shall be entitled to set off and deduct such excess amount of Refined Copper from the next required delivery of Refined Copper by Seller to Purchaser under this Agreement or if no such further deliveries are to be made, Purchaser shall within twenty (20) days of the end of the following calendar month pay the applicable Copper Purchase Price in respect of any excess tonnes delivered to the extent not already paid. |
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| (2) | Subject to Completion occurring, the Deposit having been paid, Purchaser having paid the Subscription Amount under the PIPE Subscription Agreement and Section 2.10, with respect to each Offtaker Payment made after the Five Year Anniversary Date, within five (5) Business Days of each Offtaker Payment, Seller shall sell and deliver to Purchaser, Refined Copper in an amount equal to the Reference Copper in the Offtaker Delivery to which such Offtaker Payment relates, whether such Offtaker Payment relates to all or any portion of the Produced Copper contained in such Offtaker Delivery, provided that if an Offtaker Payment consists of a provisional payment that may be adjusted upon final settlement of an Offtaker Delivery, then: |
| (a) | Seller shall sell and deliver to Purchaser, within five (5) Business Days of any provisional Offtaker Payment, Refined Copper in an amount equal to: (A) the percentage paid on a provisional basis, such percentage being equal to the total value of the payment or other consideration received by any Seller Group Entity in respect of the Produced Copper contained in such Offtaker Delivery divided by the total value of the Produced Copper determined on a provisional basis (determined in accordance with the applicable Offtake Agreement) as being contained in such Offtaker Delivery; multiplied by (B) the Reference Copper contained in such Offtaker Delivery; as supported by the documentation provided pursuant to Section 2.4 and in the applicable Monthly Report; and |
| (b) | within five (5) Business Days of the final settlement of the Offtaker Delivery with the Offtaker, Seller shall sell and deliver to Purchaser Refined Copper in an amount, if positive, equal to the Reference Copper determined pursuant to the final settlement, less the number of tonnes of Refined Copper previously delivered to Purchaser in respect of such Offtaker Delivery pursuant to Section 2.2(2)(a), as supported by the documentation provided pursuant to Section 2.4 and the applicable Monthly Report. If such difference is negative, then Seller shall be entitled to set off and deduct such excess amount of Refined Copper from the next required delivery of Refined Copper by Seller to Purchaser under this Agreement or if no such further deliveries are to be made, Purchaser shall within twenty (20) days of the end of the following calendar month pay the applicable Copper Purchase Price in respect of any excess tonnes delivered to the extent not already paid. |
| (3) | If, for the purposes of Section 2.2(2), the Five Year Anniversary Date does not occur on a Quarter End Date, then with respect to each Offtaker Payment made during the period commencing on the Quarter End Date immediately preceding the Five Year Anniversary Date and ending on the Five Year Anniversary Date, Seller shall sell and deliver to Purchaser on the Five Year Anniversary Date (or if not a Business Day on the next Business Day), Refined Copper in an amount equal to the Reference Copper in each Offtaker Delivery occurring during such period and in respect of which an Offtaker Payment has been made in that period (whether such Offtaker Payment relates to all or any portion of the Produced Copper contained in such Offtaker Delivery), provided that if in such period an Offtaker Payment consists of a provisional payment that may be adjusted upon final settlement of an Offtaker Delivery, then: |
| (a) | Seller shall sell and deliver to Purchaser, on the Five Year Anniversary Date, Refined Copper in an amount equal to: (A) the percentage paid on a provisional basis, such percentage being equal to the total value of the payment or other consideration received by any Seller Group Entity in respect of the Produced Copper contained in such Offtaker Delivery divided by the total value of the Produced Copper determined on a provisional basis (determined in accordance with the applicable Offtake Agreement) as being contained in such Offtaker Delivery; multiplied by (B) the Reference Copper contained in such Offtaker Delivery; as supported by the documentation provided pursuant to Section 2.4 and in the applicable Monthly Report; and |
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| (b) | within five (5) Business Days of the final settlement of the Offtaker Delivery with the Offtaker, Seller shall sell and deliver to Purchaser Refined Copper in an amount, if positive, equal to the Reference Copper determined pursuant to the final settlement, less the number of tonnes of Refined Copper previously delivered to Purchaser in respect of such Offtaker Delivery pursuant to Section 2.2(1)(a), as supported by the documentation provided pursuant to Section 2.4 and the applicable Monthly Report. If such difference is negative, then Seller shall be entitled to set off and deduct such excess amount of Refined Copper from the next required delivery of Refined Copper by Seller to Purchaser under this Agreement or if no such further deliveries are to be made, Purchaser shall within twenty (20) days of the end of the following calendar month pay the applicable Copper Purchase Price in respect of any excess tonnes delivered to the extent not already paid. |
| Section 2.3 | Delivery of LME Warrants |
| (1) | Seller shall sell and deliver to Purchaser all Refined Copper to be sold and delivered under this Agreement by way of transfer of applicable LME Warrants representing such Refined Copper. |
| (2) | All deliveries of Refined Copper to Purchaser shall be deemed to have been made at such time and on such date (the “Time of Delivery” on the “Date of Delivery”) LME Warrants for such Refined Copper are transferred to the applicable designated metal account of Purchaser. Title to, and risk of loss of, Refined Copper shall pass from Seller to Purchaser at the place of delivery and the Time of Delivery on the Date of Delivery. All costs and expenses pertaining to each delivery of Refined Copper shall be borne by Seller. |
| (3) | Seller represents, warrants and covenants that, at each Time of Delivery: |
| (a) | it is the legal and beneficial owner of the Refined Copper delivered and credited to the designated metal account of Purchaser; |
| (b) | it has good, valid and marketable title to such Refined Copper; and |
| (c) | such Refined Copper is free and clear of all Encumbrances. |
| Section 2.4 | Invoicing |
| (1) | Seller shall notify Purchaser in writing at least two Business Days before any delivery and any credit or transfer to the designated metal account of Purchaser of: |
| (a) | the number of tonnes of Refined Copper to be delivered and the number of LME Warrants to be transferred; and |
| (b) | the estimated Date of Delivery and expected Time of Delivery. |
| (2) | At the Time of Delivery, Seller shall deliver to Purchaser an invoice setting out: |
| (a) | the number of tonnes of Refined Copper so delivered and the number of LME Warrants so transferred including the calculation of any top up deliveries in respect of the delivery of Refined Copper deferred in accordance with Section 2.10; |
| (b) | the Copper Purchase Price for all such Refined Copper to be delivered; |
| (c) | the amount (if any) being credited against the Uncredited Deposit and the remaining balance of the Uncredited Deposit (if any); |
| (d) | the accounting shipment summary of the Offtake Sales Documents prepared by Seller applicable to such delivery; and |
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| (e) | the aggregate number of tonnes of Refined Copper delivered to Purchaser under this Agreement up to the Time of Delivery (including, the Refined Copper subject to the invoice); and |
| (f) | any adjustments required to be made on account of any past or present Sub-Minimum Amounts or Top Up Amounts in accordance with Section 2.7 to the extent applicable; and |
shall attach to such invoice the Offtake Sales Documents for each such delivery.
| Section 2.5 | Purchase Price |
| (1) | Purchaser shall pay to Seller a purchase price for each tonne of Refined Copper sold and delivered by Seller to Purchaser under this Agreement (the “Copper Purchase Price”) equal to: |
| (a) | until the Uncredited Deposit has been reduced to nil, the Copper Market Price on the day immediately prior to the Time of Delivery; with an amount equal to the Copper Cash Price being payable in cash and the difference between the Copper Market Price and the Copper Cash Price being payable by crediting such amount against the Uncredited Deposit in order to reduce the Uncredited Deposit until the Uncredited Deposit has been reduced to nil; and |
| (b) | after the Uncredited Deposit has been reduced to nil, the Copper Cash Price, such amount being payable in cash. |
| (2) | Payment by Purchaser for each delivery of Refined Copper shall be made promptly and, in any event, not later than five Business Days after the later of the Time of Delivery and receipt of the documents set forth in Section 2.4(2). |
| Section 2.6 | Loss of Offtaker Delivery |
In the event of any total or partial loss of any Produced Copper prior to the transfer of risk of loss of any such Produced Copper to an Offtaker, then Seller shall be required to sell and deliver to Purchaser an amount of Refined Copper equal to the Reference Copper lost and contained in the provisional invoice to the Offtaker or that would have been sent to the Offtaker, in respect of such lost Produced Copper, such requirement to be performed no later than five Business Days after receipt by a Seller Group Entity of insurance proceeds or any other payment in respect of such loss. Seller shall promptly notify Purchaser of any such loss.
| Section 2.7 | Minimum Lot Size |
Notwithstanding Section 2.2, to the extent that Seller is required to deliver Refined Copper hereunder by way of LME Warrants pursuant to Section 2.3(1) and the amount of any such Refined Copper required to be so delivered (the “Sub-Minimum Amount”) is less than the minimum lot size for a single LME Warrant for Refined Copper (the “Minimum Lot Size”):
| (a) | to the extent that the Sub-Minimum Amount is less than 50% of the Minimum Lot Size, the requirement of Seller to deliver the Sub-Minimum Amount shall be postponed until such time as Seller’s accrued delivery requirements hereunder in respect of Refined Copper are of sufficient quantity to allow Seller to satisfy the Minimum Lot Size; and |
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| (b) | to the extent that the Sub-Minimum Amount is equal to or greater than 50% of the Minimum Lot Size, Seller shall deliver, together with the Sub-Minimum Amount, an additional amount of Refined Copper (the “Top Up Amount”) equal to the difference between the Minimum Lot Size and the Sub-Minimum Amount, and Seller shall be entitled to set off and deduct, pursuant to Section 10.5, an amount of Refined Copper equal to the Top Up Amount so delivered from the next required deliveries of Refined Copper by Seller to Purchaser under this Agreement. |
Upon the termination of this Agreement, any outstanding deliveries of Refined Copper that have been postponed pursuant to Section 2.7 shall become immediately due for delivery and any Top Up Amount that has been delivered but not set off pursuant to Section 2.7(b) shall become immediately payable to Seller (calculated using the Copper Market Price as of the Date of Delivery of the Top Up Amount to Purchaser) or set off against any amounts owing to Purchaser upon termination.
| Section 2.8 | Copper Stream Percentage |
| (1) | The percentage of Payable Copper comprising Reference Copper for the purpose of this Agreement is the percentage figure set out in the second column of the table below, at the relevant time set out in the first column of the table below (the “Copper Stream Percentage”). |
| Time | Copper Stream Percentage |
| From the Closing Date up to and including the first (1st) anniversary of the Closing Date. | 0% |
| From the first (1st) anniversary of the Closing Date up to and including the Five Year Anniversary Date | 3% (the “First Stream Percentage”) |
| From the Five Year Anniversary Date until the Threshold Quantity has been met. | 4.875% (the “Second Threshold Stream Percentage”) |
| Thereafter from the date that the Threshold Quantity has been met. | 2.25% (the “Tail Stream Percentage”) |
| (2) | The applicable Copper Stream Percentage is subject to adjustment in accordance with Section 2.9. |
| Section 2.9 | Buy-Down Option |
| (1) | Seller shall have a one-time option (the “Buy-Down Option”) to reduce the Copper Stream Percentage effective as of the Five-Year Anniversary Date (“Buy-Down Effective Date”) in one of the two following ways: |
| (a) | (Option 1) Seller may elect to reduce: |
| (i) | the: |
| (A) | Second Threshold Stream from the Second Threshold Stream Percentage to the Option 1 Threshold Stream Percentage; and |
| (B) | Threshold Quantity from the Original Threshold Quantity to the Option 1 Threshold Quantity; and |
| (ii) | the Tail Stream from the Tail Stream Percentage to the Option 1 Tail Stream Percentage, |
by making a one-time cash payment to Purchaser of the First Buy-Down Amount; or
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| (b) | (Option 2) Seller may elect to reduce: |
| (i) | the: |
| (A) | Second Threshold Stream from Second Threshold Stream Percentage to the Option 2 Threshold Stream Percentage; and |
| (B) | the Threshold Quantity from the Original Threshold Quantity to the Option 2 Threshold Quantity; and |
| (ii) | the Tail Stream from the Tail Stream Percentage to the Option 2 Tail Stream Percentage, |
by making a one-time cash payment to Purchaser of the Second Buy-Down Amount.
| (2) | Seller shall exercise the Buy-Down Option by providing written notice of such exercise to Purchaser at least thirty days prior to the Buy-Down Effective Date, including Seller’s selection of the applicable Buy-Down Option as contemplated in Section 2.9(1)(a) or Section 2.9(1)(b). If the Buy-Down Option has not been exercised and closed on or prior to the Buy-Down Effective Date, the Buy-Down Option shall expire and be of no further force and effect. |
| (3) | If Seller elects to exercise the Buy-Down Option in accordance with Section 2.9(2), Seller shall make the payment contemplated in Section 2.9(1)(a) or Section 2.9(1)(b), as applicable, to Purchaser in immediately available funds on or prior to the Buy-Down Effective Date (or if such date is not a Business Day, the immediately preceding Business Day) and the Second Threshold Stream, the Threshold Quantity and the Tail Stream shall be deemed to have been reduced as contemplated in Section 2.9(1)(a) or Section 2.9(1)(b), as applicable, as of the Buy-Down Effective Date. |
| Section 2.10 | Copper Delivery Deferral Option |
| (1) | During the period commencing on the first (1st) anniversary of the Closing Date and ending on [***], Seller shall have an option to defer the delivery of Refined Copper to Purchaser in accordance with Section 2.10(2). |
| (2) | In the event that as at a Quarter End Date during the Copper Deferral Option Period, no Event of Default has occurred and is continuing as of such day but MAC Australia and its Subsidiaries do not have sufficient cash and Cash Equivalent Investments standing to the credit of the Proceeds Account to pay, in accordance with the Cashflow Waterfall, all of the cash interest payments then due under the Mezzanine Debt Facility Agreement (as in effect on the date hereof) and to distribute to Seller sufficient funds to acquire and deliver to Purchaser all LME Warrants for Refined Copper then due and payable in respect of such calendar quarter in accordance with this Agreement, then Seller shall: |
| (a) | cause MAC Australia to pay, and MAC Australia shall pay, the amount available on such Quarter End Date under paragraph (l) of the Cashflow Waterfall from the Proceeds Account to the holder of the Mezzanine Debt on account of the Cash Component (as defined in the Mezzanine Debt Facility Agreement as in effect on the date hereof) of such cash interest payments and to Seller on account of funds required to acquire and deliver to Purchaser such LME Warrants for Refined Copper due and payable in respect of such calendar quarter in accordance with this Agreement, in each case in accordance with paragraph (l) of the Cashflow Waterfall; |
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| (b) | be entitled to defer the delivery of the remaining quantity of Refined Copper due and payable to Purchaser on such Quarter End Date until the next Quarter End Date but only in the circumstances where any such delivery would breach the Cashflow Waterfall; and |
| (c) | give written notice to Purchaser on the Quarter End Date of such calendar quarter setting out: |
| (i) | the amount of Reference Copper in each Offtaker Delivery occurring in such calendar quarter (and in respect of which an Offtaker Payment has been made in that calendar quarter); |
| (ii) | the amount of Refined Copper otherwise due to be delivered in that calendar quarter pursuant to Section 2.2 that will be deferred until the next Quarter End Date in accordance with this clause Section 2.10, including the calculation of any top up deliveries in respect of the delivery of Refined Copper deferred from any prior calendar quarter; and |
| (iii) | the percentage of cash interest payments paid under the Mezzanine Debt Facility Agreement in respect of such calendar quarter. |
| (3) | If Seller defers any such delivery of Refined Copper in accordance with this Section 2.10, Seller shall make a top up delivery to Purchaser the next calendar quarter equal to [***]. |
| (4) | [***]: |
| (a) | [***]; |
| (b) | [***]; and |
| (c) | [***]. |
| (5) | The Seller PSA Entities shall not amend or vary, or agree to amend or vary, in any way the Cashflow Waterfall where that amendment or variation could be adverse to the rights or interests of Purchaser without its prior written consent. |
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| Section 2.11 | Proceeds Account and Cashflow Waterfall |
| (1) | So long as any Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof remains outstanding, unless Purchaser otherwise agrees, the Seller PSA Entities must deposit, or cause to be deposited, on receipt into a Proceeds Account: |
| (a) | all money received by a Seller PSA Entity from Saleable Products or otherwise from the sale of Minerals (including copper and silver) and any other operating revenue received by a Seller PSA Entity; |
| (b) | net amounts received by a Seller PSA Entity under or in relation to any Hedging Agreement; |
| (c) | interest on the Proceeds Account, the Distribution Account and any other bank account of the Seller PSA Entities relating to the Project; |
| (d) | the proceeds of the loans or deposits, as applicable, received under each Acquisition Finance Document; |
| (e) | any liquidated damages payable under or in connection with the Material Contracts; |
| (f) | all GST refunds and input tax credits; |
| (g) | all net proceeds received under any Derivative Transaction entered into in accordance with the Approved Hedging; |
| (h) | the proceeds received by a Seller PSA Entity upon the issuance of Equity Securities in connection with the acquisition Transaction; |
| (i) | the proceeds of any insurance (including all business interruption insurance proceeds) in relation to the Project received by a Seller PSA Entity that have not been used for reinstatement or replacement of the relevant asset to which the insurance proceeds related within 60 days of receipt; |
| (j) | any final adjustment amount and final adjustment interest amount received by a Seller PSA Entity under the SSA; and |
| (k) | all other amounts received by a Seller PSA Entity (or to its order) in connection with the Project or its interest in the Project. |
| (2) | So long as any Permitted Secured Debt referred to in paragraphs (a) or (c) of the definition thereof remains outstanding, unless Purchaser otherwise agrees, all amounts deposited into a Proceeds Account may only be withdrawn in order to be applied in accordance with the provisions of the Cashflow Waterfall. |
ARTICLE 3
DEPOSIT
| Section 3.1 | Deposit |
In consideration for the sale and delivery of Refined Copper under and pursuant to the terms of this Agreement, Purchaser hereby agrees to pay to Seller a deposit in cash against the Copper Purchase Price in the amount of the Deposit, payable in accordance with Section 3.2 to the account designated by Seller for this purpose.
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| Section 3.2 | Closing Date Deliveries |
| (1) | Purchaser shall pay to Seller the Deposit on the Business Day (the “Closing Date”) on which: |
| (a) | Purchaser has received the documents, agreements and evidence set out in Part 1 of Schedule K in form and substance satisfactory to it; and |
| (b) | the other conditions set out in Schedule K are satisfied, fulfilled or waived (by the Party entitled to the benefit of the relevant condition); |
which date shall not be later than June 1, 2023 (or such later date as Purchaser may agree in its sole and unfettered discretion).
| (2) | Each of the conditions set forth in: |
| (a) | Part 1 of Schedule K is for the exclusive benefit of Purchaser and may only be waived by it in its sole discretion; and |
| (b) | Part 2 of Schedule K is for the exclusive benefit of Seller and may only be waived by it in its sole discretion. |
| (3) | Each Seller PSA Entity agrees that, as part of Purchaser reviewing the matters referred to in Part 1 of Schedule K, Purchaser may identify matters that in its opinion require amendments to a Copper Stream Document which must be entered into before the Closing Date. If it does so identify any such matter, then Purchaser will notify the Seller PSA Entities of the amendments and propose a draft amending agreement (or draft amendment and restatement of this Agreement). The Seller PSA Entities must then promptly enter into the amendment agreement (or amendment and restatement) and provide all other documents and evidence in connection with the entry into of it reasonably requested by Purchaser. If Purchaser has notified the Seller PSA Entities that an amendment agreement (or an amendment or restatement) is required, the Seller PSA Entities agree that Purchaser shall have no obligation to advance the Deposit until Purchaser notifies the Seller PSA Entities that the amendment agreement (or amendment and restatement) has been entered into and all other documents and evidence in connection with the entry into of it reasonably requested by Purchaser have been provided to the satisfaction of Purchaser. Purchaser agrees to notify the PSA Entities promptly upon being so satisfied. |
| Section 3.3 | Satisfaction of Conditions Precedent |
Each Seller PSA Entity shall use all reasonable commercial efforts and take all reasonable action as may be necessary or advisable to satisfy and fulfil all the conditions precedent set forth in Part 1 of Schedule K, as promptly as reasonably practicable.
| Section 3.4 | Condition Subsequent |
| (1) | The Seller PSA Entities will use best efforts to complete the Whitewash Procedure as soon as possible following the date hereof, but in any event, the Seller PSA Entities shall complete the Whitewash Procedure prior to the Whitewash Completion Date. |
| (2) | Within the time periods specified in Schedule L, the Seller PSA Entities shall satisfy and fulfill each of the conditions set out in Schedule L. |
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| Section 3.5 | Use of Deposit |
The Seller PSA Entities shall ensure that the Deposit is used only for the acquisition of the Project Owner.
ARTICLE 4
TERM
| Section 4.1 | Term |
The term of this Agreement shall commence on the Signing Date and, subject to Section 9.2(1)(c), shall continue until the date that is 20 years after the Signing Date (the “Initial Term”). Purchaser may terminate this Agreement at the end of the Initial Term by providing the Seller PSA Entities, prior to the expiry of the Initial Term, with written notice of its intention to terminate. If Purchaser has not provided such notice prior to the expiry of the Initial Term, then this Agreement shall continue in full force and effect for successive ten-year periods unless and until Purchaser provides written notice to the Seller PSA Entities terminating this Agreement prior to the end of the then current term.
| Section 4.2 | Uncredited Deposit |
If, by the expiry of the term of this Agreement or upon any early termination of this Agreement pursuant to Section 9.2(1)(c) or otherwise upon valid termination of this Agreement, Seller has not sold and delivered to Purchaser an amount of Refined Copper sufficient to reduce the Uncredited Deposit to nil in accordance with this Agreement, then Seller shall pay such Uncredited Deposit to Purchaser within 60 days of demand therefor following the expiry of the term or the termination of this Agreement by Purchaser.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
| Section 5.1 | Reporting Requirements |
| (1) | Seller shall deliver to Purchaser a Monthly Report on or before the fifth Business Day after the last day of each calendar month. |
| (2) | Promptly after the Mine Plan is presented to the board of directors of any Seller Group Entity, and in any event at least once every 12 months, and promptly whenever an update to the Mine Plan is adopted by management of any Seller Group Entity, Seller shall provide to Purchaser such Mine Plan or updated Mine Plan, as applicable, together with the following: |
| (a) | an updated annual production forecast for copper from the Stream Properties during the upcoming calendar year (to be set out on a monthly basis) and the remaining life of mine thereafter (to be set out on a yearly basis); |
| (b) | the amounts of Payable Copper and Reference Copper as forecast for the upcoming calendar year (to be set out on a monthly basis) and the remaining life of mine thereafter (to be set out on a yearly basis); |
| (c) | a list of assumptions used in developing the forecasts referred to in paragraphs (a) and (b), including the types, tonnages, grade and recoveries of ore from the Stream Properties and the operating costs and sustaining capital during the applicable forecast period in the case of the production forecast; |
| (d) | an updated Reserves Statement and a Resources Statement and the assumptions used in each such statement; |
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| (e) | an updated Base Case Financial Model; and |
| (f) | details as to any deviation or departure in the processes or operations set out in the Initial Technical Report. |
| (3) | Seller shall if practicable, notify and consult with Purchaser regarding any matter concerning the Mining Properties that has or, in the opinion of Seller, is reasonably likely to have an Adverse Impact. Seller shall seek to comply with this Section 5.1(3), to the extent reasonably practicable, prior to any public announcement regarding the matter. |
| (4) | Seller shall give Purchaser written notice of each of the following events promptly upon any Seller PSA Entity becoming aware of such event: |
| (a) | all material actions, suits, hearings, investigations or proceedings before any Governmental Authority or arbitrator pending or, to any Seller PSA Entity’s knowledge, threatened, against or affecting any Seller Group Entity or with respect to the ownership, use, maintenance or operation of the Mine or Mining Properties; |
| (b) | the occurrence of an Event of Default or any event or circumstance but for the giving of notice or the lapse of time, or both, would constitute an Event of Default; |
| (c) | any actual or threatened material default or breach under any Material Contract or any Acquisition Finance Document; |
| (d) | any actual or threatened material default, breach, revocation, termination or expropriation of any material Authorisation; |
| (e) | incurrence of any Indebtedness in a principal amount individually or in the aggregate in excess of US$10 million (or its equivalent); |
| (f) | any material environmental non-compliance; |
| (g) | any material non-compliance or breach of the Code of Conduct; |
| (h) | in each case, accompanied by a written statement by a senior officer of Seller setting forth details of the occurrence referred to therein. |
| (5) | The Seller PSA Entities shall deliver the following financial statements to Purchaser: |
| (a) | within 120 days after each fiscal year-end of Seller, annual comparative consolidated financial statements of Seller for the year then ended, audited and prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness, together with a duly executed and completed Annual Compliance Certificate; |
| (b) | within 90 days after each fiscal year-end of Project Owner and MAC Australia, annual comparative financial statements for the year then ended, unaudited and unconsolidated and prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness; |
| (c) | within 45 days after the end of each fiscal quarter of Seller, quarterly unaudited consolidated financial statements of Seller for the three month period then ended, prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness; and |
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| (d) | within 45 days after the end of each fiscal quarter of Project Owner and MAC Australia, quarterly unaudited financial statements of Project Owner and MAC Australia for the three month period then ended, prepared in accordance with IFRS, together with notes thereto, including details of any Financial Indebtedness. |
| (e) | To the extent any of the foregoing information is published publicly on Seller’s SEDAR profile or website, such publication shall constitute provision of such information to Purchaser. |
| (6) | Promptly after preparation of any environmental, social, climate or governance related report with respect to the Project Assets and operation of the Mine by any Seller Group Entity, and promptly following any update to any such report, the Seller PSA Entities shall provide all such reports to Purchaser, unless such information is published publicly on Seller’s SEDAR profile or website. The Seller PSA Entities shall use their commercially reasonable efforts to provide Purchaser with any information with respect to the Mine that it requires for its environmental, social and corporate governance reporting requirements and practices, as reasonably requested from time to time. |
| (7) | Seller shall provide Purchaser with copies of all compliance certificates, financial, production, environmental or other reports (including the Base Case Financial Model) given by or with respect to any Seller PSA Entity or the Project Owner to any holder of Permitted Secured Debt in their capacity as a debtholder or royalty holder, as applicable, concurrently with the delivery thereof to such holder. |
| Section 5.2 | Books and Records |
The Seller PSA Entities shall keep true, complete and accurate Books and Records to enable Purchaser to confirm compliance with the terms and conditions of this Agreement, including the determination of the Reference Copper. The Seller PSA Entities shall:
| (a) | provide copies to Purchaser of; and |
| (b) | permit Purchaser and its authorized representatives and agents to perform audits, reviews and other examinations of, |
such Books and Records from time to time, at such reasonable times as Purchaser may request upon reasonable notice and at Purchaser’s sole risk and expense, provided that, absent an Event of Default that has occurred and is continuing, Purchaser and its authorized representatives and agents shall not conduct more than one such audit, review or other examination in any fiscal year of Seller.
| Section 5.3 | Technical Reports |
| (1) | The Seller PSA Entities and the Project Owner shall prepare any Technical Report as and when required by Applicable Law. |
| (2) | If so requested by Purchaser, the Seller PSA Entities shall use commercially reasonable efforts to assist Purchaser in obtaining at the cost of Purchaser (i) consents and certificates from external qualified Persons with respect to Technical Reports pertaining to the Stream Properties as may be necessary to allow Purchaser or its Affiliates to make filings of technical reports prepared in accordance with NI 43-101 or other Applicable Law, to the extent any such reports are required to be filed by Purchaser or its Affiliates under Applicable Law, (ii) other technical data, records or information pertaining to the Stream Properties in the possession or control of the Seller PSA Entities to the extent any such information is required for any technical reports required to be filed by Purchaser or its Affiliates under Applicable Law, and (iii) will use commercially reasonable efforts to cause the authors of such Technical Report to have such Technical Report addressed directly to Purchaser or any Purchaser Affiliate if it files such Technical Report under NI 43-101 (to the extent applicable to Purchaser or any Affiliate thereof) or other Applicable Law. |
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| (3) | If so requested by Purchaser and at Purchaser’s cost, the Seller PSA Entities shall use their commercially reasonably efforts to assist Purchaser (A) in obtaining technical data, records or information pertaining to the Mine in the possession or control of the Seller PSA Entities or any consultants, to the extent that the Seller PSA Entities can control or require the provision of such information from the consultants, and (B) otherwise in conducting its own diligence of the Mine (including access thereto), in each case (x) if Purchaser or any Purchaser Affiliate prepares and files a Technical Report on the Stream Properties in accordance with NI 43-101 (to the extent applicable to Purchaser or any Affiliate thereof) or other Applicable Law and such information is reasonably necessary to permit Purchaser or any Purchaser Affiliate to prepare such technical report or (y) to facilitate the reliance by Purchaser or any Purchaser Affiliate on any exemption available from the requirement to file any such report. |
| (4) | Prior to the filing by Purchaser or any of its Affiliates of any Technical Report on the Mine, Purchaser will give the Seller PSA Entities a reasonable opportunity to review and comment on such Technical Report (and Purchaser shall consider in good faith any comments provided by the Seller PSA Entities), and shall provide to the Seller PSA Entities a final copy or an advance draft copy of any such Technical Report before it is filed or otherwise made publicly available and in any event not less than 5 Business Days before it is so filed. Purchaser agrees that neither the Seller PSA Entities nor any of their Affiliates shall assume any liability in connection with any disclosure by Purchaser or any of its Affiliates with respect to the Mine, including in connection with any Technical Report prepared or filed by Purchaser or any of its Affiliates that contains information concerning the Mine that was disclosed to Purchaser or its Affiliates hereunder. Purchaser shall not be entitled to exercise its rights provided above with respect to the preparation by Purchaser of a Technical Report, in the event that there is a current and complete Technical Report for the Mine that complies with all applicable legal and regulatory requirements and which has been addressed to Purchaser and all consents necessary for Purchaser (including those of third party qualified persons) to rely on and publicly file such Technical Report for the purposes of Applicable Law have been provided to Purchaser. |
| Section 5.4 | Inspections |
Subject at all times to the workplace rules and supervision of the Project Owner, and provided any rights of access do not interfere with any exploration, development, mining or processing work conducted on the Mining Properties, the Seller PSA Entities hereby grant to Purchaser and its representatives and agents, at reasonable times and upon reasonable notice and at Purchaser’s sole risk and expense, the right to access and physically inspect the Books and Records and the Mining Properties, in each case to monitor Project Owner’s mining and processing operations on the Stream Properties, to confirm compliance with the terms and conditions of this Agreement, or to otherwise monitor and review mining and processing operations. Absent an Event of Default that has occurred and is continuing, Purchaser and its authorized representatives and agents shall not exercise its rights under this section more than once per fiscal year of Seller except where required for the purposes of preparing a required Technical Report in accordance with Section 5.3.
| Section 5.5 | Effective Date of Rights |
The rights of Purchaser under Section 5.1 to Section 5.4 of this Agreement are effective on and from the date that Completion occurs.
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| Section 5.6 | Confidentiality |
| (1) | Each Party agrees that it shall maintain as confidential and shall not disclose, and shall cause its Affiliates, employees, officers, directors, advisors, agents and representatives to maintain as confidential and not to disclose any information (whether written, oral or in electronic format) received or reviewed by such Party (a “Receiving Party”) from any other Party, its Affiliates, employees, officers, directors, advisors, agents or representatives (a “Disclosing Party”) as a result of or in connection with this Agreement (“Confidential Information”), except in the following circumstances: |
| (a) | a Receiving Party may disclose Confidential Information to its professional advisors, including its auditors, legal counsel, lenders, brokers, underwriters and investment bankers and prospective financing or acquisition parties; |
| (b) | subject to Section 5.5(3) and Section 11.7, a Receiving Party may disclose Confidential Information where that disclosure is necessary to comply with any Applicable Law; |
| (c) | a Receiving Party may disclose Confidential Information where such information is already public knowledge other than by a breach of the confidentiality terms of this Agreement or is known by the Receiving Party prior to the entry into of this Agreement or obtained independently of this Agreement and the disclosure of such information would not breach any other confidentiality obligations; |
| (d) | with the approval of the Disclosing Party; |
| (e) | a Receiving Party may disclose Confidential Information to those of its and its Affiliates’ directors, officers, employees and agents who need to have knowledge of the Confidential Information; |
| (f) | in connection with any legal proceeding arising in connection with this Agreement, but any such disclosure shall be subject to such confidentiality procedures as may be reasonably requested by the Disclosing Party and approved by the court; and |
| (g) | to the extent required by a Person that is party to the Intercreditor Deed, Senior Facility Agreement, Glencore Royalty Deed or Mezzanine Debt Facility Agreement in connection with the transactions contemplated thereunder. |
| (2) | Each Party shall ensure that its and its Affiliates’ employees, directors, officers and agents and those persons listed in Section 5.6(1)(a) and Section 5.6(1)(e), are made aware of this Section 5.6 and comply with the provisions of this Section 5.6. Each Party shall be liable to the other Party for any improper use or disclosure of such terms or information by such persons. In addition, each Party has the right to pursue causes of action or other acts against such persons. |
| (3) | If a Party is required to file this Agreement in any public registry, filing system or depository, including SEDAR in order to comply with Applicable Law, it shall notify the other Parties of such requirement within two Business Days of the date of this Agreement, and the Parties shall consult with each other with respect to any proposed redactions to the Agreement in compliance with Applicable Law before it is filed in any such registry, filing system or depository. |
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ARTICLE 6
COVENANTS
| Section 6.1 | Conduct of Operations |
| (1) | Subject to Section 6.1(2), all decisions regarding the Mine and the Mining Properties (including the Mineral Processing Facilities), including all decisions concerning the methods, extent, times, procedures and techniques of any: (i) exploration, development and mining related to the Mine, including spending on operating and capital expenditures; (ii) leaching, milling, processing or extraction; (iii) materials to be introduced on or to the Mining Properties; and (iv) sales of Minerals and terms thereof shall be made by the Project Owner, in its sole discretion. |
| (2) | The Seller PSA Entities shall, and shall cause each other applicable Seller Group Entity to, carry out and perform all mining operations and activities pertaining to or in respect of the Mine, the Stream Properties and the Mineral Facilities in a commercially prudent manner and in accordance with all Applicable Laws, the Authorisations, the Mine Plan and in accordance with Good Practice Standards. In addition, the Seller PSA Entities shall, and shall cause the other applicable Seller Group Entities to: |
| (a) | ensure that all cut-off grade, short term mine planning, long term mine planning and production decisions concerning the Stream Properties shall be based on copper prices typical of normal industry practice and be made on the assumption that the Project Owner is receiving payment for all copper produced at the Stream Properties at Copper Market Prices; and |
| (b) | assume copper prices typical of normal industry practice and that the Project Owner is receiving payment for all copper produced at the Stream Properties at market prices, without any consideration of the financial impact of this Agreement: (A) in any resource or reserve determination, short term mine planning, long term mine planning and production decisions concerning the Stream Properties; (B) in any studies, analyses or decisions regarding the nature or location of the ore to be mined on, the sequence of mining operations or any related financing thereof; and (C) in any determination to operate, modify, suspend or terminate the Mineral Processing Facilities. |
| (3) | For greater certainty, nothing in this Section 6.1 shall require the Seller PSA Entities or any of their Affiliates or any other Person to operate or continue operating the Mine if Project Owner has determined that the exploitation of the Stream Properties is not, at the relevant time, economically feasible taking into account the principles in Section 6.1(2). |
| Section 6.2 | Processing/Commingling |
| (1) | The Seller PSA Entities shall process all Minerals through the Mineral Processing Facilities and ensure such processing occurs at the Mineral Processing Facilities in a manner consistent with the processing methods described in the Mine Plan. The Seller PSA Entities shall not process Other Minerals through the Mineral Processing Facilities, except in accordance with Section 6.2(2). |
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| (2) | Without limiting Section 6.2(1), the Seller PSA Entities shall not and shall ensure that no Seller Group Entity or other Person processes Other Minerals through the Mineral Processing Facilities, or commingles such Other Minerals with, Minerals mined, produced, extracted or otherwise recovered from the Stream Properties, unless (i) the applicable Seller Group Entity has adopted and employs reasonable practices and procedures for weighing, determining moisture content, sampling and assaying and determining recovery factors (a “Commingling Plan”), such Commingling Plan to ensure the division of Other Minerals and Minerals for the purpose of determining the quantum of Minerals; (ii) Purchaser shall not be disadvantaged as a result of the processing of Other Minerals in priority to, or concurrently with, the Minerals, or Seller, acting reasonably, shall have entered into an agreement to compensate Purchaser for any such disadvantage providing for a commensurate stream interest in such Other Minerals or another form of compensation (a “Compensation Agreement”); (iii) Purchaser has approved the Commingling Plan and, if applicable, the Compensation Agreement, such approval not to be unreasonably withheld; (iv) the Seller PSA Entities shall keep all books, records, data, information required by the Commingling Plan for the same period of time as is required by the applicable taxation authorities for the retention of financial records; and (v) the Seller PSA Entities shall keep all samples required by the Commingling Plan in accordance with Good Practice Standards. The Seller PSA Entities agree to revisit the Commingling Plan and the Compensation Agreement if Purchaser determines that circumstances have changed, in order to ensure that the Commingling Plan continues to provide for the accurate measurement of Minerals and the Compensation Agreement reasonably compensates Purchaser for any disadvantage. For greater certainty, the foregoing does not apply to the handling of Minerals by an Offtaker in accordance with its standard operating procedures and Good Practice Standards. |
| Section 6.3 | Preservation of Corporate Existence |
| (1) | Except for the Merger or as permitted by Section 6.6, each Seller PSA Entity shall do all things necessary or advisable to maintain its corporate existence and, in the case of Seller, remain a resident in Jersey for income tax purposes [***]. Seller shall maintain a registered office in Jersey and otherwise ensure that it satisfies all conditions required to remain a company registered in the Jersey. |
| (2) | Without limiting Section 6.6 and Section 11.12, other than to the extent it is a Permitted Transaction, no Seller PSA Entity shall consolidate, amalgamate with, or merge with or into, or Transfer all or substantially all of its assets to, or reorganize, reincorporate or reconstitute into or as another entity or participate in a demerger, or continue to any other jurisdiction or consummate a similar corporate event unless: (i) at the time of such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event, the resulting, consolidated, surviving or transferee entity/(ies) assumes in favour of Purchaser all the obligations of such Seller PSA Entity under each Copper Stream Document to which such Seller PSA Entity is a party; (ii) Purchaser has provided its prior written consent to such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event, such consent not to be unreasonably withheld; and (iii) each Seller PSA Entity acknowledges, confirms and agrees in favour of Purchaser that its obligations under each Copper Stream Document to which it is a party continue in full force and effect despite such consolidation, amalgamation, merger, reorganization, reincorporation, reconstitution, demerger, Transfer, continuance or similar corporate event. |
| Section 6.4 | Insurance |
| (1) | The Seller PSA Entities shall maintain with reputable insurance companies, insurance (including business interruption insurance) with respect to the Project Assets and the operations of the Project Owner conducted on and in respect of the Mine against such casualties and contingencies and of such types and in such amounts as is customary in the case of similar operations in similar locations, which shall include insurance on each shipment of Minerals from the Mine to the extent such insurance is available to the Seller PSA Entities on reasonable commercial terms, until risk of loss for such shipment has been transferred to the Offtaker. |
| (2) | Seller shall, upon request of Purchaser, furnish to Purchaser a certificate setting forth the nature and extent of all insurance maintained by or on behalf of the Seller PSA Entities in accordance with Section 6.4(1) and confirming its adequacy and sufficiency. Seller shall, upon the request of Purchaser, provide Purchaser with copies of all insurance policies as in effect from time to time relating to the Project Assets. |
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| (3) | All of the insurance policies relating to the Project Assets and the operations conducted thereon (and all policies of reinsurance issued in connection therewith) shall specify Purchaser as an additional insured and as a loss payee and contain such endorsements in favour of Purchaser as Purchaser shall reasonably require. |
| (4) | The Seller PSA Entities shall not do or omit to do anything, or cause anything to be done or omitted to be done, whereby any insurance required to be effected hereunder would, or would be likely to, be rendered void or voidable or suspended, impaired or defeated in whole or in part. |
| Section 6.5 | Project Assets |
The Seller PSA Entities shall:
| (a) | except pursuant to a Transfer in compliance with Section 6.6, cause the Project Owner to be the only legal and beneficial owner of, and ensure that, other than as arising under the Permitted Encumbrances or as a result of a Permitted Disposal, no other Person holds or acquires any ownership right, title or interest in, the Project Assets; |
| (b) | subject to Section 6.13, keep the Stream Properties in good standing; |
| (c) | cause the Project Owner to maintain all Authorisations necessary to operate the Mine in good standing and construct, develop and operate the Mine in a commercial prudent manner consistent with the Mine Plan and Good Practice Standards and in compliance with all Applicable Laws; and |
| (d) | if Project Owner intends to stockpile, store, warehouse or otherwise place Minerals off the Stream Properties, before doing so, the Seller PSA Entities shall obtain from the property owner, operator or both, as applicable, where such stockpiling, storage, warehousing or other placement occurs, to provide in favour of Purchaser a written acknowledgement in form and substance satisfactory to Purchaser, acting reasonably, which provides that Project Owner’s and/or its Affiliates’, as applicable, rights to the Produced Copper shall be preserved and which acknowledges Purchaser’s Encumbrances thereon and provides Purchaser with a right of access in the event of enforcement by Purchaser of the Copper Stream Security Documents. |
| Section 6.6 | Transfers |
| (1) | Except with the prior written consent of Purchaser, the Seller PSA Entities shall not, and shall cause the other Seller Group Entities to not: |
| (a) | permit, suffer or allow the Project Owner to Transfer, in whole or in part, or otherwise cease to hold (other than as contemplated by Section 6.5(b) or Section 6.6(3) or a transfer of Minerals in the ordinary course of business) all beneficial and legal title of, the Mining Properties and the other Project Assets or any right, title or interest therein; |
| (b) | Transfer, in whole or in part, or otherwise cease to hold (other than as contemplated by Section 6.5(b) or Section 6.6(3)), their direct or indirect interests in MAC Australia and the Project Owner; or |
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| (c) | agree to, or enter into any agreement, arrangement or other transaction with any Person that would cause, or otherwise allow or permit to exist, a Change of Control of any Seller PSA Entity. |
| (2) | Notwithstanding Section 6.6(1)(c), the prior written consent of Purchaser shall not be required in connection with a Change of Control of Seller if: |
| (a) | the Acquiror is an Approved Acquiror; |
| (b) | the Acquiror (if the Acquiror is not controlled by any other person) or the Person that is not controlled by any other Person that controls the Acquiror executes and delivers to Purchaser on the closing of such Change of Control a guarantee of the payment and performance of all of the Copper Stream Obligations, substantially in form and substance as set out in the Guarantee, and satisfactory to Purchaser, acting reasonably; |
| (c) | there is no Event of Default (or an event which with notice or lapse of time or both would become an Event of Default) that has occurred and is continuing as at the date of the Change of Control; and |
| (d) | each Seller PSA Entity acknowledges, confirms and agrees in favour of Purchaser that its obligations under each Copper Stream Document to which it is a party continue in full force and effect both before and after giving effect to such Change of Control. |
| (3) | Notwithstanding Section 6.6(1)(a), the Project Owner may proceed with any Permitted Disposal. |
| Section 6.7 | Offtake Agreements |
| (1) | The Seller PSA Entities shall ensure that: (i) when Minerals that contain any marketable metal are to be sold or otherwise disposed of, all such Minerals are sold by Seller to an Offtaker pursuant to an Offtake Agreement; and (ii) no Seller Group Entity shall smelt, refine or beneficiate any Produced Copper and the final sale or delivery of Produced Copper shall only be made to an Offtaker pursuant to an Offtake Agreement. |
| (2) | The Seller PSA Entities shall ensure that all Offtake Agreements entered into by Seller (or any other Seller Group Entity) shall be on commercially reasonable arm’s length terms and conditions for marketable and metal-bearing material similar in make-up and quality to those derived from the Minerals, and shall include (i) industry standard reporting and payment settlement protocols, (ii) provisions that require the delivery of metals return statements, provisional and final settlement sheets and invoices and certificates for final shipped moisture content and analyses and assays evidencing the amount of Minerals, and (iii) provisions that require appropriate and separate sampling, assaying, weighing and moisture determination procedures so that Seller (or any other Seller Group Entity) and the applicable Offtaker can determine the grade or content of silver, copper and other metals in each delivery to an Offtaker. |
| (3) | The Seller PSA Entities shall, and shall cause the other Seller Group Entities to, deliver all Minerals that include marketable metal to each Offtaker in such quantity, description and amounts and at such times and places as required under and in accordance with each Offtake Agreement. |
| (4) | Seller shall promptly provide to Purchaser confirmation of the terms of any such Offtake Agreement and, within 5 days after the execution thereof by each of the parties thereto, Seller shall provide to Purchaser a final signed copy of such Offtake Agreement and use its commercially reasonable efforts to avoid any requirement for the redaction of any part thereof, failing which, such Offtake Agreement shall be provided subject to the redactions required by any such Offtake Agreements. |
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| Section 6.8 | Material Contracts |
| (1) | The Seller PSA Entities shall take, and shall cause the other Seller Group Entities to take, all commercially reasonable steps to enforce their respective rights and remedies under each Material Contract with respect to any breaches of the terms thereof (including in the case of any Offtake Agreement, any breaches relating to the timing and amount of Offtaker settlements). Seller shall promptly notify Purchaser in writing when any dispute arising out of or in connection with any Material Contract is commenced and shall provide Purchaser with timely updates of the status of any such dispute and the final decision and award of the court or arbitration panel with respect to such dispute, as the case may be. |
| (2) | The Seller PSA Entities shall promptly following execution thereof deliver to Purchaser copies of all Material Contracts and any and all amendment thereto. |
| (3) | Upon the request of Purchaser following: |
| (a) | any Seller PSA Entity entering into a new Material Contract; or |
| (b) | a Person obtaining an interest in a Tenement, |
in each case that Purchaser determines, after consulting Seller in good faith, requires a side agreement, the relevant Seller PSA Entity shall enter into, and each Seller PSA Entity shall use its reasonable endeavours to procure that the counterparty to the Material Contract enters into a side agreement in form and of substance satisfactory to Purchaser (acting reasonably) under which that counterparty consents to the Seller PSA Entity granting Security over all of its rights, title and interest in, to and under the Material Contract or Tenement, as the case may be.
| Section 6.9 | Restrictions on PSA Entities |
| (1) | Project Owner shall not, and the Seller PSA Entities shall not permit Project Owner to: |
| (a) | carry on any business other than the business of operating the Mine including exploration and development activities, and all other ancillary activities related thereto, or as required to perform its obligations under Applicable Law or the Transaction Documents; |
| (b) | own or lease any real or personal property, other than as required to carry on the business described in Section 6.9(1)(a), except any real or personal property that is not material to Project Owner; |
| (c) | incur, assume, be liable for or permit to exist any liabilities or obligations (contingent or otherwise, and excluding Financial Indebtedness), other than such liabilities or obligations as reasonably required to carry on the business described in Section 6.9(1)(a); |
| (d) | incur, assume, be liable for or permit to exist any Financial Indebtedness other than Permitted Indebtedness; |
| (e) | grant, incur, assume or permit to exist any Encumbrance (other than any Permitted Encumbrances) on the property or assets of Project Owner (including, for greater certainty, the Project Assets); or |
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| (f) | make any loan to, or make any investment in, its direct or indirect security holders or their Affiliates other than, after the Whitewash Completion Date, another Seller PSA Entity or any Permitted Loan. |
| (2) | Seller shall not: |
| (a) | carry on any business other than as holding company and as required to perform its obligations under the Transaction Documents and activities ancillary thereto; |
| (b) | own or lease any real property (other than a lease of immaterial office space) or material personal property (other than holding the Deposit, cash, any Refined Copper to be delivered hereunder or any refined silver to be delivered pursuant to the Silver Stream Documents) and Equity Securities in wholly-owned Subsidiaries; |
| (c) | incur, assume, be liable for or permit to exist any Financial Indebtedness or other liabilities or obligations (contingent or otherwise), other than: (i) obligations of Seller under the Transaction Documents; (ii) any liabilities and obligations (excluding Financial Indebtedness) necessary for the performance of its obligations under the Transaction Documents; (iii) obligations under any Subordinated Intercompany Debt; (iv) any legal, accounting, tax, administration, corporate maintenance or similar liabilities arising in the ordinary course of its business; or (v) other Permitted Indebtedness; |
| (d) | grant, incur, assume or permit to exist any Encumbrance on its property or assets, other than the Security and Permitted Encumbrances; or |
| (e) | make any loan to, guarantee the obligations of, provide for other credit support for, or make any investment in, its direct or indirect Subsidiaries, other than by way of Subordinated Intercompany Debt or any Permitted Loan. |
| (3) | MAC Australia shall not: |
| (a) | carry on any business other than holding the shares of Project Owner or as required to perform its obligations under the Transaction Documents; |
| (b) | own or lease any real property or own or lease any personal property, other than as required to carry on the business described in Section 6.9(3)(a), other than the shares of Project Owner and cash or investment securities; |
| (c) | incur, assume, be liable for or permit to exist any liabilities or obligations (contingent or otherwise, and excluding Financial Indebtedness), other than such liabilities or obligations as reasonably required to carry on the business described in Section 6.9(3)(a); |
| (d) | incur, assume, be liable for or permit to exist any Financial Indebtedness other than (i) its obligations under the Transaction Documents; (ii) any liabilities and obligations (excluding Financial Indebtedness) necessary for the performance of its obligations under the Transaction Documents; (iii) obligations under any Subordinated Intercompany Debt; or (iv) any legal, accounting, tax, administration, corporate maintenance or similar liabilities arising in the ordinary course of its business; |
| (e) | grant, incur, assume or permit to exist any Encumbrance (other than any Permitted Encumbrances) on any present or after acquired property or assets of MAC Australia; or |
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| (f) | make any loan to or make any investment in, its direct or indirect security holders or their Affiliates other than another Seller PSA Entity and by way of Subordinated Intercompany Debt or any Permitted Loan. |
| Section 6.10 | Separation Requirements |
The Seller PSA Entities shall ensure that the Project Owner and each other Seller PSA Entity will be treated for all purposes as a separate Person in its dealings from all other Persons (including other Seller PSA Entities), including by ensuring that each of the Project Owner and the other Seller PSA Entities will (i) maintain books and records separate from any other Person; (ii) maintain its accounts separate from those of any other Person; (iii) conduct its own business in its own name; (iv) maintain separate financial statements or records (noting that this does not limit or prohibit the Seller Group Entities or the Seller PSA Entities preparing consolidated financial statements); (v) pay any liabilities out of its own funds; (vi) use separate invoices and cheques; (vii) hold itself out as a separate Person; (viii) correct any known misunderstanding regarding its separate identity; and (ix) engage in dealings with its Affiliates in a manner that respects its separate corporate identity.
| Section 6.11 | Related Party Transactions |
Without limiting any other provision of this Agreement, the Seller PSA Entities shall ensure that any Related Party Transaction entered into by the Seller PSA Entities shall be:
| (a) | in the ordinary course of business, at prices and on terms and conditions that are commercially reasonable and could be obtained in a similar arm’s length transaction; and |
| (b) | subject to a Subordination Deed in accordance with Section 7.1(5). |
| Section 6.12 | Distributions. |
The Seller PSA Entities and the Project Owner shall not:
| (a) | make any Distribution other than: (i) Distributions by the Project Owner and MAC Australia necessary for Seller to fulfill its Copper Stream Obligations and the Silver Stream Obligations; (ii) Distributions by the Project Owner and MAC Australia in a reasonable amount in respect of management salaries, director and auditor’s fees and similar expenses of Seller relating to the administration of the Project Owner as required pursuant to any Related Party Transaction that complies with the requirements of Section 6.11 (iii) Distributions by the Project Owner to MAC Australia provided that each of the Project Owner and MAC Australia has delivered the Copper Stream Security Documents required to be delivered by it pursuant to this Agreement and provided such Copper Stream Security Documents remain in effect; (iv) payments made on account of Permitted Indebtedness or (vi) any other Distribution provided that the amount of cash or Cash Equivalent Investments (net of any redemption costs) freely available to the Seller PSA Entities immediately following the Distribution is not less than US$30,000,000 and no Event of Default is continuing or would occur as a result of making the Distribution; |
| (b) | upon the occurrence of a Trigger Event and until 90 days after any such Trigger Event has been remedied or in the event the making of a Distribution would cause a Trigger Event, make any Distribution; or |
| (c) | permit Project Owner or any Seller PSA Entity to be subject to any restrictions on its ability to make Distributions (whether by way of dividend, debt repayment or otherwise) to MAC Australia or Seller that would impede in any manner Seller’s ability to make payments under this Agreement to Purchaser as and when provided for herein. |
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| Section 6.13 | Abandonment |
Project Owner may abandon, surrender, relinquish or allow to lapse or expire any of the Stream Properties (an “Abandonment”, and “Abandon” and “Abandoned” shall have corresponding meanings) if Project Owner determines, acting in a commercially reasonable manner, that it is not economical to mine the Minerals from such Stream Properties that it proposes to Abandon and the Seller PSA Entities have provided Purchaser with at least ninety (90) days’ prior written notice of such Abandonment and the Seller PSA Entities have not received from Purchaser, at least 30 days before the proposed date of the Abandonment, written notice that Purchaser desires Project Owner to convey or cause the conveyance of such Stream Properties to be Abandoned (the “Abandonment Property”) to Purchaser or an assignee thereof. If such a written notice is received by the Seller PSA Entities from Purchaser, the Seller PSA Entities shall, in exchange for consideration of one U.S. Dollar, acting in good faith, use commercially reasonable efforts to convey or cause the conveyance of the Abandonment Property to Purchaser on an as is, where is basis and at the sole cost, risk and expense of Purchaser and shall thereafter have no further obligation to maintain the title to such Abandonment Property. If Purchaser does not give such written notice to the Seller PSA Entities within the prescribed period of time, Project Owner may Abandon such Abandonment Property and shall thereafter have no further obligation to maintain the title to such Abandonment Property or maintain such Abandonment Property in good standing.
| Section 6.14 | Not Used |
| Section 6.15 | Code of Conduct |
| (1) | Within twelve months of the Closing Date, Seller shall cause the Seller Group Entities to establish a code of conduct setting out the principles to guide the conduct of business and affairs of the Seller Group Entities including environmental and governance standards, relationship with indigenous peoples and communities in which it operates and compliance with Anti-Corruption Laws and Anti-Terrorism Laws. Such code of conduct shall be satisfactory to Purchaser, acting reasonably and approved by the board of directors of Seller and the other Seller Group Entities (the “Code of Conduct”). |
| (2) | Seller shall abide by the Code of Conduct and shall take all commercially reasonable steps to obtain compliance by its employees, consultants and agents with the Code of Conduct. |
| (3) | Seller shall not, and shall cause the Seller Group Entities to not, terminate, replace, amend or otherwise vary the principles set out in the Code of Conduct except as considered necessary or appropriate to adhere to higher standards or practices. |
| (4) | Within twelve months of the Closing Date, Seller shall join the United Nations Global Compact, implement the principles thereof and comply with the applicable reporting obligations thereunder. |
| Section 6.16 | Anti-Corruption and Anti-Terrorism Laws |
The Seller PSA Entities shall, and shall cause each Seller Group Entity to (i) comply with applicable Anti-Terrorism Laws and Anti-Corruption Laws, (ii) refrain from dealing in, or otherwise engaging in any transaction related to, any property or interests in property obtained in contravention or blocked pursuant to any applicable Anti-Terrorism Laws or Anti-Corruption Laws, or engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any applicable Anti-Terrorism Laws or Anti-Corruption Laws, and (iii) take all measures appropriate in the circumstances (in any event as required by Applicable Law) to provide reasonable assurance that each Seller Group Entity is and will continue to be in compliance with applicable Anti-Terrorism Laws and Anti-Corruption Laws.
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| Section 6.17 | Sanctions |
| (1) | Each Seller PSA Entity shall not, and shall cause each Seller Group Entity to not, engage in, or be a party to, any transaction or activity: |
| (a) | with a Sanctioned Person; |
| (b) | with a Person who is owned or controlled, either directly or indirectly, by, or is otherwise acting on behalf of, a Sanctioned Person; |
| (c) | that is for the benefit of a Sanctioned Person; or |
| (d) | that would amount to a breach of any applicable Sanctions. |
| (2) | Neither any Seller PSA Entity nor any of its shareholders, Affiliates, directors, officers, employees, agents or representatives will directly or indirectly, use the proceeds of the Deposit or any Copper Cash Price payable hereunder, or lend, contribute, or otherwise make available such proceeds to any Affiliate, joint venture partner, or other Sanctioned Person: |
| (a) | to fund any activities or business of or with a Sanctioned Person or for the benefit of a Sanctioned Person; or |
| (b) | in any manner that would be prohibited by applicable Sanctions or would otherwise cause Purchaser to be in breach of any applicable Sanctions. |
| (3) | Each Seller PSA Entity undertakes that it will not fund any of its operations or deliveries of Refined Copper hereunder with proceeds derived from any transaction that would be prohibited by applicable Sanctions or would otherwise cause Purchaser to be in breach of any applicable Sanctions. |
| Section 6.18 | Financial Covenants |
| (1) | The Seller PSA Entities shall ensure that at all times: |
| (a) | the ratio of Total Net Debt to EBITDA shall not be more than 3.5:1 on any date during the period from the Closing Date to the date falling 12 months after the Closing Date and shall not be more than 3.25:1 on any date thereafter; |
| (b) | prior to the Deposit Reduction Date, the Reserve Tail Ratio is projected to be greater than 25% at the latest maturity date of any and all Permitted Secured Debt referred to in paragraph (a) and (c) of the definition thereof; and |
| (c) | prior to the Deposit Reduction Date, the aggregate of Available Cash and Cash Equivalent Investments of MAC Australia and its Subsidiaries is at least US$30,000,000. During the period from the Closing Date to the date falling 12 months after the Closing Date, the calculation of Available Cash will include any undrawn portion of Facility B under the Senior Project Acquisition Facility. |
| (2) | The covenants in Section 6.18(1) shall be tested as at each date an Annual Compliance Certificate must be delivered in accordance with Section 5.1(5)(a). The covenants in Section 6.18(1)(a) and Section 6.18(1)(c) shall be tested by reference to the latest financial statements delivered under Section 5.1(5) and the covenant in Section 6.18(1)(b) shall be tested by reference to the Base Case Financial Model. |
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| (3) | If a covenant set out in Section 6.18(1)(a) or Section 6.18(1)(c) is not satisfied at any time (a "Relevant Breach"), a Seller PSA Entity may procure that the Relevant Breach is cured in accordance with Section 6.18(4). |
| (4) | Subject to Section 6.18(5), a Relevant Breach may be cured by a Seller PSA Entity prepaying the Senior Project Acquisition Facility in part in such as amount as would result in the relevant covenant in Section 6.18(1) being complied with no later than 30 days after notifying Purchaser of an actual or anticipated breach of such covenant. The prepayment must be funded by either or both of: |
| (a) | a subscription for shares or other equity interests in Seller or other cash funding from a Seller PSA Entity; or |
| (b) | proceeds from any subordinated loans (or other financial accommodation) which are permitted as Permitted Indebtedness. |
| (5) | Seller shall not be entitled to the remedy set out in to Section 6.18(4) if: |
| (a) | Seller has already exercised the remedy three times since the Closing Date; or |
| (b) | during the period since the covenant was last tested. |
| Section 6.19 | Taxation |
| (1) | Each Seller PSA Entity and the Project Owner shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that: |
| (a) | such payment is being contested in good faith; |
| (b) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to Purchaser under Section 5.1(5); and |
| (c) | such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have an Adverse Impact. |
| (2) | No Seller Group Entity may change its residence for Tax purposes. |
| (3) | Each Seller PSA Entity undertakes to ensure that the Tax Sharing Agreement and Tax Funding Agreement delivered pursuant to Section 3.2 are maintained in full force and effect and that each member of that Tax Consolidated Group complies with that Tax Sharing Agreement and Tax Funding Agreement, and they are not varied without Purchaser’s consent. |
| (4) | No Seller PSA Entity may enter into a deed of cross guarantee or assumption deed with any entity which is not a Seller PSA Entity for the purposes of ASIC Corporations (Wholly-owned Companies) Instrument 2016/785. |
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ARTICLE 7
GUARANTEES AND SECURITY
| Section 7.1 | Guarantees and Security |
| (1) | On or prior to the Closing Date, MAC Australia shall (i) execute and deliver a guarantee in favour of Purchaser, in form and substance satisfactory to Purchaser, acting reasonably, guaranteeing the payment and performance, when due, of all Copper Stream Obligations (the “Holdco Guarantee”) and (ii) grant to Purchaser continuing and first ranking priority charges, pledges and security interests in, to and over all of its present and after-acquired property (subject only to Permitted Encumbrances) as security for its obligations under the Holdco Guarantee and the other Copper Stream Documents, all pursuant to the Copper Stream Security Documents listed below its name in Schedule G (collectively, the “Holdco Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (2) | On or prior to Closing Date, Seller shall grant to Purchaser continuing and first ranking priority charges, mortgages, assignments by way of security, pledges and security interests in, to and over all of its present and after-acquired property, other than the Excluded Shares, (subject only to Permitted Encumbrances) as security for its obligations hereunder and the other Copper Stream Documents, all pursuant to the Copper Stream Security Documents listed below its name in Part I of Schedule G (collectively, the “Seller Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (3) | Within 5 Business Days following the Whitewash Completion Date and in any event contemporaneously with the execution and delivery of any Transaction Security Document by the Project Owner, the Project Owner shall execute and deliver a guarantee in favour of Purchaser, in form and substance satisfactory to Purchaser, acting reasonably, guaranteeing the payment and performance, when due, of all Copper Stream Obligations (the “Project Owner Guarantee”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (4) | Within 5 Business Days following the Whitewash Completion Date and in any event contemporaneously with the execution and delivery of any Transaction Security Document by the Project Owner, Project Owner shall grant to Purchaser continuing and first ranking priority charges, pledges and security interests in, to and over all of its present and after-acquired property (subject only to Permitted Encumbrances) as security for its obligations under the Project Owner Guarantee and the other Copper Stream Documents, all pursuant to the Copper Stream Security Documents listed below its name in Schedule G (collectively, the “Project Owner Security Agreements”), in form and substance satisfactory to Purchaser, acting reasonably. |
| (5) | The Seller PSA Entities shall cause each Seller Group Entity to whom any indebtedness is owed by a Seller PSA Entity (including pursuant to a Related Party Transaction), to execute and deliver a Subordination Deed. |
| (6) | The Seller PSA Entities shall cause all such general security agreements, assignments, real estate mortgages, mining mortgages over the tenements, control agreements, pledges and other agreements, instruments and documents to be executed and delivered, and all such further acts and things to be taken, as Purchaser may from time to time reasonably require to obtain, perfect, maintain and preserve first ranking prior perfected charges and security interests (subject to prior ranking Permitted Encumbrances) in, to and over all of each Seller PSA Entity’s property and assets (other than the Excluded Shares) in all appropriate jurisdictions. In addition to the foregoing, in the event of any acquisition, extension, renewal, replacement, conversion or substitution of any of the Mining Properties (or any part thereof), then Seller PSA Entities shall immediately notify Purchaser of such event and execute and deliver, or cause to be executed and delivered, all agreements, documents, instruments and registrations, and do all such further acts and things as Purchaser may require, to obtain perfect and preserve a first ranking security interest in such tenement, right or interest or resulting tenement, right or interest, or such other Mining Property as security for the payment and performance, when due, of all Copper Stream Obligations. |
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| (7) | The Seller PSA Entities shall not, and shall cause each other Seller Group Entity to not, contest in any manner the effectiveness, validity, binding nature or enforceability of this Agreement or any of the Copper Stream Security Documents. |
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
| Section 8.1 | Representations and Warranties of the Seller PSA Entities |
The Seller PSA Entities, acknowledging that Purchaser is entering into this Agreement in reliance thereon, hereby jointly and severally make:
| (a) | as of the date of execution of this Agreement, the representations and warranties to Purchaser set forth in Parts 1 and 3 of Schedule C; and |
| (b) | as at the Closing Date, the representations and warranties to Purchaser set forth in Parts 1, 2 and 3 of Schedule C. |
Such representations and warranties shall be deemed to be repeated (on the date of the relevant certificate) to the extent that they are certified to be true and correct in a certificate delivered by any Seller PSA Entity pursuant to Section 3.2(1) and Schedule K and each Annual Compliance Certificate.
| Section 8.2 | Representations and Warranties of Purchaser |
Purchaser, acknowledging that the Seller PSA Entities are entering into this Agreement in reliance thereon, hereby makes, as of the date of execution of this Agreement, the representations and warranties to the Seller PSA Entities set forth in Schedule D.
| Section 8.3 | Survival of Representations and Warranties |
The representations and warranties set forth above shall survive the execution and delivery of this Agreement.
| Section 8.4 | Knowledge |
Where any representation or warranty contained in this Agreement is expressly qualified by reference to the “knowledge” of the Seller PSA Entities, it shall be deemed to refer to the actual knowledge of any director or officer of the Seller PSA Entities, and all knowledge which such persons would have if such Person made due enquiry into the relevant subject matter having regard to the role and responsibilities of such Person as an officer or director of the Seller PSA Entities, as applicable.
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ARTICLE 9
DEFAULTS AND DISPUTES
| Section 9.1 | Events of Default |
Each of the following events or circumstances constitutes an event of default (each, an “Event of Default”):
| (a) | Seller fails to sell and deliver Refined Copper to Purchaser on the terms and conditions set forth in this Agreement within ten Business Days of receipt of notice from Purchaser notifying Seller of such default; |
| (b) | any Seller PSA Entity is in breach or default of any of its covenants or obligations set forth in any Copper Stream Document in any material respect (other than a breach or default of the covenants and obligations referenced in Section 9.1(a)), and such breach or default is not remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice of such breach or default, and (ii) such Person becoming aware of such breach; |
| (c) | any representations or warranty made or deemed to be made by a Seller PSA Entity in any Copper Stream Document is or proves to be incorrect or misleading in any material respect (or in any respect in the case of representations and warranties that are qualified by materiality), and such breach or default is not remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice, and (ii) such Person becoming aware of the misrepresentation; |
| (d) | any Financial Indebtedness of any Seller PSA Entity (i) is not paid when due nor within any original grace period, or (ii) is declared to be or otherwise becomes due and payable before its specified maturity date as a result of a default or review event (however described) or any commitment for any Financial Indebtedness of any Seller PSA Entity is cancelled or suspended by a creditor or any of them as a result of an event of default or review event (however described) or any creditor of any Seller PSA Entity becomes entitled to declare any Financial Indebtedness due and payable prior to its stated maturity date as a result of an event of default or review event (however described). Provided that, no Event of Default will occur under this Section 9.1(d) if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling with this section is less than US$10,000,000 (or its equivalent in any other currency or currencies); |
| (e) | any action is taken by a Person to enforce any Encumbrance in, over or against any of the Collateral or any of the assets used in connection with the Mine which if successful would result in an Adverse Impact; |
| (f) | any substantial portion of the Stream Properties or other Project Assets is expropriated by a Governmental Authority, or a Governmental Authority otherwise takes any action the result of which is that all or substantially all of the rights, privileges and benefits pertaining to or associated with all or any part of the Stream Properties cease being for the benefit or entitlement of the Project Owner, whether as a result of ceasing to own such part of the Stream Properties or otherwise; |
| (g) | a provision of a Copper Stream Document is or becomes or is claimed by a party other than Purchaser to be wholly or partly invalid, void, voidable or unenforceable in any material respect; |
| (h) | any event or circumstance where the Intercreditor Deed becomes wholly or partly invalid, void, voidable or unenforceable or illegal in any respect; |
| (i) | it is or becomes unlawful for a Seller PSA Entity to perform any of its obligations under the Copper Stream Documents or any Security created or expressed to be created or evidenced by the Copper Stream Security Documents ceases to be effective or to constitute an Encumbrance having the priority stipulated herein over the Collateral (subject to any Permitted Encumbrances) and any such default has not been remedied within 30 days following the earlier of (i) delivery by Purchaser to Seller of written notice of such event or default, and (ii) any Seller PSA Entity becoming aware of such event or default, provided that: (A) such default is capable of being cured; and (B) Purchaser shall not suffer any material prejudice as a result of the delay; |
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| (j) | the occurrence of a Change of Control of any Seller PSA Entity, other than a Change of Control of Seller that is permitted in accordance with Section 6.6(2); |
| (k) | the occurrence of an Insolvency Event of Default; |
| (l) | any event or series of events, whether related or not, occurs (including a material adverse change in the business, assets or financial condition of any Seller PSA Entity or the value of the Collateral) which has or is reasonably likely to have an Adverse Impact; |
| (m) | any Seller PSA Entity repudiates a Copper Stream Document or evidences an intention to repudiate a Copper Stream Document; |
| (n) | the shares of Seller are removed from the official list of the New York Stock Exchange; or |
| (o) | any Event of Default under and as defined in the Silver Purchase Agreement.. |
| Section 9.2 | Remedies |
| (1) | If an Event of Default occurs and is continuing, Purchaser shall have the right, upon written notice to Seller, at its option and in addition to and not in substitution for any other remedies available at law or equity, to take any or all of the following actions in its sole discretion: |
| (a) | demand all amounts and deliveries owing by any of the Seller PSA Entities to Purchaser, including pursuant to Section 9.3, and set off any such amount in accordance with Section 10.5; |
| (b) | bring an action for provisional remedies or institute arbitration proceedings for damages or specific performance, in each case, in accordance with Section 9.5; |
| (c) | terminate this Agreement by written notice to the Seller PSA Entities and, without limiting Section 9.2(1)(a) and Section 9.2(1)(b), demand all Losses suffered or incurred as a result of the occurrence of such Event of Default and termination, including damages based on Purchaser’s loss of the benefits of this Agreement calculated as the greater of (i) the IRR Amount, and (ii) Losses determined in accordance with Section 9.3(4), and all such deliveries and amounts shall become immediately due and payable upon demand; or |
| (d) | enforce the Security. |
| (2) | The Parties hereby acknowledge and agree that: (i) Purchaser will be damaged by an Event of Default; (ii) it would be impracticable or extremely difficult to fix the actual damages resulting from an Event of Default; (iii) any sums payable in accordance with Section 9.2(1)(c) (including any sums based on the Stream NPV) with respect to an Event of Default are in the nature of liquidated damages, not a penalty, and are fair and reasonable; and (iv) the amount payable in accordance with Section 9.2(1)(c) or with respect to an Event of Default represents a reasonable estimate of fair compensation for the Losses that may reasonably be anticipated from such Event of Default in full and final satisfaction of all amounts owed in respect of such Event of Default. |
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| Section 9.3 | Indemnity |
| (1) | Each of the Parties agrees to indemnify and save harmless the other Parties and their respective Affiliates and directors, officers, employees and agents from and against any and all Losses suffered or incurred by any of the foregoing Persons in connection with: |
| (a) | any inaccuracy in or default or breach of any representation or warranty of such Party contained in this Agreement; |
| (b) | any breach or non-performance by such Party of any covenant or obligation to be performed by it pursuant to this Agreement; |
| (c) | in the case of indemnification by any of the Seller PSA Entities, an Event of Default; and |
| (d) | pursuing any remedies to which a Party is entitled hereunder. |
| (2) | This Section 9.3 is: |
| (a) | a continuing obligation, separate and independent from the Parties’ other obligations and survives the termination of this Agreement; and |
| (b) | absolute and unconditional and unaffected by anything that might have the effect of prejudicing, releasing, discharging or affecting in any other way the liability of the Party giving the indemnity. |
| (3) | It is not necessary for a Party to incur expense or make payment before enforcing a right of indemnity under this Agreement. |
| (4) | In determining the Losses suffered or incurred by Purchaser in connection with or relating to any future period (including in connection with any claim for anticipatory breach, any claim in a proceeding in connection with an Insolvency Event of Default where this Agreement is disclaimed, or in connection with the frustration, fundamental breach or termination of this Agreement other than in accordance with Section 4.1), such Losses shall include the net present value of the Refined Copper that would have reasonably been expected to have become due to be delivered by Seller to Purchaser hereunder and all other amounts that would have reasonably been expected to have become payable to Purchaser hereunder (including any amounts payable pursuant to Section 4.2), but for the event giving rise to the need to determine such Losses, less the payments that would have reasonably been expected to have become payable to Seller by Purchaser with respect to such Refined Copper, all determined in accordance with Schedule F (the “Stream NPV”). The Stream NPV shall be based on the principles, assumptions and procedures set forth on Schedule F. |
| Section 9.4 | Disputed Reports |
| (1) | Any invoice or report provided pursuant to Section 5.1 and all deliveries of Refined Copper under this Agreement shall be deemed final and conclusive for all purposes with no adjustments, revisions or obligation to deliver any additional Refined Copper or return any delivered Reference Copper, or make or return any additional payment in respect of delivered Reference Copper, unless either Party notifies the other in writing (a “Dispute Notice”) that it disputes an invoice, report or quantity of Refined Copper previously delivered within three years from the date of delivery of such invoice, report or quantity of Refined Copper. |
| (2) | Purchaser and Seller shall have 60 days from the date the Dispute Notice is delivered to resolve the dispute. If Purchaser and Seller have not resolved the dispute within such period, then Purchaser shall have the right to require Seller to deliver an Auditor’s Report with respect to the subject matter of the dispute. Each of the parties agrees to deliver such Books and Records as may be reasonably requested by the Person completing the Auditor’s Report. |
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| (3) | The costs of the Auditor’s Report shall be paid by Purchaser, unless the Auditor’s Report concludes that the Reference Copper for the period covered by the Dispute Notice is greater than the number of tonnes of Refined Copper actually delivered in respect of such period, in which event the cost of the Auditor’s Report shall be for the account of Seller. |
| Section 9.5 | Disputes |
If a Dispute arises between the Parties (and for this purpose any of the Seller Group Entities involved in the Dispute shall be deemed to be one Party, and Purchaser the other Party), including with respect to an Auditor’s Report, the Parties shall promptly and in good faith attempt to resolve such Dispute through negotiations conducted in the following manner:
| (a) | the disputing Party shall give written notice to the other Parties to the Dispute, which notice shall include a statement of the disputing Party’s position and a summary of the arguments supporting its position; |
| (b) | within 20 days after receipt of such notice, each receiving Party shall submit a written response to the disputing Party which shall also include a statement of the receiving Party’s position and a summary of the arguments supporting its position; |
| (c) | the Chief Executive Officer or President of each of the Parties to the Dispute shall meet at a mutually acceptable time and place, but in any event within 30 days after issuance of the disputing Party’s written notice to attempt to resolve the Dispute; and |
| (d) | if the Dispute has not been resolved within ten days after such meeting, it shall be settled by binding arbitration administered by the International Center for Dispute Resolution, and any Party may so refer such dispute, controversy or claim to binding arbitration. Such referral to binding arbitration shall be to one qualified arbitrator in accordance with the Arbitration Rules, which Arbitration Rules shall govern such arbitration proceeding. The place of arbitration shall be London, England, and the language of arbitration shall be English. The determination of such arbitrator shall be final and binding upon the Parties and the costs of such arbitration shall be as determined by the arbitrator. Judgment on the award may be entered in any court having jurisdiction. The Parties covenant and agree that they shall conduct all aspects of such arbitration having regard at all times to expediting the final resolution of such arbitration. This Section 9.5 shall not preclude the Parties from seeking provisional remedies in aid of arbitration from a court of competent jurisdiction. |
| (e) | The provisions of this Agreement providing for the resolution of Disputes shall not operate to prevent recourse to any court by Purchaser with respect to injunctions, receiving orders and orders regarding the detention, preservation and inspection of property, including the Mining Properties or any part(s) thereof, or whenever enforcement of an arbitration award reasonably requires access to any remedy which an arbitrator has no power to award or enforce. Each Seller Group Entity expressly attorns to such proceedings and waives any objections on the basis of jurisdiction, including forum non conveniens. |
| Section 9.6 | Insolvency Event |
The Parties acknowledge and agree that, if, as a result of any Insolvency Event of Default affecting any Seller PSA Entity, a Governmental Authority of competent jurisdiction permits such Seller PSA Entity to repudiate its obligations under this Agreement, such repudiation will not affect the obligations of the other Seller Group Entities, and this Agreement will remain in full force with respect to the other Seller Group Entities.
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ARTICLE 10
ADDITIONAL PAYMENT TERMS
| Section 10.1 | Payments |
All cash payments due by one Party to another under this Agreement shall be made in U.S. dollars and shall be made by wire transfer in immediately available funds to the bank account or accounts designated by the other Party in writing from time to time.
| Section 10.2 | Taxes |
| (1) | All deliveries of Refined Copper and all amounts paid or retained hereunder by the Seller PSA Entities to Purchaser shall be made without any deduction, withholding, charge or levy for or on account of any Taxes, all of which shall be for the account of the Party making such delivery or payment. If any such Taxes are so required to be deducted, withheld, charged or levied by the Seller PSA Entity making such delivery or payment, then (i) Seller shall make, in addition to such delivery or payment, such additional delivery or payment as is necessary (“Additional Amounts”) to ensure that the net amount received by Purchaser (free and clear and net of any such Taxes, including any Taxes required to be deducted, withheld, charged or levied on any such additional amount) equals the full amount Purchaser would have received had no such deduction, withholding, charge or levy been required and (ii) the Seller PSA Entities shall pay the full amount deducted to the relevant taxation or other authority in accordance with Applicable Law; provided, however, that no such Additional Amount shall be made in respect of Taxes to the extent such Taxes are Excluded Taxes. |
| (2) | If Purchaser becomes liable for any Tax, other than Excluded Taxes, imposed on any deliveries or payments under this Agreement, the Seller PSA Entities shall jointly and severally agree to indemnify Purchaser for such Tax, and the indemnity payment shall be increased as necessary so that after the imposition of any Tax on the indemnity payment (including Tax in respect of any such increase in the indemnity payment), Purchaser shall receive the full amount of Taxes for which it is liable, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Seller by Purchaser shall be conclusive absent manifest error. |
| (3) | If Purchaser is entitled to an exemption from or reduction of Taxes under the law of the jurisdiction in which Seller is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to any payments made in respect of this Agreement, Purchaser shall, at the request of Seller, deliver to Seller, at the time or times prescribed by Applicable Law or reasonably requested by Seller, such properly completed and executed documentation prescribed by Applicable Law (if any) as will permit such payments to be made without withholding or at a reduced rate of withholding Taxes. In addition, Purchaser, if requested by Seller, shall deliver such other documentation prescribed by Applicable Law (if any) or reasonably requested by Seller as will enable Seller to determine whether or not Purchaser is subject to withholding or information reporting requirements. Notwithstanding the foregoing, Purchaser shall not be required to deliver any documentation pursuant to this Section that Purchaser is not legally able to deliver. |
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| (4) | If Purchaser determines, in its sole discretion, acting reasonably, that it has received a refund of any Taxes as to which it has received additional deliveries pursuant to Section 10.2(1) or additional payments pursuant to Section 10.2(2), it shall pay to Seller an amount equal to such refund (but only to the extent of additional deliveries made, or additional amounts paid, by Seller under this Section 10.2 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of Purchaser, as the case may be, and without interest (other than any net after-Tax interest paid by the relevant Governmental Authority with respect to such refund). Seller, upon the request of Purchaser, agrees to repay to Purchaser the amount paid by or to Seller (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if Purchaser is required to repay such refund to such Governmental Authority. This Section 10.2(4) shall not be construed to require Purchaser to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to Seller or any other Person, to arrange its affairs in any particular manner or to claim any available refund or reduction. |
| Section 10.3 | New Tax Laws |
In the event that (i) any new Tax is implemented, (ii) there shall occur any revision in, implementation of, amendment to or interpretation of any existing Tax, (in each of (i) or (ii) that has an adverse effect on any of the Parties or any of their Affiliates in respect of the transactions contemplated by this Agreement), or (iii) either Party shall identify changes to the ownership structure of the Seller Group Entities on the one hand or Purchaser or its Affiliates on the other hand, that will materially enhance the economic benefit they enjoy from this Agreement, then Seller on the one hand, and Purchaser on the other hand, agree that they shall negotiate in good faith with each other to amend this Agreement so that the other Parties and their Affiliates either are no longer adversely affected by any such enactment, revision, implementation, amendment or interpretation, or can achieve the material enhancement to the economic benefit they enjoy from this Agreement, as the case may be; provided that any amendment to this Agreement shall not have any adverse impact on Seller and its Affiliates on the one hand, or Purchaser and its Affiliates on the other hand.
| Section 10.4 | Interest |
| (1) | The dollar value of any overdue deliveries from time to time outstanding (such value, for the purposes of calculating interest, to be determined based on the Copper Market Price on the day such deliveries were due hereunder) shall bear interest at rate equal to Base Interest Rate plus 2% per annum taking into account the actual number of days occurring during the period commencing as of the date such deliveries first became past due and ending on the date such deliveries are made and accrued interest is paid in full. |
| (2) | Without duplicating interest payable in accordance with Section 10.4(1), any dollar amount not paid when due shall bear interest at rate equal to Base Interest Rate plus 2% per annum taking into account the actual number of days occurring during the period commencing as of the date such amount first became past due (which shall be deemed to be the date of termination of this Agreement in the event an amount is owed as a result of Section 9.2(1)(c) and the date any Loss is first suffered or incurred in the event an amount is owed as a result of Section 9.3(1)) and ending on the date such payment and accrued interest are paid in full. |
| (3) | Interest owing under Section 10.4(1) and Section 10.4(2) shall be immediately payable on demand and be calculated on the basis of a year of 360 days. If unpaid, interest owing under Section 10.4(1) and Section 10.4(2) will be compounded with the overdue amount at the end of each month but will remain immediately due and payable on demand. The rate of interest payable on such late deliveries or payments will change simultaneously with changes in the Base Interest Rate from time to time. |
| Section 10.5 | Set Off |
Except as set out in Section 2.2, any Refined Copper or dollar amount not delivered or paid, as the case may be, when due by a Party may be set off by the other Party against any dollar amount or Refined Copper owed to such Party by the other Party. Any amount of Refined Copper set off and withheld by Seller against any non-payment by Purchaser, including any failure to pay for Refined Copper when due in accordance with Section 2.5(2), shall be valued at the Copper Market Price as of the date that such amount of Refined Copper first became payable to Purchaser. Any dollar amount set off and withheld against any Refined Copper shall result in a reduction in an amount of Refined Copper otherwise to be delivered by that number of tonnes equal to the dollar amount set-off divided by the Copper Market Price as of the day such dollar amount first became payable.
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| Section 10.6 | Judgment Currency. |
If, for the purpose of obtaining or enforcing judgment against any party in any court in any jurisdiction, it becomes necessary to convert into a particular currency (the “Judgment Currency”) an amount due in another currency (the “Indebtedness Currency”) under this Agreement, that conversion will be made at the rate of exchange, which shall be that at which, in accordance with its normal banking procedures, the non-defaulting party could purchase the Indebtedness Currency with the Judgment Currency on the Business Day immediately preceding the date on which judgment is given (or if received on a day other than a Business Day, on the next succeeding Business Day), or, if permitted by law, on the day on which the judgment is paid or satisfied (the “Rate of Exchange”). If, as a result of a change in the Rate of Exchange between the date of judgment and the date of actual payment, the conversion of the Judgment Currency into Indebtedness Currency results in the non-defaulting party receiving less than the full amount of Indebtedness Currency payable to the non-defaulting party, the defaulting party agrees to pay the non-defaulting party an additional amount (and in any event not a lesser amount) as may be necessary to ensure that the amount received is not less than the full amount of Indebtedness Currency payable by the defaulting party on the date of judgment. Any additional amount due under this Section 10.6 will be due as a separate debt, gives rise to a separate cause of action, and will not be affected by judgment obtained for any other sums due under this Agreement.
ARTICLE 11
GENERAL
| Section 11.1 | Further Assurances |
Each Party shall execute all such further instruments and documents and do all such further actions as may be necessary to effectuate the documents and transactions contemplated in this Agreement, in each case at the cost and expense of the Party requesting such further instrument, document or action, unless expressly indicated otherwise.
| Section 11.2 | No Joint Venture |
Nothing herein shall be construed to create, expressly or by implication, a joint venture, mining partnership, commercial partnership, agency relationship, fiduciary relationship, or other partnership relationship between Purchaser and the Seller PSA Entities.
| Section 11.3 | Governing Law |
| (1) | This Agreement shall be governed by, and construed in accordance with, the laws of New South Wales, Australia. |
| (2) | The United Nations Vienna Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. |
| Section 11.4 | Costs and Expenses |
Seller shall pay (i) all reasonable fees, charges and disbursements of counsel in each applicable jurisdiction incurred by Purchaser in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Copper Stream Documents, the registration and perfection of Security in accordance with this Agreement (including any stamp duty or taxes and any request or demand under the PPSA) and any actual or proposed amendments, modifications or waivers of the provisions of any Copper Stream Document, (ii) all out of pocket costs and expenses incurred by Purchaser, including the fees, charges and disbursements of counsel, in connection with the enforcement of, or preservation of any of its rights under, this Agreement and the other Copper Stream Documents, including all such costs and expenses incurred during any workout, restructuring or negotiations in respect of the transactions contemplated under the Copper Stream Documents, and (iii) all reasonable out of pocket costs and expenses incurred by Purchaser (solely in its capacity as such), including the fees, charges and disbursements of counsel, in connection with any Change of Control or any other transfer of Equity Interests of, or corporate reorganization involving, any Seller PSA Entity.
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| Section 11.5 | Survival |
Without limiting any other provision of this Agreement, the following provisions shall survive termination of this Agreement: Section 4.2, Section 5.2, Section 5.5, Section 7.1, Section 9.2, Section 9.3, Section 9.4, Section 9.5, Section 9.6, Section 10.1, Section 10.2, Section 10.4, Section 10.5, Section 10.6, Section 11.4 and such other provisions of this Agreement as are required to give effect thereto.
| Section 11.6 | Notices |
| (1) | Any notice or other communication (in each case, a “notice”) required or permitted to be given hereunder shall be in writing and shall be delivered by hand, prepaid courier or transmitted by electronic mail transmission (if available) addressed to: |
| (a) | If to Seller, to: |
[***]
Attention: [***]
Email: [***]
| (b) | If to MAC Australia, to: |
c/o Squire Patton Boggs
Level 21, 300 Murray St.
Perth WA 6000
Attention: Chris Rosario
Email: chris.rosario@squirepb.com
| (c) | If to Purchaser, to: |
[***]
Attention: [***]
E-mail: [***]
with respect to any notices pursuant to Section 2.4, with a copy by electronic mail to (which shall not constitute notice):
Email: [***]
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| (2) | Any notice will be deemed to have been given and received: |
| (a) | if delivered by hand or courier in accordance with Section 11.6(1), then on the day of delivery to the recipient Party if such date is a Business Day and such delivery is received before 4:00 pm at the place of delivery otherwise such notice will be deemed to have been given and received on the first Business Day following the date of delivery; and |
| (b) | if sent by email transmission in accordance with Section 11.6(1) and successfully transmitted prior to 4:00 pm on a Business Day (recipient Party time), then on that Business Day, and if successfully transmitted after 4:00 pm or if transmitted on a day that is not a Business Day then such notice will be deemed to be given and received on the first Business Day immediately following the date of transmission. |
Either Party may change its email or physical address for delivery of notices from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the Party at its changed address.
| Section 11.7 | Press Releases |
The Parties shall jointly plan and co-ordinate, and shall cause their respective Affiliates to jointly plan and co-ordinate, any public notices, press releases, and any other publicity concerning this Agreement and the transactions contemplated by this Agreement unless a Party (or its Affiliate) is required to make such disclosure pursuant to Applicable Law in circumstances where prior consultation with the other Party is not practicable. To the extent reasonably practicable, a copy of such disclosure shall be provided to the other Party at such time as it is made publicly available.
| Section 11.8 | Amendments |
This Agreement may not be changed, amended or modified in any manner, except pursuant to an instrument in writing signed on behalf of each of Seller and Purchaser, and the other Seller PSA Entities shall be deemed to have consented to any change, amendment or modification to any provision of this Agreement so agreed to by Seller and Purchaser.
| Section 11.9 | Beneficiaries |
This Agreement is for the sole benefit of the Parties and their successors and permitted assigns and, except as expressly contemplated herein, nothing herein is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature or kind whatsoever under or by reason of this Agreement.
| Section 11.10 | Entire Agreement |
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and cancels and supersedes any prior understandings and agreements between the Parties with respect thereto.
| Section 11.11 | Waivers |
Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the Party giving it, and only in the specific instance and for the specific purpose for which it has been given. No failure on the part of any Party to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any such right shall preclude any other or further exercise of such right or the exercise of any other right.
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| Section 11.12 | Assignment |
This Agreement shall enure to the benefit of and shall be binding on and enforceable by the Parties and their respective successors and permitted assigns. The Seller PSA Entities shall not Transfer all or any part of this Agreement without the prior written consent of Purchaser. Purchaser shall be entitled at any time and from time to time to Transfer all or any part of this Agreement without the prior written consent of the other Parties. Purchaser shall be entitled at any time and from time to time to grant or allow to exist an Encumbrance in respect of this Agreement in favour of its lenders. Notwithstanding the foregoing, this Agreement may not be transferred in whole or in part to a Sanctioned Person.
| Section 11.13 | Invalidity and Unenforceability |
If a provision of this Agreement is wholly or partially invalid or unenforceable in a jurisdiction:
| (a) | it is to be read down or severed in that jurisdiction to the extent of the invalidity or unenforceability; and |
| (b) | that fact does not affect the validity or enforceability of that provision in another jurisdiction or the remaining provisions. |
It is hereby declared to be the intention of the Parties that this Agreement would have been executed without reference to any portion which may, for any reason, hereafter be declared or held invalid.
| Section 11.14 | PPSA Provisions |
| (1) | Where Purchaser has a security interest (as defined in the PPSA) under any Copper Stream Document, to the extent the law permits: |
| (a) | for the purposes of sections 115(1) and 115(7) of the PPSA: |
| (i) | Purchaser need not comply with section 95, 118, 121(4), 125, 130, 132(3)(d) or 132(4) of the PPSA; and |
| (ii) | sections 142 and 143 of the PPSA are excluded; |
| (b) | for the purposes of section 115(7) of the PPSA, Purchaser need not comply with sections 132 and 137(3); |
| (c) | each Party waives its right to receive from Purchaser any notice required under the PPSA (including a notice of a verification statement); |
| (d) | if Purchaser exercises a right, power or remedy in connection with that security interest, that exercise is taken not to be an exercise of a right, power or remedy under the PPSA unless Purchaser states otherwise at the time of exercise. However, this Section 11.14 does not apply to a right, power or remedy which can only be exercised under the PPSA; and |
| (e) | if the PPSA is amended to permit the Parties to agree not to comply with or to exclude other provisions of the PPSA, Purchaser may notify the Seller PSA Entities that any of these provisions is excluded, or that Purchaser need not comply with any of these provisions. |
This does not affect any rights a person has or would have other than by reason of the PPSA and applies despite any other section in any Copper Stream Document.
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| (2) | Whenever Purchaser requests a Seller PSA Entity to do anything: |
| (a) | to ensure any security interest (as defined in the PPSA) arising pursuant to a Copper Stream Document or other Encumbrance created under any Copper Stream Document is fully effective, enforceable and perfected with the contemplated priority; |
| (b) | for more satisfactorily assuring or securing to Purchaser the property the subject of any such security interest or other Encumbrance in a manner consistent with the Copper Stream Documents; or |
| (c) | for aiding the exercise of any power in respect of any such security interest or other Encumbrance in any Copper Stream Document, |
the Seller PSA Entity shall do it promptly at its own cost. This may include obtaining consents, signing documents, getting documents completed and signed and supplying information, delivering documents and evidence of title and executed blank transfers, or otherwise giving possession or control with respect to any property the subject of any security interest or Encumbrance.
| Section 11.15 | Counterparts |
This Agreement may be executed in one or more counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. delivery of an executed counterpart of a signature page to this Agreement by electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement.
[The remainder of this page was intentionally left blank]
IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first written above.
| OSISKO BERMUDA LIMITED | ||
| Per: | /s/ Michael Spencer | |
| Name: Michael Spencer | ||
| Title: Managing Director | ||
| METALS ACQUISITION LIMITED | ||
| Per: | /s/ Mick McMullen | |
| Name: Mick McMullen | ||
| Title: Chief Executive Officer | ||
| METALS ACQUISITION CORP | ||
| Per: | /s/ Jaco Crouse | |
| Name: Jaco Crouse | ||
| Title: Chief Financial Officer | ||
| Executed by Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) in accordance with section 127 of the Corporations Act 2001 (Cth): | |||
| /s/ Mick McMullen | /s/ Jaco Crouse | ||
| Signature of director | Signature of company secretary/director | ||
| Mick McMullen | Jaco Crouse | ||
| Full name of director who states that they are a director of Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) | Full name of company secretary/director who states that they are a company secretary/director of Metals Acquisition Corp. (Australia) Pty Ltd (ACN 657 799 758) |
Exhibit 10.4
CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL,
AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into on March 20, 2023, by and among Metals Acquisition Limited, a private limited company newly incorporated under the laws of Jersey, Channel Islands (the Issuer”), Metals Acquisition Corp, a Cayman Islands exempted company (the “Company”), and the subscriber named on the signature page hereto (“Subscriber”).
WHEREAS, pursuant to, and upon the terms and subject to the conditions set forth in, the Share Sale Agreement dated as of March 17, 2022, as amended by the Deed of Consent and Covenant, dated as of November 22, 2022 (as may be amended, supplemented, or otherwise modified from time to time, the “Share Sale Agreement”), by and among the Issuer, the Company, Metals Acquisition Corp. (Australia) Pty Ltd, an Australian private company (“MAC-Sub”) and Glencore Operations Australia Pty Limited, an Australian private company (“Glencore”), the following transactions (collectively, the “Transaction”) will occur on the Closing Date (as defined below), subject to the consummation of the Merger (as defined below): (i) MAC-Sub will acquire from Glencore 100% of the issued share capital of Cobar Management Pty Limited, an Australian private company (“CMPL”); (ii) the Issuer and/or the Company will pay at least $775,000,000 (with the potential to be scaled up to $875,000,000 depending on equity demand) to Glencore; (iii) the Issuer will issue up to 10,000,000 of the Issuer’s ordinary shares of a par value of $0.0001 per share (the “Ordinary Shares”) to Glencore (with Glencore having the option to scale down to none subject to the Company and the Issuer raising sufficient equity); (iv) Glencore will be entitled to a $75,000,000 deferred cash payment tied to a future equity raise, which may be converted into additional equity; (v) Glencore will be entitled to two separate $75,000,000 contingent payments tied to future copper prices; and (vi) the Issuer and MAC-Sub will enter into a net smelter royalty pursuant to which after the Closing (as defined below), CMPL will pay to Glencore a royalty of 1.5% of all net smelter copper concentrate produced from the mining tenure held by CMPL at the time of the Closing; and
WHEREAS, in connection with the Transaction, pursuant to that certain Plan of Merger (the “Plan of Merger”), prior to the Closing Date (the “Effective Time”), the Company will be merged with and into the Issuer (the “Merger”), with the Issuer continuing as the surviving company (the “Issuer”) and CMPL being an indirect subsidiary of the Issuer following the Transaction; and
WHEREAS, in connection with the Transaction, on or about the date of this Subscription Agreement, Subscriber has entered into a copper purchase agreement, among Subscriber, the Company, the Issuer and MAC-Sub (the “Copper Purchase Agreement”), which is expected to be consummated immediately prior to or substantially concurrently with, and contingent upon, the consummation of the Transaction, pursuant to which the Subscriber has agreed to make available to the Issuer a cash deposit of up to $75,000,000 (the “Available Copper Deposit”) and stapled equity investment of up to $25,000,000 (the “Available Subscription Amount”) in the Issuer, drawable at the Issuer’s sole discretion in any proportion of the total Available Copper Deposit and total Available Subscription Amount, on a pro-rata basis, upon issue of notice from the Issuer in accordance with the terms of the Copper Purchase Agreement. The proportion of the Available Copper Deposit and the Available Subscription Amount elected to be drawn down by the Issuer in accordance with the Copper Purchase Agreement being the ‘Elected Deposit Percentage’ (the “Elected Deposit Percentage”); and
WHEREAS, in connection with the Transaction and in accordance with the Copper Purchase Agreement, Subscriber desires to subscribe for and purchase from the Issuer, immediately prior to or substantially concurrently with, and contingent upon, the consummation of the Transaction, that number of the Ordinary Shares as is equal to the Available Subscription Amount multiplied by the Elected Deposit Percentage (the “Subscription Amount”) and then divided by the purchase price of $10.00 per share with any fractional entitlement rounded up (the “Per Share Subscription Price”) (the “Subscribed Shares”), and the Issuer desires to issue and sell to Subscriber the Subscribed Shares in consideration of the payment of the Subscription Amount by or on behalf of Subscriber to the Issuer; and
WHEREAS, substantially concurrently with and following the execution of this Subscription Agreement, the Issuer and the Company will enter into subscription agreements (the “Other Subscription Agreements” and, together with this Subscription Agreement, the “Subscription Agreements”) with certain other accredited investors (the “Other Subscribers” and, together with Subscriber, the “Subscribers”), which are on substantially the same terms as the terms of this Subscription Agreement (other than the amount of Ordinary Shares to be subscribed for and purchased by the Other Subscribers), pursuant to which such investors shall agree to purchase on the closing date of the Transaction (the “Closing Date”) Ordinary Shares (the “Other Subscribed Shares” and, together with the Subscribed Shares, the “Aggregate Subscribed Shares”).
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Subscription. Subject to the terms and conditions hereof, Subscriber hereby subscribes for and agrees to purchase at the Closing (as defined below), and the Issuer hereby agrees to issue and sell to Subscriber, upon the payment of the Subscription Amount, the Subscribed Shares (such subscription and issuance, the “Subscription”). The Issuer hereby expressly covenants and agrees that the Subscription Amount shall be used exclusively for the Transaction or after the consummation thereof by the Issuer and its subsidiaries (including CMPL) for working capital and other corporate purposes.
| 2. | Closing. |
(a) The consummation of the Subscription (the “Closing”) shall be contingent upon the Merger and the consummation of the Copper Purchase Agreement, and shall be contingent upon and occur on the Closing Date immediately prior to or concurrently with, the consummation of the Transaction.
(b) On the later of the date that is at least fifteen (15) Business Days before the anticipated Closing Date and the date that notice of the Elected Deposit Percentage is given under, and in accordance with, the Copper Purchase Agreement , the Issuer shall deliver written notice to Subscriber (the “Closing Notice”) specifying (i) the anticipated Closing Date and (ii) the wire instructions for delivery of the Subscription Amount to the Escrow Agent (as defined below). No later than three (3) Business Days after receiving the Closing Notice, Subscriber shall deliver to the Escrow Agent such information as is reasonably requested in the Closing Notice in order for the Issuer to issue the Subscribed Shares to Subscriber. At least four (4) Business Days prior to the expected Closing Date specified in the Closing Notice, Subscriber shall deliver to Continental Stock Transfer & Trust Company or such other entity as is reasonably agreed to by the parties, as escrow agent (the “Escrow Agent”), the Subscription Amount which shall be held in a segregated escrow account for the benefit of the Subscriber (the “Escrow Account”) until the Closing pursuant to the terms of a customary escrow agreement, which shall be on the terms and conditions reasonably satisfactory to the Subscriber to be entered into by the Issuer and the Escrow Agent (the “Escrow Agreement”), in cash via wire transfer to the account specified in the Closing Notice. At the Closing, the Issuer shall issue the Subscribed Shares to Subscriber and cause the Subscribed Shares to be registered in book entry form, free and clear of any liens or other restrictions (other than those arising under this Subscription Agreement or state or federal securities laws), in the name of Subscriber (or its nominee in accordance with its delivery instructions) or to a custodian designated by Subscriber, as applicable. In the event that the consummation of the Transaction does not occur within ten (10) Business Days after the anticipated Closing Date specified in the Closing Notice, the Escrow Agent (or the Issuer, if the Subscription Amount has been released by the Escrow Agent) shall promptly (but in no event later than ten (10) Business Days after the anticipated Closing Date specified in the Closing Notice) return the funds so delivered by Subscriber to the Escrow Agent by wire transfer in immediately available funds to the account specified by Subscriber; provided that, unless this Subscription Agreement has been validly terminated pursuant to Section 7 hereof, neither the failure of the Closing to occur on the Closing Date specified in the Closing Notice nor such return of funds shall (x) terminate this Subscription Agreement, (y) be deemed to be a failure of any of the conditions to Closing set forth in this Section 2, or (z) otherwise relieve any party of any of its obligations hereunder, including Subscriber’s obligation to redeliver the Subscription Amount and purchase the Subscribed Shares at the Closing in the event the Issuer delivers a subsequent Closing Notice. For the purposes of this Subscription Agreement, “Business Day” means any day other than a Saturday, Sunday or a day on which the Federal Reserve Bank of New York is closed. Prior to or at the Closing, Subscriber shall, if required, deliver to the Company a duly completed and executed Internal Revenue Service Form W-9 or appropriate Form W-8.
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(c) The Closing shall be subject to the satisfaction or valid waiver (to the extent a valid waiver is capable of being issued) by the party (the Issuer and the Company, on the one hand, or Subscriber, on the other) entitled to the benefit thereof, of the conditions that, on or prior to the Closing Date:
(i) the Subscribed Shares shall have been approved for listing on the New York Stock Exchange (the “NYSE”) or the Nasdaq Stock Market LLC (“Nasdaq”), subject to official notice of issuance, and no suspension of the qualification of the Subscribed Shares for offering or sale or trading on NYSE or Nasdaq, or, to the Issuer’s knowledge, initiation or threatening of any proceedings for any of such purposes, shall have occurred;
(ii) all conditions precedent to the closing of the Transaction set forth in the Share Sale Agreement, including, without limitation, the required approval of the Company’s shareholders, shall have been satisfied (as determined by the parties to the Share Sale Agreement, and other than those conditions which, by their nature, are to be satisfied at the closing of the Transaction, but subject to satisfaction or waiver thereof by the party entitled to the benefit thereof under the Share Sale Agreement, including to the extent that any such condition is dependent upon the consummation of the purchase and sale of the Aggregate Subscribed Shares pursuant to the Subscription Agreements) or waived in writing by the party entitled to the benefit thereof under the Share Sale Agreement; and
(iii) no governmental authority shall have enacted, issued, promulgated, enforced or entered any judgment, order, law, rule or regulation (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or otherwise restraining, prohibiting or enjoining consummation of the transactions contemplated hereby (except in the case of a governmental authority located outside the United States where such judgment, order, law, rule or regulation would not be reasonably expected to have a Company Material Adverse Effect (as defined below)).
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(d) The obligation of each of the Issuer and the Company to consummate the Closing shall be subject to the satisfaction or valid waiver by the Issuer and the Company of the additional conditions that, on or prior to the Closing Date:
(i) all representations and warranties of Subscriber contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date (other than (x) representations and warranties that are qualified as to materiality or Subscriber Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects or (y) representations and warranties that speak as of a specified earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or Subscriber Material Adverse Effect, which representations shall be true and correct in all respects) as of such specified date), in each case without giving effect to the consummation of the Transaction, and consummation of the Closing shall constitute a reaffirmation by Subscriber of each of the representations and warranties of Subscriber contained in this Subscription Agreement as of the Closing;
(ii) Subscriber shall have wired the Subscription Amount in accordance with Section 2(b) of this Subscription Agreement and otherwise performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing; and
(iii) Subscriber shall have provided to the Issuer and the Company the information requested in Annex A hereto.
(e) The obligation of Subscriber to consummate the Closing shall be subject to the satisfaction or valid waiver by Subscriber of the additional conditions that, on or prior to the Closing Date:
(i) all representations and warranties of the Issuer and the Company contained in this Subscription Agreement are true and correct in all material respects at and as of the Closing Date (other than (A) representations and warranties that are qualified as to materiality or Company Material Adverse Effect (as defined below), which representations and warranties shall be true in all respects or (B) representations and warranties that speak as of a specified earlier date, which representations and warranties shall be true and correct in all material respects (or, if qualified by materiality or Company Material Adverse Effect, which representations shall be true and correct in all respects) as of such specified date), in each case without giving effect to the consummation of the Transaction, and consummation of the Closing shall constitute a reaffirmation by the Issuer and the Company of each of the representations and warranties of the Issuer and the Company, respectively, contained in this Subscription Agreement as of the Closing; provided that in the event this condition would otherwise fail to be satisfied as a result of a breach of one or more of the representations and warranties of the Issuer or the Company contained in this Subscription Agreement and the facts underlying such breach would also cause a condition to Glencore’s obligations under the Share Sale Agreement to fail to be satisfied, this condition shall nevertheless be deemed satisfied in the event Glencore waives such condition with respect to such breach under the Share Sale Agreement;
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(ii) the Issuer and the Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Subscription Agreement to be performed, satisfied or complied with by it at or prior to the Closing, except where the failure of such performance, satisfaction or compliance would not or would not reasonably be expected to materially and adversely affect the economic benefits to Subscriber under this Subscription Agreement; and
(iii) there shall have been no amendment or modification of the Share Sale Agreement that materially and adversely affects the economic benefits to Subscriber under this Subscription Agreement without having received Subscriber’s prior written consent.
3. Issuer Representations and Warranties. For the purposes of this Section 3, the term “Issuer” shall refer to (i) the Issuer as of the date hereof, and (ii) for the for purposes of the representations contained in subsections (f), (h) and (k) of this Section 3 and to the extent such representations and warranties are made as of the Closing Date, the combined company after giving effect to the Transaction as of the Closing Date. The Issuer represents and warrants to Subscriber and the Placement Agents (as defined below) that as of the date hereof:
(a) The Issuer (i) has been duly incorporated and is validly existing as a private limited company in good standing under the laws of Jersey, Channel Islands, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect.
(b) As of the Closing Date, the Subscribed Shares will be duly authorized and, when issued and delivered to Subscriber against full payment therefor in accordance with the terms of this Subscription Agreement, will be validly issued.
(c) The Subscribed Shares are not, and following the Closing, will not be, subject to any Transfer Restriction. The term “Transfer Restriction” means any condition to or restriction on the ability of Subscriber to pledge, sell, assign or otherwise transfer the Subscribed Shares under any organizational document, policy or agreement of, by or with the Issuer, but excluding (i) the restrictions on transfer described in Section 5(e) of this Subscription Agreement with respect to the status of the Ordinary Shares as “restricted securities” pending their registration for resale under the Securities Act of 1933, as amended (the “Securities Act”), in accordance with the terms of this Subscription Agreement, and (ii) compliance with routine transfer registration provisions under the Issuer’s organizational documents and agreements and policies of the Issuer’s transfer agent.
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(d) This Subscription Agreement has been duly authorized, executed and delivered by the Issuer, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(e) The execution and delivery of this Subscription Agreement, the issuance and sale of the Subscribed Shares and the compliance by the Issuer with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Issuer pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of the property or assets of the Issuer is subject; (ii) the organizational documents of the Issuer; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Issuer or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
(f) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, the Issuer is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance of this Subscription Agreement (including, without limitation, the issuance of the Subscribed Shares), other than (i) filings required by applicable state securities laws, (ii) filings with the United States Securities and Exchange Commission (the “Commission”), including the filing of the Registration Statement pursuant to Section 6 below, (iii) filings required by the NYSE or, in the event the Company becomes listed on Nasdaq, Nasdaq, including with respect to obtaining approval of the Company’s shareholders, (iv) filings required to consummate the Transaction as provided under the Share Sale Agreement, (v) any filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or any law or regulation of any other jurisdiction related to competition or merger control, if applicable, (vi) those that will be obtained, made or given, as applicable, on or prior to the Closing, and (vii) consents, waivers, authorizations, orders, notices or filings, the failure of which to obtain would not reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on the Issuer’s legal authority to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Shares.
(g) As of the date hereof, the entire authorized share capital of the Company consists of 221,000,000 Ordinary Shares, consisting of 200,000,000 Class A ordinary shares, 20,000,000 Class B ordinary shares and 1,000,000 preference shares. As of the Closing Date (and immediately after the consummation of the Transaction), the entire authorized share capital of the Issuer will consist of 220,000,000 Ordinary Shares and 1,000,000 preference shares of a par value of $0.0001 per share.
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(h) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, no registration under the Securities Act is required for the offer and sale of the Subscribed Shares by the Issuer to Subscriber and the Subscribed Shares are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act or any state securities law.
(i) Neither the Issuer nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in violation of the Securities Act in connection with any offer or sale of the Subscribed Shares.
(j) Except for the Placement Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Issuer solely in connection with the sale of the Subscribed Shares to Subscriber.
(k) The Issuer has provided Subscriber an opportunity to ask questions regarding the Issuer and made available to Subscriber all the information reasonably available to the Issuer that Subscriber has reasonably requested to make an investment decision with respect to the Subscribed Shares.
(l) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, the Issuer is in compliance with all laws applicable to the conduct of its business. The Issuer has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Issuer is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(m) The Issuer has been formed for the purpose of consummating the Merger and, prior to the consummation of the Merger, maintains limited operations and does not employ any employees and does not maintain any employee benefit or stock option or similar equity incentive plans.
(n) As of the Closing Date, the issued and outstanding Ordinary Shares of the Issuer will be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and listed for trading on the NYSE or Nasdaq. There is no suit, action, claim, proceeding or investigation pending or, to the knowledge of the Issuer, threatened against the Issuer by the NYSE, Nasdaq or the Commission with respect to any intention by such entity to deregister the Ordinary Shares or to prohibit or terminate the listing of the Ordinary Shares on the NYSE or Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by the NYSE or Nasdaq, in connection with the Transaction.
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4. Company Representations and Warranties. For purposes of this Section 4, the term “Company” shall refer to (i) the Company as of the date hereof, and (ii) for purposes of the representations contained in subsections (d) and (h) of this Section 4 and to the extent such representations and warranties are made as of the Closing Date, the combined company after giving effect to the Transaction as of the Closing Date. The Company represents and warrants to Subscriber and the Placement Agents (as defined below) that as of the date hereof:
(a) The Company (i) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Cayman Islands, (ii) has the requisite corporate power and authority to own, lease and operate its properties, to carry on its business as it is now being conducted and to enter into and perform its obligations under this Subscription Agreement, and (iii) is duly licensed or qualified to conduct its business and, if applicable, is in good standing under the laws of each jurisdiction (other than its jurisdiction of incorporation) in which the conduct of its business or the ownership of its properties or assets requires such license or qualification, except, with respect to the foregoing clause (iii), where the failure to be in good standing would not reasonably be expected to have a Company Material Adverse Effect. For purposes of this Subscription Agreement, a “Company Material Adverse Effect” means any event, circumstance, change, development, effect or occurrence (collectively “Effect”) that, individually or in the aggregate with all other Effects, (a) is or would reasonably be expected to be materially adverse to the business, financial condition or results of operations of the Issuer or the Company and its subsidiaries, taken as a whole, provided, however, that a reduction or expected reduction in the operating cash flows of the Company of less than $250,000,000 in any fiscal year shall not be considered a Company Material Adverse Effect; or (b) would prevent, materially delay or materially impede the performance by the Issuer or the Company or its subsidiaries of their respective obligations under this Subscription Agreement, the Share Sale Agreement or the consummation of the Transaction before the Outside Date (as defined below); provided, however, that, in the case of clause (a), none of the following (or the effect of any of the following) shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a Company Material Adverse Effect: (i) any change or proposed change in applicable law (including subordinate legislation) or GAAP or IFRS, as applicable (including, in each case, the interpretation thereof) or changes in enforcement policies or official interpretations thereof or decisions of general applicability by any governmental entity, in each case, after the date of this Subscription Agreement; (ii) events, changes or conditions generally affecting the industries or geographic areas in which the Company and its subsidiaries operate, including the copper mining industry generally; (iii) any changes in general economic conditions, including changes in the credit, debt, securities, financial or capital markets (including changes in interest or exchange rates, prices of any security or market index or commodity or any disruption of such markets); (iv) declared or undeclared acts of war, armed hostilities, sabotage, civil unrest, protests, demonstrations, cyberattacks or terrorism, or any escalation or worsening of any such acts of war, armed hostilities sabotage, civil unrest, protests, demonstrations, cyberattacks or terrorism, or changes in global, national, regional, state or local political or social conditions; (v) any hurricane, tornado, flood, earthquake, mudslide, wildfire, natural disaster, epidemic, disease outbreak, pandemic (including, for the avoidance of doubt, the novel coronavirus, SARS-CoV-2 or COVID-19 and all related measures, strains and sequences) or other acts of God, (vi) any actions taken or not taken by the Issuer or the Company as required by this Subscription Agreement, the Share Sale Agreement or any other agreement executed and delivered in connection with the Transaction and specifically contemplated by the Share Sale Agreement, (vii) a government directive, sanction, order ban, rule or guideline in relation to any event (including a pandemic), (viii) a strike or industrial dispute which has as its result a national or statewide application, (ix) any fact, matter or circumstance disclosed in writing by or on behalf of Glencore to the Issuer or the Company prior to the date of this Subscription Agreement, (x) the unavailability (at commercially reasonable prices) of critical inputs required for the operation of CMPL's business supplied by third parties, (xi) any change or effect that is cured (including by payment of money) or ceases to exist on or before the Closing Date, (xii) any failure of CMPL and its subsidiaries, taken as a whole to meet any projections, forecasts, guidance, estimates or financial or operating predictions of revenue, earnings, cash flow or cash position (provided, that any Effect underlying such failure (except to the extent otherwise excluded by other clauses in this definition) may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur) or (xiii) any Effect attributable to the announcement or execution, pendency, negotiation, consummation or performance of this Subscription Agreement or the Transaction (including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, employees, licensors, providers, distributors, partners, investors, or other third parties related thereto), except in the cases of clauses (i) through (v), to the extent that the Company is materially and disproportionately affected thereby as compared with other participants in the industry in which the Company operates.
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(b) This Subscription Agreement has been duly authorized, executed and delivered by the Company, and assuming the due authorization, execution and delivery of the same by Subscriber, this Subscription Agreement shall constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
(c) The execution and delivery of this Subscription Agreement and the compliance by the Company with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Company pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; (ii) the organizational documents of the Company; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Company Material Adverse Effect.
(d) Assuming the accuracy of all of Subscriber’s representations and warranties set forth in Section 5 of this Subscription Agreement, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other person in connection with the execution, delivery and performance of this Subscription Agreement, other than (i) filings required by applicable state securities laws, (ii) filings with the United States Securities and Exchange Commission (the “Commission”), including the filing of the Registration Statement pursuant to Section 6 below, (iii) filings required by the NYSE or, in the event the Company becomes listed on Nasdaq, Nasdaq, including with respect to obtaining approval of the Company’s shareholders, (iv) filings required to consummate the Transaction as provided under the Share Sale Agreement, (v) any filing of notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or any law or regulation of any other jurisdiction related to competition or merger control, if applicable, (vi) those that will be obtained, made or given, as applicable, on or prior to the Closing, and (vii) consents, waivers, authorizations, orders, notices or filings, the failure of which to obtain would not reasonably be expected to have a Company Material Adverse Effect or have a material adverse effect on the Company’s legal authority to consummate the transactions contemplated hereby, including the issuance and sale of the Subscribed Shares.
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(e) Other than where the failure to timely file would not reasonably be expected to have a Company Material Adverse Effect, as of their respective dates, all reports required to be filed by the Company with the Commission (the “SEC Reports”) complied in all material respects with the applicable requirements in existence as of such dates of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, as of such dates, in the light of the circumstances under which they were made, not misleading. Except as disclosed in the SEC Reports, the financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.
(f) Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in violation of the Securities Act in connection with any offer or sale of the Subscribed Shares.
(g) Except for the Placement Agents, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Company solely in connection with the sale of the Subscribed Shares to Subscriber.
(h) The Company has provided Subscriber an opportunity to ask questions regarding the Company and made available to Subscriber all the information reasonably available to the Company that Subscriber has reasonably requested to make an investment decision with respect to the Subscribed Shares.
(i) Except for such matters as have not had and would not reasonably be expected to have a Company Material Adverse Effect, the Company is in compliance with all laws applicable to the conduct of its business. The Company has not received any written, or to its knowledge, other communication from a governmental entity that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(j) As of the date hereof, the Company’s issued and outstanding Class A ordinary shares (the “Company Shares”) are registered pursuant to Section 12(b) of the Exchange Act and listed for trading on the NYSE or Nasdaq. There is no suit, action, claim, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company by the NYSE or Nasdaq or the Commission with respect to any intention by such entity to deregister the Company Shares or to prohibit or terminate the listing of the Company Shares on the NYSE or Nasdaq, excluding, for the purposes of clarity, the customary ongoing review by the NYSE or Nasdaq in connection with the Transaction.
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(k) There are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any securities of the Company, other than (1) as set forth in the SEC Reports and (2) as contemplated by the Share Sale Agreement.
(l) The Company has not engaged in any “directed selling efforts” (within the meaning of Regulation S) with respect to the Subscribed Shares, and the Company and its affiliates has complied with the offering restrictions requirement of Regulation S. The Company is a “foreign issuer” as defined in Regulation S.
(m) Each of the Issuer and the Company covenant to the Subscriber that, except as disclosed herein, if an Other Subscription Agreement or any other side letter or similar agreement with any Other Subscriber, contains more favorable terms and/or conditions (as the case may be) than the terms and/or conditions contained in this Subscription Agreement, then the terms and conditions of this Subscription Agreement shall be, without any further action by the Subscriber, the Issuer or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Subscriber shall receive the benefit of such more favorable terms and/or conditions (as the case may be) set forth in such Other Subscription Agreement, side letter or similar agreement and the Issuer or the Company will notify Subscriber within three (3) calendar days following acceptance of the Subscriber’s subscription by the Issuer and the Company of any such amended or modified term or condition; provided that upon written notice to the Issuer and the Company, at any time, the Subscriber may elect not to accept the benefit of any or all of such amended or modified terms or conditions, in which event any such terms or conditions not accepted shall be deemed not to have amended or modified this Subscription Agreement; provided, that Subscriber acknowledges that certain Subscribers purchasing a significant portion of the Aggregate Subscribed Shares have the additional right to receive a number of Class B ordinary shares of the Company from Green Mountain Metals LLC, a Cayman Islands limited liability company and the sponsor of the Company.
5. Subscriber Representations and Warranties. Subscriber represents and warrants to the Issuer and the Company and the Placement Agents that as the date hereof:
(a) Subscriber (i) is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and (ii) has the requisite power and authority to enter into and perform its obligations under this Subscription Agreement.
(b) This Subscription Agreement has been duly executed and delivered by Subscriber, and assuming the due authorization, execution and delivery of the same by the Issuer and the Company, this Subscription Agreement shall constitute the valid and legally binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors generally and by the availability of equitable remedies.
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(c) The execution and delivery of this Subscription Agreement, the purchase of the Subscribed Shares and the compliance by Subscriber with all of the provisions of this Subscription Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of Subscriber pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Subscriber is a party or by which Subscriber is bound or to which any of the property or assets of Subscriber is subject; (ii) the organizational documents of Subscriber; or (iii) any statute or any judgment, order, rule or regulation of any court or governmental agency or body, domestic or foreign, having jurisdiction over Subscriber or any of its properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a Subscriber Material Adverse Effect. For purposes of this Subscription Agreement, a “Subscriber Material Adverse Effect” means an event, change, development, occurrence, condition or effect with respect to Subscriber that would reasonably be expected to have a material adverse effect on Subscriber’s ability to timely consummate the transactions contemplated hereby, including the purchase of the Subscribed Shares.
(d) (i) If Subscriber is located in the United States or is a U.S. person, Subscriber (A) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3), (7), (9) or (12) under the Securities Act), in either case satisfying the applicable requirements set forth on Annex A hereto and an “institutional account” as defined in FINRA Rule 4512(c), and is not an entity formed for the specific purpose of acquiring the Subscribed Shares and is an “institutional account” as defined by FINRA Rule 4512(c) and a sophisticated institutional investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) is a sophisticated investor, experienced in investing in private equity transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, (C) has exercised independent judgment in evaluating its participation in the purchase of the Subscribed Shares, (D) is acquiring the Subscribed Shares only for its own account and not for the account of others, or if Subscriber is subscribing for the Subscribed Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a qualified institutional buyer or an institutional accredited investor and Subscriber has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (E) is not acquiring the Subscribed Shares with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act (and has provided the Company with the requested information on Annex A), and (F) understands that the offering meets the exemptions from filing under FINRA Rules 5123(b)(1)(A), (C) and (J); and (ii) if located outside the United States and not a U.S. person, (A) Subscriber is acquiring the Subscribed Shares in an "offshore transaction" meeting the requirements of Rule 903 of Regulation S under the Securities Act, (B) Subscriber understand that the offering meets the exemptions from filing under FINRA Rule 5123(c), (C) Subscriber is aware that the sale to them is being made in reliance on a private placement exemption from, or in a transaction not subject to, registration under the Securities Act, and the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Securities offered pursuant to this Subscription, was located outside the United States and was not a U.S. person at the time (x) the offer was made to it and (y) when the buy order for such Subscribed Shares was originated, and continues to be located outside the United States and not to be a U.S. person and has not purchased such Subscribed Shares for the account or benefit of any person located in the United States or who is a U.S. person, or entered into any arrangement for the transfer of such Subscribed Shares or any economic interest therein to any person located in the United States or any U.S. person, (D) Subscriber is authorized to consummate the purchase of the Subscribed Shares offered pursuant to this Subscription in compliance with all applicable laws and regulations of the jurisdiction where such sales are to be made. In either case, the Subscribed Shares have not been registered under the Securities Act or any other applicable securities laws of any other jurisdiction, are being offered in transactions not requiring registration under the Securities Act, and unless so registered, may not be reoffered, resold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities laws, pursuant to any exemption therefrom or in a transaction not subject thereto. Subscriber understands that no disclosure or offering document has been prepared by the Placement Agents in connection with the offer and sale of the Subscribed Shares. Subscriber understands that the Subscribed Shares may not be offered, resold, transferred, pledged (other than in connection with ordinary course prime brokerage relationships) or otherwise disposed of by Subscriber absent an effective registration statement under the Securities Act, except (i) to the Company or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act or (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and, in each of cases (ii) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any book-entry positions or certificates representing the Subscribed Shares shall contain the legend set forth in this Section 5(d). Subscriber understands and agrees that the Subscribed Shares will be subject to transfer restrictions under applicable securities laws and, as a result of these transfer restrictions, Subscriber may not be able to readily offer, resell, transfer, pledge (other than in connection with ordinary course prime brokerage relationships) or otherwise dispose of the Subscribed Shares and may be required to bear the financial risk of an investment in the Subscribed Shares for an indefinite period of time. Subscriber understands that it has been advised to consult legal counsel and tax and accounting advisors prior to making any offer, resale, pledge, transfer or disposition of any of the Subscribed Shares.
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Each book entry for the Subscribed Shares shall contain a notation, and each certificate (if any) evidencing the Ordinary Shares shall be stamped or otherwise imprinted with a legend, in substantially the following form (or to substantially the following effect):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE (NOTWITHSTANDING THE FOREGOING, THE SECURITIES REPRESENTED HEREBY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES). BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE SUBSCRIBER AGREES FOR THE BENEFIT OF METALS ACQUISITION LIMITED (THE “ISSUER”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR
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PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
| (A) | TO THE ISSUER OR ANY SUBSIDIARY THEREOF, OR |
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT AND IS EFFECTIVE AT THE TIME OF SUCH TRANSFER, OR
(C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY PERMITTED TRANSFER IN ACCORDANCE WITH THE ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(e) Subscriber understands and agrees that Subscriber is purchasing the Subscribed Shares directly from the Issuer. Subscriber further acknowledges that there have not been, and Subscriber hereby expressly and irrevocably acknowledges and agrees that it is not relying on, any representations, warranties, covenants or, agreements or statements made to Subscriber by or on behalf of the Issuer, the Company, Glencore or the Issuer’s, the Company’s or Glencore’s respective affiliates or any of the respective subsidiaries, control persons, officers, directors, employees, partners, agents or representatives, or any other party to the Transaction or any other person or entity (including the Placement Agents), expressly or by implication, (including by omission), other than those representations, warranties, covenants, agreements and statements of the Issuer and the Company expressly set forth in this Subscription Agreement, and Subscriber is not relying on any other purported representations, warranties, covenants, agreements or statements (including by omission). Subscriber acknowledges that certain information provided by the Issuer and the Company was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Subscriber acknowledges that such information and projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections. Subscriber agrees that neither the Placement Agents nor any of its affiliates or any of their or their respective affiliates’ control persons, officers, directors or employees, shall be liable (including in contract, tort, under federal or state securities laws or otherwise) to Subscriber pursuant to this Subscription Agreement for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Subscribed Shares. On behalf of itself and its affiliates and any of their respective control persons, officers, directors or employees, Subscriber releases the Placement Agents and any of their respective affiliates in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to this Subscription Agreement or the transactions contemplated hereby. Subscriber agrees not to commence any litigation or bring any claim against the Placement Agents nor any of their affiliates in any court or any other forum which relates to, may arise out of, or is in connection with, the placement of the Ordinary Shares. Subscriber undertook this investment freely and after obtaining independent legal advice.
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(f) In making its decision to purchase the Subscribed Shares, Subscriber has relied solely upon independent investigation made by Subscriber and upon the representations, warranties and covenants of the Issuer and the Company expressly set forth herein (and no other representations and warranties). Subscriber acknowledges and agrees that Subscriber has received and had adequate time to review such information as Subscriber deems necessary in order to make an investment decision with respect to the Subscribed Shares, including with respect to the Issuer, the Company and the Transaction (including CMPL and its subsidiaries (collectively, the “Acquired Companies”)). Subscriber acknowledges it has conducted its own investigation of the Company and the Subscribed Shares and has not relied on any statements or other information provided by the Placement Agents concerning the Issuer, the Company or the Subscribed Shares or the offer and sale of the Subscribed Shares, and has been offered the opportunity to ask questions of the Issuer and the Company and received answers thereto, including on the financial information, as Subscriber deemed necessary in connection with its decision to purchase the Subscribed Shares. Subscriber has made its own assessment and is satisfied concerning the relevant tax and other economic considerations relevant to its investment in the Subscribed Shares. Without limiting the generality of the foregoing, Subscriber acknowledges that Subscriber has reviewed the SEC Reports. Subscriber represents and agrees that Subscriber and Subscriber’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as Subscriber and Subscriber’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Subscribed Shares. Subscriber acknowledges and agrees that none of Citigroup Global Markets Inc., UBS Securities LLC, Canaccord Genuity LLC and Ashanti Capital Pty Ltd., each acting as a placement agent to the Company (collectively, the “Placement Agents”), nor any affiliate of the Placement Agents has provided Subscriber with any information or advice with respect to the Subscribed Shares nor is such information or advice necessary or desired. Neither the Placement Agents nor any of their affiliates have made or make any representation or warranty, whether express or implied, of any kind or character as to the Issuer, the Company or the Acquired Companies or the quality or value of the Subscribed Shares and the Placement Agents and any of their respective affiliates may have acquired non-public information with respect to the Issuer, the Company or the Acquired Companies which Subscriber agrees need not be provided to it. In connection with the issuance of the Subscribed Shares to Subscriber, neither the Placement Agents nor any of their affiliates have acted as a financial advisor or fiduciary to Subscriber. Subscriber agrees that neither the Placement Agents nor any of their affiliates or any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing shall be liable to any Subscriber for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with Subscriber’s purchase of the Subscribed Shares. Subscriber understands that the Placement Agents and their directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Issuer, the Company or the Subscribed Shares or the accuracy, completeness or adequacy of any information supplied to the Placement Agents by the Issuer and the Company. On behalf of Subscriber and Subscriber’s affiliates, Subscriber releases the Placement Agents and their respective affiliates in respect of any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements related to the Subscription. Subscriber agrees not to commence any litigation or bring any claim against any of the Placement Agents nor any of their affiliates in any court or any other forum which relates to, may arise out of, or is in connection with, the Subscription. This undertaking is given freely and after obtaining independent legal advice.
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(g) Subscriber became aware of this offering of the Subscribed Shares solely by means of direct contact between Subscriber, the Issuer and the Company or by means of contact from the Placement Agents and/or their respective advisors (including, without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, representatives, affiliates, directors, officers, managers, members, and/or employees, and/or the representatives of such persons (such parties referred to collectively as “Representatives”). The Subscribed Shares were offered to Subscriber solely by direct contact between Subscriber, the Issuer and the Company and/or its Representatives. Subscriber did not become aware of this offering of the Subscribed Shares, nor were the Subscribed Shares offered to Subscriber, by any other means, and none of the Issuer, the Company, the Placement Agents or their respective Representatives acted as investment advisor, broker or dealer to Subscriber. Subscriber acknowledges that it is not relying upon, and has not relied upon, any statement, representation or warranty made by any person or entity (including, without limitation, the Issuer, the Company, the Placement Agents and/or their respective Representatives), other than the representations and warranties expressly set forth in this Subscription Agreement, in making its investment or decision to invest in the Issuer and the Company. Subscriber acknowledges that the Issuer and the Company represents and warrants that the Subscribed Shares (i) were not offered by any form of general solicitation or general advertising, including methods described in Section 502(c) of Regulation D under the Securities Act, and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.
(h) Subscriber acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Subscribed Shares. Subscriber has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Subscribed Shares, and Subscriber has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as Subscriber has considered necessary to make an informed investment decision, and has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment. Subscriber acknowledges that it (i) is a sophisticated investor, experienced in investing in business and financial transactions and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, and (ii) has exercised independent judgment in evaluating its purchase of the Subscribed Shares. Subscriber acknowledges that its purchase of Subscribed Shares (i) is fully consistent with Subscriber’s financial needs, objectives and condition, (ii) complies and is fully consistent with all of Subscriber’s applicable investment policies, guidelines and other restrictions, (iii) has been duly authorized and approved by all necessary action (corporate or otherwise), and (iv) does not and will not violate or constitute a default under Subscriber’s charter, by- laws or other constituent documents or under any law, rule, regulation, agreement or other obligation by which we are bound and are a fit, proper and suitable investment, notwithstanding the substantial risks inherent in investing in or holding the Subscribed Shares. Subscriber understands that the purchase and sale of the Subscribed Shares hereunder meets (i) the institutional accounts exemptions from filing under FINRA Rule 5123(b)(1)(A), (ii) the institutional customer exemption from filing under FINRA Rule 2111(b), (iii) the qualified institutional buyers exemption from filing under FINRA Rule 5123(b)(1)(C) and (iv) the accredited investors exemption from filing under FINRA Rule 5123(b)(1)(J).
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(i) Alone, or together with any professional advisor(s), Subscriber represents and acknowledges that Subscriber has adequately analyzed and fully considered the risks of an investment in the Subscribed Shares and determined that the Subscribed Shares are a suitable investment for Subscriber and that Subscriber is able at this time and in the foreseeable future to bear the economic risk of a total loss of Subscriber’s investment in the Issuer and the Company. Subscriber acknowledges specifically that a possibility of total loss exists.
(j) Subscriber understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Subscribed Shares or made any findings or determination as to the fairness of this investment.
(k) To the best of its knowledge, Subscriber is in material compliance with all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the United States and administered by the U.S. Department of Treasury, U.S. Department of Commerce, or the U.S. Department of State, and (b) the United Nations Security Council, the European Union as administered by any European Union member state, or the United Kingdom’s HM Treasury (collectively, “Sanctions”). Subscriber is not (x) to the best of its knowledge, a person or entity that is named on any sanctions-related list of designated persons, including the List of Specially Designated Nationals and Blocked Persons, the Executive Order 13599 List, the Foreign Sanctions Evaders List or the Sectoral Sanctions Identifications List, each of which is administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), the Denied Persons List, Entity List, or Unverified List administered by the U.S. Department of Commerce, Bureau of Industry and Security, and sanctions-related lists set forth in any Executive Order issued by the President of the United States and administered by OFAC, or any other list of prohibited or restricted parties promulgated by OFAC, the Department of Commerce, the Department of State, His Majesty’s Treasury, the European Union or any member state thereof, or the United Nations Security Council, (y) organized, located, or resident in, or a citizen, national or the government, including any political subdivision, agency or instrumentality thereof, of any country or territory subject to comprehensive sanctions (currently, Cuba, Iran, North Korea, Syria, Russia, and the Crimea, Donetsk and Luhansk regions of Ukraine) or (z) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank (collectively, (x) through (z), a “Restricted Person”). Subscriber agrees to provide law enforcement agencies, if requested thereby, such records and information as required by applicable law, provided that Subscriber is permitted to do so under applicable law. Subscriber represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that Subscriber is in material compliance with the BSA/PATRIOT Act, and, to the extent required, maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. Subscriber also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with Sanctions, including for the screening of its investors to confirm that they are not Restricted Persons. Subscriber further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by Subscriber and used to purchase the Subscribed Shares were legally derived.
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(l) Subscriber does not have, as of the date hereof, and during the 30-day period immediately prior to the date hereof Subscriber has not entered into, any “put equivalent position” as such term is defined in Rule 16a-1 under the Exchange Act or short sale positions with respect to the securities of the Issuer or the Company. Notwithstanding the foregoing, in the case of a Subscriber that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of Subscriber’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of Subscriber’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Subscribed Shares covered by this Subscription Agreement.
(m) If Subscriber is an employee benefit plan that is subject to Title I of ERISA, a plan, an individual retirement account or other arrangement that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or an employee benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA), a church plan (as defined in Section 3(33) of ERISA), a non-U.S. plan (as described in Section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”, collectively, the “Plans”) subject to the fiduciary or prohibited transaction provisions of ERISA or Section 4975 of the Code or other laws or regulations that are similar to such provisions, then Subscriber represents and warrants that neither the Issuer, the Company, nor any of its respective affiliates (the “Transaction Parties”) has acted as the Plan’s fiduciary, or has been relied on for advice, with respect to its decision to acquire and hold the Subscribed Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Subscribed Shares.
(n) At the Closing, Subscriber will have sufficient funds to pay the Subscription Amount pursuant to Section 2(b) of this Subscription Agreement.
(o) Subscriber agrees that, notwithstanding Section 10(h) of this Subscription Agreement, the Placement Agents may rely upon the representations and warranties made by Subscriber to the Issuer and the Company in this Subscription Agreement.
(p) No broker, finder or other financial consultant has acted on behalf of Subscriber in connection with this Subscription Agreement or the transactions contemplated hereby in such a way as to create any liability on the Issuer or the Company.
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(q) Subscriber hereby acknowledges and agrees that (i) the Placement Agents are each acting solely as a Placement Agent in connection with the Subscription contemplated by this Subscription Agreement and are not acting as an underwriter or in any other capacity and are not and shall not be construed as a fiduciary for Subscriber, the Issuer, the Company or any other person or entity in connection with the transactions contemplated herein, (ii) neither the Placement Agents nor any of their respective Representatives have made, or will make, any representation or warranty, whether express or implied, of any kind or character and have not provided any advice or recommendation in connection with the transactions contemplated herein, (iii) the Placement Agents and their respective Representatives will have no responsibility with respect to (x) any representations, warranties or agreements made by any person or entity under or in connection with the Subscription as contemplated by this Subscription Agreement or the transactions contemplated herein or any of the documents furnished pursuant thereto or in connection therewith, or the execution, legality, validity or enforceability (with respect to any person) of any thereof, or (y) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Issuer, the Company, the Acquired Companies or the transactions contemplated herein, (iv) the Placement Agents and their respective Representatives shall have no liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by Subscriber, the Issuer, the Company or any other person or entity), whether in contract, tort or otherwise, to Subscriber, or to any person claiming through Subscriber, in respect of the transactions contemplated herein, (v) neither the Placement Agents nor their respective Representatives have made an independent investigation with respect to the Issuer, the Company or the Subscribed Shares or the accuracy, completeness or adequacy of any information supplied to Subscriber by the Issuer or the Company, and (vi) the Placement Agents have not prepared a disclosure or offering document in connection with the offer and sale of the Subscribed Shares.
(r) Except for the representations and warranties contained in this Section 5, Subscriber makes no express or implied representation or warranty, and Subscriber hereby disclaims any such representation or warranty with respect to the execution and delivery of this Subscription Agreement and the consummation of the transactions contemplated herein.
(s) If Subscriber is located in or receiving this offer in Australia, Subscriber warrants that (i) it is a person or body referred to in Section 708(11) or 708(12) of the Corporations Act 2001 (Cth); or (ii) that a qualified accountant has issued a certificate, no more than six months prior to the date of this Subscription Agreement, confirming that Subscriber (x) has net assets of at least AU$2.5 million; or (y) has a gross annual income for each of the last two financial years of at least AU$250,000 per annum; or (iii) it is otherwise an “exempt offeree” for the purposes of Section 708 of the Corporations Act 2001 (Cth) and does not require disclosure from the Company under Part 6D.2 of the Corporations Act in order for the Company to issue the Subscribed Shares to Subscriber under this Subscription Agreement; and (iv) it agrees to comply with to Section 707(3) of the Corporations Act 2001 (Cth) and acknowledges Subscriber will be prohibited from on- selling the Subscribed Shares to investors in Australia for a period of 12 months after their issuance unless such purchaser falls within an exception set out in Section 708 of the Corporations Act 2001 (Cth).
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| 6. | Registration of Subscribed Shares. |
(a) The Issuer agrees that the Issuer will file with the Commission (at the Issuer’s sole cost and expense) a registration statement registering the resale of the Ordinary Shares (the “Registration Statement”) no later than thirty calendar days after the Closing Date, and the Issuer shall use its commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty calendar days after the filing thereof (or, in the event the Commission reviews and has written comments to the Registration Statement, the ninetieth calendar day following the filing thereof) and (ii) the tenth Business Day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review ((i) and (ii) collectively, the “Effectiveness Deadline”); provided that if such day falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business. The Issuer will use its commercially reasonable efforts to provide a draft of the Registration Statement to the undersigned for review (but not comment) at least two (2) Business Days in advance of filing the Registration Statement; provided that, for the avoidance of doubt, in no event shall the Issuer be required to delay or postpone the filing of such Registration Statement as a result of or in connection with Subscriber’s review. Unless otherwise agreed to in writing by Subscriber, Subscriber shall not be identified as a statutory underwriter in the Registration Statement unless requested by the Commission or another regulatory agency; provided, that if the Commission or another regulatory agency requests that a Subscriber be identified as a statutory underwriter in the Registration Statement, Subscriber will have the opportunity to withdraw from the Registration Statement upon its prompt written request to the Issuer. Notwithstanding the foregoing, if the Commission prevents the Issuer from including any or all of the shares proposed to be registered under the Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale of the Ordinary Shares by the applicable shareholders or otherwise, such Registration Statement shall register for resale such number of Ordinary Shares which is equal to the maximum number of Ordinary Shares as is permitted by the Commission. In such event, the number of Ordinary Shares to be registered for each selling shareholder named in the Registration Statement shall be reduced pro rata among all such selling shareholders. The Issuer agrees that, except for such times as the Issuer is permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement, the Issuer will use its commercially reasonable efforts to cause such Registration Statement to remain effective with respect to Subscriber until the earlier of (i) two years from the issuance of the Ordinary Shares, (ii) the date on which all of the Ordinary Shares shall have been sold, and (iii) on the first date on which the undersigned can sell all of its Ordinary Shares (or shares received in exchange therefor) under Rule 144 without limitation as to the manner of sale or the amount of such securities that may be sold. If requested by Subscriber, the Issuer shall use its commercially reasonable efforts to (i) cause the removal of the restrictive legends from any Ordinary Shares being sold under the Registration Statement or pursuant to Rule 144 at the time of sale of such Registrable Securities (as defined below) and, at the request of a Holder (as defined below), cause the removal of all restrictive legends from any Registrable Securities held by such Holder that may be sold by such Holder without restriction under Rule 144, including without limitation, any volume and manner of sale restrictions, and (ii) cause its legal counsel to deliver an opinion, if necessary, to the transfer agent in connection with the instruction under subclause (i) to the effect that the removal of such restrictive legends in such circumstances may be effected under the Securities Act, in each case upon the receipt of customary representations and other documentation, if any, from the Holder as reasonably requested by the Issuer, its counsel or the transfer agent, establishing that restrictive legends are no longer required. The Issuer shall use its commercially reasonable efforts to have the legend removal referenced above apply to all shares held by Subscriber in a single transaction. The Issuer will use commercially reasonable efforts to file all reports, and provide all customary and reasonable cooperation, necessary to enable Holder to resell Registrable Securities pursuant to the Registration Statement or Rule 144, as applicable, qualify the Registrable Securities for listing on the applicable stock exchange on which the Ordinary Shares are then listed and update or amend the Registration Statement as necessary to include Registrable Securities. “Registrable Securities” shall mean, as of any date of determination, the Ordinary Shares and any other equity security issued or issuable with respect to the Ordinary Shares by way of share subdivision, dividend, distribution, recapitalization, merger, exchange, replacement or similar event, provided, however, that such securities shall cease to be Registrable Securities at the earliest of (A) three years, (B) the date all Ordinary Shares held by a Holder may be sold by such Holder without volume or manner of sale limitations pursuant to Rule 144 and without the requirement for the Issuer to be in compliance with the current public information required under Rule 144(c)(1) (or Rule 144(i)(2), if applicable), (C) the date on which such securities have actually been sold by a Holder, and (D) when such securities shall have ceased to be issued and outstanding. “Holder” shall mean Subscriber or any affiliate of Subscriber to which the rights under this Section 6 shall have been assigned. The undersigned agrees to disclose its beneficial ownership, as determined in accordance with Rule 13d-3 of the Exchange Act, of Ordinary Shares to the Issuer (or its successor) promptly upon request to assist the Issuer in making the determination described above. The Issuer’s obligations to include the Ordinary Shares in the Registration Statement are contingent upon Subscriber furnishing in writing to the Issuer such information regarding Subscriber, the securities of the Issuer held by Subscriber and the intended method of disposition of the Ordinary Shares as shall be reasonably requested by the Issuer to effect the registration of the Ordinary Shares, and Subscriber shall execute such documents in connection with such registration as the Issuer may reasonably request that are customary of a selling shareholder in similar situations, including providing that the Issuer shall be entitled to postpone and suspend the effectiveness or use of the Registration Statement during any customary blackout or similar period or as permitted hereunder. In the case of the registration effected by the Issuer pursuant to this Subscription Agreement, the Issuer shall, upon reasonable request, inform Subscriber as to the status of such registration. Subscriber shall not be entitled to use the Registration Statement for an underwritten offering of Ordinary Shares. Notwithstanding anything to the contrary contained herein, the Issuer may delay or postpone filing of such Registration Statement, and from time to time require Subscriber not to sell under the Registration Statement or suspend the use or effectiveness of any such Registration Statement if it determines that in order for the registration statement to not contain a material misstatement or omission, an amendment thereto would be needed, or if such filing or use could materially affect a bona fide business or financing transactions of the Issuer or would require premature disclosure of information that could materially adversely affect the Issuer (each such circumstance, a “Suspension Event”); provided, that, (w) the Issuer shall not so delay filing or so suspend the use of the Registration Statement for a period of more than sixty (60) consecutive days or more than two times in any 360-day period and (x) the Issuer shall use commercially reasonable efforts to make such registration statement available for the sale by the undersigned of such securities as soon as practicable thereafter.
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(b) Upon receipt of any written notice from the Issuer (which notice shall not contain any material non-public information regarding the Issuer) of the occurrence of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension Event the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, the undersigned agrees that (i) it will immediately discontinue offers and sales of the Ordinary Shares under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the undersigned receives copies of a supplemental or amended prospectus (which the Issuer agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Issuer that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in such written notice delivered by the Issuer unless otherwise required by law, subpoena or regulatory request or requirement. If so directed by the Issuer, the undersigned will deliver to the Issuer, or in the undersigned’s sole discretion destroy, all copies of the prospectus covering the Subscribed Shares in the undersigned’s possession; provided, however, that this obligation to deliver or destroy all copies of the prospectus covering the Ordinary Shares shall not apply (w) to the extent the undersigned is required to retain a copy of such prospectus (A) in order to comply with applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up.
(c) The Issuer shall, notwithstanding any termination of this Subscription Agreement, indemnify, defend and hold harmless the Subscriber (if the Subscriber is named as a selling stockholder under the Registration Statement), its officers, directors, trustees, agents, partners, members, managers, stockholders, affiliates, employees and investment advisers of each of them, and each person who controls the Subscriber (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) officers, directors, trustees, agents, partners, members, managers, stockholders, affiliates, employees and investment advisers of each such controlling person to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any prospectus included in any Registration Statement or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Issuer of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Section 6 except to the extent, but only to the extent, that such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding the Subscriber furnished in writing to the Issuer by the Subscriber expressly for use therein; provided, however, that the indemnification contained in this Section 6 shall not apply to amounts paid in settlement of any Losses if such settlement is effected without the consent of the Issuer (which consent shall not be unreasonably withheld, conditioned or delayed), nor shall the Issuer be liable for any Losses to the extent they arise out of or are based upon a violation which occurs (A) in reliance upon and in conformity with written information furnished by a Subscriber expressly for use in such Registration Statement, (B) in connection with any failure of such person to deliver or cause to be delivered a prospectus made available by the Issuer in a timely manner to the extent required, (C) as a result of offers or sales effected by or on behalf of any person by means of a freewriting prospectus (as defined in Rule 405 of the Securities Act) that was not authorized in writing by the Issuer, or (D) in connection with any offers, sales or transfers effected by or on behalf of a Subscriber in violation of Section 6(e) hereof. The Issuer shall notify the Subscriber promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Section 6 of which the Issuer is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an indemnified party and shall survive the transfer of the Ordinary Shares by the Subscriber.
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7. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earlier to occur of (a) such date and time as the Share Sale Agreement is terminated in accordance with its terms, (b) upon the mutual written agreement of the Issuer and the Company and Subscriber to terminate this Subscription Agreement, (c) August 2, 2023 (the “Outside Date”) or (d) the failure to consummate the Copper Purchase Agreement in accordance with its terms (for any reason whatsoever); provided, that nothing herein will relieve any party from liability for any willful breach hereof (including, for the avoidance of doubt, a Subscriber’s willful breach of Section 2(c) of this Subscription Agreement with respect to its representations, warranties and covenants as of the date of the Closing) prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach. The Issuer and the Company shall notify Subscriber of the termination of the Share Sale Agreement promptly after the termination thereof. For the avoidance of doubt, if any termination hereof occurs after the delivery by Subscriber of the Subscription Amount for the Subscribed Shares, the Issuer and the Company shall promptly (but not later than one (1) Business Day thereafter) return, or cause the Escrow Agent to return, the Subscription Amount to Subscriber by wire transfer of immediately available funds to the account specified by Subscriber without any deduction for or on account of any tax, withholding, charges, or set-off.
8. No Short Sales. Subscriber hereby agrees that, from the date of this Subscription Agreement until the Closing Date (or earlier termination of this Subscription Agreement), neither Subscriber nor any Person acting on behalf of Subscriber or pursuant to any understanding with Subscriber will engage in any Short Sales (as defined below) with respect to securities of the Issuer and the Company, as applicable. For purposes of this Section 8, “Short Sales” shall mean all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, and all short positions effected through any direct or indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), or sales or other short transactions through non-U.S. broker dealers or foreign regulated brokers. Notwithstanding the foregoing, (i) nothing in this Section 8 shall prohibit other entities under common management with Subscriber that have no knowledge of this Subscription Agreement or of Subscriber’s Subscription (including Subscriber’s controlled affiliates and/or affiliates) from entering into any Short Sales and (ii) in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no knowledge of the investment decisions made by the portfolio managers or desks managing other portions of such Investor’s assets, the limitations set forth in the first sentence of this Section 8 shall only apply with respect to the portion of assets managed by the portfolio managers or desks that made the investment decision to purchase the Subscribed Shares covered by this Subscription Agreement.
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9. Trust Account Waiver. Subscriber hereby acknowledges that the Company has established a trust account (the “Trust Account”) containing the proceeds of its initial public offering (the “IPO”) and from certain private placements occurring simultaneously with the IPO (including interest accrued from time to time thereon) for the benefit of the public shareholders of the Company and certain other parties (including the underwriters of the IPO). For and in consideration of the Company entering into this Subscription Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Subscriber hereby (i) agrees that it nor any of its related parties does not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets held in the Trust Account or distributions therefrom, and shall not make any claim against the Trust Account (including any distributions therefrom), in each case, regardless of whether such claim arises as a result of, in connection with or relating in any way to this Subscription Agreement or any other matter, and regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Released Claims”) and (ii) irrevocably waives any Released Claims that it or any of its related parties may have against the Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of any agreement with the Company or its related parties); provided, however, that nothing herein shall serve to limit or prohibit (i) the Subscriber’s right to pursue a claim against the Company or for legal relief against assets held outside the Trust Account (including from and after the consummation of a transaction other than as contemplated by this document) or, for specific performance, injunctive or other equitable relief or (ii) any claims that the Subscriber may have in the future against the Company’s assets or funds that are not held in the Trust Account (including any funds that have been released from the Trust Account and any assets that have been purchased or acquired with any such funds). Subscriber acknowledges and agrees that such irrevocable waiver is material to this document and specifically relied upon by the Company to induce the Company to enter into this document, and such party further intends and understands such waiver to be valid, binding and enforceable against it and its related parties under applicable law. Subscriber agrees not to seek recourse or make or bring any action, suit, claim or other proceeding against the Trust Account as a result of, or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Shares regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability. Subscriber acknowledges and agrees that it shall not have any redemption rights with respect to the Subscribed Shares pursuant to the Company’s organizational documents in connection with the Transaction or any other business combination, any subsequent liquidation of the Trust Account, the Company or otherwise. In the event Subscriber or any of its related parties have any claim against the Company in connection with, as a result of, relating to or arising out of, this Subscription Agreement, the transactions contemplated hereby or the Subscribed Shares, Subscriber and its related parties (or claimant on any of their behalves or in lieu of any of them) shall pursue such claim solely against the Company and its assets outside the Trust Account and not against the Trust Account or any monies or other assets in the Trust Account.
| 10. | Miscellaneous. |
(a) All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, on the date of transmission to such recipient; (iii) one (1) Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four (4) Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address specified on the signature page hereof or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 10(a).
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(b) Subscriber acknowledges that (i) the Issuer and the Company will rely on the acknowledgments, understandings, agreements, representations and warranties made by Subscriber contained in this Subscription Agreement and (ii) the Placement Agents will rely on the representations and warranties made by Subscriber and the Company, as the case may be, contained in this Subscription Agreement. Prior to the Closing, Subscriber agrees to promptly notify the Issuer and the Company and the Placement Agents if it becomes aware that any of the acknowledgments, understandings, agreements, representations and warranties of Subscriber set forth herein are no longer accurate in all material respects. The Issuer and the Company acknowledges that Subscriber and others (including Placement Agents) will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement.
(c) Each of the Issuer, the Company, the Placement Agents and Subscriber is irrevocably authorized to produce this Subscription Agreement or a copy hereof to any interested party as requested or required by law, rule or regulation in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby; provided that, with respect to production by the Issuer and the Company, such party will provide Subscriber with at least three (3) Business Days’ prior written notice of such production to the extent legally permissible and subject to Section 10(s).
| (d) | [Reserved]. |
(e) Neither this Subscription Agreement nor any rights that may accrue to Subscriber hereunder (other than the Subscribed Shares acquired hereunder, if any) may be transferred or assigned. Neither this Subscription Agreement nor any rights that may accrue to the Issuer and the Company hereunder may be transferred or assigned (provided, that, for the avoidance of doubt, each of the Issuer and the Company may transfer the Subscription Agreement and its rights hereunder solely in connection with the consummation of the Transaction and exclusively to another entity under the control of, or under common control with, the Issuer and the Company). Notwithstanding the foregoing, Subscriber may assign its rights and obligations under this Subscription Agreement to one or more of its affiliates (including other investment funds or accounts managed or advised by the investment manager who acts on behalf of Subscriber) or, with the Issuer and the Company’s prior written consent, to another person, provided that no such assignment shall relieve Subscriber of its obligations hereunder if any such assignee fails to perform such obligations, unless each of the Issuer and the Company has given its prior written consent to such relief, and such assignee agrees in writing to be bound by the terms hereof.
(f) All the agreements, representations and warranties made by each party hereto in this Subscription Agreement shall survive the Closing.
(g) The Issuer or the Company may request from Subscriber such additional information as the Issuer or the Company may reasonably determine necessary to evaluate the eligibility of Subscriber to acquire the Subscribed Shares, to register the resale of the Subscribed Shares or otherwise consummate or evidence the transaction contemplated by this Subscription Agreement, and Subscriber shall provide such information as may be reasonably requested, to the extent readily available and to the extent consistent with its internal policies and procedures provided that the Issuer and the Company agree to keep any such information provided by Subscriber confidential other than as necessary to include in any registration statement the Issuer and the Company is required to file hereunder or in connection herewith. Subscriber acknowledges and agrees that if it does not provide the Issuer or the Company with such requested information, the Issuer and the Company may not be able to register the Subscribed Shares for resale pursuant to Section 6 hereof. Subscriber hereby agrees that the Subscription Agreement, as well as the nature of Subscriber’s obligations hereunder, may be disclosed in any public announcement or disclosure required by the Commission and in any registration statement, proxy statement, consent solicitation statement or any other Commission filing to be filed by the Issuer and the Company in connection with the issuance of the Subscribed Shares contemplated by this Subscription Agreement and/or the Transaction, in each case without Subscriber’s prior written consent.
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(h) This Subscription Agreement may not be amended, modified, waived or terminated (other than pursuant to the terms of Section 7 above) except by an instrument in writing, signed by each of the parties hereto; provided, that Section 2(a) of this Subscription Agreement may not be amended, modified, waived or terminated without the written consent of Subscriber; provided further, that Section 5, this Section 10(h), and Section 10(j) of this Subscription Agreement may not be amended, terminated or waived in a manner that is material and adverse to the Placement Agents without the written consent of the Placement Agents. Upon the effectuation of such waiver, modification, amendment or termination in conformance with this Section 10(h), such amendment, modification, waiver or termination shall be binding on Subscriber and effective as to all of this Subscription Agreement.
(i) This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties hereto, with respect to the subject matter hereof, except that any confidentiality agreement with respect to Subscriber or its affiliates shall remain in full force and effect following the amendment, modification, waiver or termination of this Subscription Agreement.
(j) Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns. The parties hereto acknowledge and agree that each of the Placement Agents is an express third-party beneficiary of its express rights in Section 3, Section 4, Section 5, Section 10(h) and this Section 10(j) of this Subscription Agreement. In addition, (i) the Issuer and the Company acknowledges and agrees that each of the Placement Agents is a third-party beneficiary of the acknowledgments, understandings, agreements, covenants, representations and warranties made by the Issuer and the Company contained in this Subscription Agreement, and (ii) Subscriber acknowledges and agrees that each of the Placement Agents is a third-party beneficiary of the acknowledgments, understandings, agreements, covenants, representations and warranties made by Subscriber contained in this Subscription Agreement. Each of the parties hereto shall be entitled to seek and obtain equitable relief, without proof of actual damages, including an injunction or injunctions or order for specific performance to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement to cause Subscriber to fund the Subscription Amount and cause the Closing to occur if the conditions in Section 2 this Subscription Agreement have been satisfied or, to the extent permitted by applicable law, waived by the applicable party entitled to waive any such condition. Each party hereto further agrees that none of the parties hereto or the Placement Agents shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10(j), and each party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument
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(k) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
| (l) | [Reserved.] |
(m) This Subscription Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf or any other form of electronic delivery (including any electronic signature complying with U.S. federal ESIGN Act of 2000)) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(n) The parties hereto agree that irreparable damage may occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto and the Placement Agents shall be entitled to seek an injunction or injunctions to prevent breaches or threatened breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled to seek at law, in equity, in contract, in tort or otherwise.
(o) This Subscription Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other jurisdiction.
(p) EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF ANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS SUBSCRIPTION AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS SUBSCRIPTION AGREEMENT.
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(q) The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Subscription Agreement must be brought exclusively in the state courts of New York or in the federal courts located in the state and county of New York (collectively the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this subscription agreement may be brought in any other forum. Notwithstanding the foregoing, a final judgement in any such action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereby irrevocably waives all claims of immunity from jurisdiction and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 10(a) of this Subscription Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
(r) This Subscription Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Subscription Agreement, or the negotiation, execution or performance of this Subscription Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party (which, for the avoidance of doubt, shall not include the Placement Agents or any of their Affiliates). Each of the Issuer, Company and Subscriber further acknowledge and agree that each Placement Agent is a third-party beneficiary of the representations and warranties of the Issuer, the Company and Subscriber in this Subscription Agreement.
(s) The Issuer shall, by 9:00 a.m., Eastern Time, on the first Business Day immediately following the date of this Subscription Agreement, issue one or more press releases or file with the Commission a Current Report on Form 8-K (collectively, the “Disclosure Document”) disclosing, to the extent not previously publicly disclosed, all material terms of the transactions contemplated hereby (and by the Other Subscription Agreements), the Transaction and any other material, nonpublic information that each of the Issuer and the Company has provided to Subscriber at any time prior to the filing of the Disclosure Document. Notwithstanding the foregoing, or anything contained to the contrary in Section 10(c), neither the Issuer nor the Company shall publicly disclose the name of Subscriber or any affiliate or investment advisor of Subscriber, or include the name of Subscriber or any affiliate or investment advisor of Subscriber in any press release or in any filing with the Commission or any regulatory agency or trading market, without the prior written consent (including by e-mail) of Subscriber, except as required by the federal securities laws, rules or regulations and to the extent such disclosure is required by other laws, rules or regulations, at the request of the staff of the Commission or regulatory agency or under the NYSE or Nasdaq regulations, in which case the Issuer and the Company shall provide Subscriber with reasonable prior written notice (including by e- mail) of such permitted disclosure, and shall reasonably consult with Subscriber regarding such disclosure. Subject to the limitations of the following sentence, Subscriber hereby consents to the publication and disclosure in any Form 8-K filed by the Issuer with the Commission, in any filing with the Commission made in connection with the Share Sale Agreement and the Transaction, including any proxy statement, prospectus or registration statement related thereto or any other filing with the Commission pursuant to applicable securities laws, of Subscriber’s name and identity and the nature of Subscriber’s commitments, arrangements and understandings under and relating to this Subscription Agreement and, if deemed required or appropriate by the Issuer, a copy of this Subscription Agreement. Notwithstanding the foregoing or anything contained to the contrary in Section 10(c), the Issuer may make disclosures to an auditor or governmental or regulatory authority pursuant to any routine investigation, inspection, examination or inquiry without providing Subscriber with any notification thereof, unless Subscriber is the subject of any such investigation, inspection, examination or inquiry (in which case the preceding sentence shall govern).
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(t) The obligations of Subscriber under this Subscription Agreement are several and not joint with the obligations of any Other Subscriber or any other investor under the Other Subscription Agreements, and Subscriber shall not be responsible in any way for the performance of the obligations of any Other Subscriber under this Subscription Agreement or any other investor under the Other Subscription Agreements. The decision of Subscriber to purchase Subscribed Shares pursuant to this Subscription Agreement has been made by Subscriber independently of any Other Subscriber or any other investor and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Issuer or the Company or any of their subsidiaries which may have been made or given by any Other Subscriber or investor or by any agent or employee of any Other Subscriber or investor, and neither Subscriber nor any of its agents or employees shall have any liability to any Other Subscriber or investor (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any Other Subscription Agreement, and no action taken by Subscriber or investor pursuant hereto or thereto, shall be deemed to constitute Subscriber and other investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that Subscriber and other investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the this Subscription Agreement and the Other Subscription Agreements. Subscriber acknowledges that no Other Subscriber has acted as agent for Subscriber in connection with making its investment hereunder and no Other Subscriber will be acting as agent of Subscriber in connection with monitoring its investment in the Subscribed Shares or enforcing its rights under this Subscription Agreement. Subscriber shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any Other Subscriber or investor to be joined as an additional party in any proceeding for such purpose.
(u) If any change in the Ordinary Shares shall occur between the date hereof and immediately prior to the Closing by reason of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend, the number and type of Subscribed Shares issued to the Subscriber and the Per Share Subscription Price shall be appropriately adjusted to reflect such change.
[Signature pages follow.]
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IN WITNESS WHEREOF, each of the Issuer, Company and Subscriber has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date first set forth above.
| METALS ACQUISITION LIMITED | ||
| By: | /s/ Mick McMullen | |
| Name: Mick McMullen | ||
| Title: Chief Executive Officer | ||
| Address for Notices: | ||
| Century House, Ground Floor | ||
| Cricket Square, P.O. Box 2238 | ||
| Grand Cayman KY1-1107, Cayman Islands | ||
| METALS ACQUISITION CORP | ||
| By: | /s/ Jaco Crouse | |
| Name: Jaco Crouse | ||
| Title: Chief Financial Officer | ||
| Address for Notices: | ||
| Century House, Ground Floor | ||
| Cricket Square, P.O. Box 2238 | ||
| Grand Cayman KY1-1107, Cayman Islands | ||
Signature Page to MAC Subscription Agreement
| SUBSCRIBER: | ||
| Signature of Subscriber: | ||
| By: | /s/ Michael Spencer | |
| Name: | Michael Spencer | |
| Title: | Managing Director | |
| Date: | March 20, 2023 | |
| Name of Subscriber: | ||
| Osisko Bermuda Limited | ||
| (Please print. Please indicate name and capacity of person signing above) |
||
| Name in which shares are to be registered | ||
| (if different): | ||
| Email Address: | [***] |
|
| Subscriber’s EIN: | ||
| Jurisdiction of residency: Bermuda | ||
| Number of Subscribed Shares subscribed for: | The ‘Subscription Amount’ divided by the ‘Price Per Subscribed Share’ (with any fractional entitlement rounded up) being: | |
| Price Per Subscribed Share: | $10.00 | |
| Subscription Amount: | The amount equal to the ‘Available Subscription Amount’ multiplied by the ‘Elected Deposit Percentage’ being: | |
| $ | ||
You must pay the Subscription Amount by wire transfer of United States dollars in immediately available funds to the Escrow Account specified by the Company in the Closing Notice.
Signature Page to MAC Subscription Agreement
ANNEX A
ELIGIBILITY REPRESENTATIONS OF SUBSCRIBER
This Annex A should be completed and signed by Subscriber and constitutes a part of the Subscription Agreement.
| A. | QUALIFIED INSTITUTIONAL BUYER STATUS (Please check the box, if applicable) |
¨ Subscriber is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act).
| B. | FINRA INSTITUTIONAL INVESTOR STATUS (Please check the box) |
¨ Subscriber is a “institutional investor” (as defined in FINRA Rule 2111).
| C. | ACCREDITED INVESTOR STATUS (Please check the box) |
| ¨ | Subscriber is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and has marked and initialed the appropriate box below indicating the provision under which it qualifies as an “accredited investor.” |
| D. | NON-U.S. PERSON STATUS (Please check the box) |
x Subscriber is a non-U.S. person located outside of the United States.
| E. | AFFILIATE STATUS |
(Please check the applicable box)
SUBSCRIBER:
¨ is:
x is not:
an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer or acting on behalf of an affiliate of the Issuer.
Rule 501(a), in relevant part, states that an “accredited investor” shall mean any person who comes within any of the below listed categories, or who the issuer reasonably believes comes within any of the below listed categories, at the time of the sale of the securities to that person. Subscriber has indicated, by marking and initialing the appropriate box below, the provision(s) below which apply to Subscriber and under which Subscriber accordingly qualifies as an “accredited investor.”
| ¨ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company; |
| ¨ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
| ¨ | Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment advisor makes the investment decisions, or if the plan has total assets in excess of $5,000,000; |
| ¨ | Any corporation, similar business trust, partnership or any organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; |
| ¨ | Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer; |
A-1
| ¨ | Any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence must not be included as an asset; (b) indebtedness secured by the person’s primary residence up to the estimated fair market value of the primary residence must not be included as a liability (except that if the amount of such indebtedness outstanding at the time of calculation exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess must be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the residence must be included as a liability; |
| ¨ | Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. |
| ¨ | Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; or |
| ¨ | Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests. |
| F. | FINRA INSTITUTIONAL ACCOUNT STATUS |
(Please check the applicable subparagraphs):
¨ Subscriber is an “institutional account” under FINRA Rule 4512(c).
¨ Subscriber is not an “institutional account” under FINRA Rule 4512(c).
SUBSCRIBER:
Print Name: Osisko Bermuda Limited
| By: | /s/ Michael Spencer | |
| Name: | Michael Spencer | |
| Title: | Managing Director | |
A-2
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