Date of Report (Date of earliest event reported):
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July 14, 2016
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SILVER BULL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
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Nevada
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001-33125
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91-1766677
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(State or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification Number) |
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777 Dunsmuir Street, Suite 1610
Vancouver, B.C.
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V7Y 1K4
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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604-687-5800
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(Former name or former address, if changed since last report)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 | Entry Into a Material Definitive Agreement. |
Item 3.02 | Unregistered Sales of Equity Securities. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No.
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Description
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10.1
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Form of Silver Bull Resources, Inc. Subscription Agreement, dated as of July 14, 2016
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10.2
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Form of Silver Bull Resources, Inc. Warrant Certificate (Investors)
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10.3
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Placement Agent Agreement, dated as of July 7, 2016, by and between Silver Bull Resources, Inc. and Sprott Global Resource Investments, Ltd.
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10.4
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Form of Silver Bull Resources, Inc. Warrant Certificate (Sprott Global Resource Investments, Ltd.)
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Date: July 19, 2016
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SILVER BULL RESOURCES, INC.
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By:
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/s/ Sean Fallis
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Name:
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Sean Fallis
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Title:
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Chief Financial Officer
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Exhibit No.
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Description
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10.1
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Form of Silver Bull Resources, Inc. Subscription Agreement, dated as of July 14, 2016
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10.2
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Form of Silver Bull Resources, Inc. Warrant Certificate (Investors)
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10.3
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Placement Agent Agreement, dated as of July 7, 2016, by and between Silver Bull Resources, Inc. and Sprott Global Resource Investments, Ltd.
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10.4
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Form of Silver Bull Resources, Inc. Warrant Certificate (Sprott Global Resource Investments, Ltd.)
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☐ | All Purchaser information, as applicable, in the boxes on pages 1 to 3 hereof. |
☐ | Unless other arrangements acceptable to the Company have been made, a wire transfer (which includes any wire transfer fee) as outlined in Section 9 hereof. |
☐ | Appendix “I” – Investor Certificate (if the Purchaser is resident in Canada) and, if the Purchaser is an individual accredited investor, Appendix I-A – Risk Acknowledgment Form for Accredited Investors who are Individuals. |
☐ | Appendix “II” – U.S. Investors (if the Purchaser is a U.S. Person or does not satisfy the conditions set out in Section 4.2(a)). |
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Number of Units:
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(Name of Purchaser - please print)
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Aggregate
Subscription Price: CDN$
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By:
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Authorized Signature
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If the person signing this subscription is not purchasing, nor deemed by applicable securities regulation to be purchasing, as principal and is signing as agent for one or more principals, complete the following for each such principal (attach additional pages if required):
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(Official Capacity or Title – please print)
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Please print name of individual whose signature appears above if different than the name of the purchaser printed above.
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(Address of Residence)
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(Name of Principal) | |
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(Address of Residence) | |
(Purchaser’s E-mail) | ||
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(Principal’s E-mail) | |
(Purchaser’s Telephone No.) | (Principal’s Telephone No.) |
Registration Instructions:
As above ☐ or
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Delivery Instructions:
As above ☐ or
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Name [Please Print]
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Account reference, if applicable
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Account reference, if applicable
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Contact Name [Please Print]
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Address
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Address
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(Telephone Number)
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☐ | does not own , directly or indirectly, or exercise control or direction over, any Common Shares in the capital of the Company or securities convertible into Common Shares; or |
☐ | owns directly or indirectly, or exercises control or direction over, ________________ Common Shares and convertible securities entitling the Purchaser to acquire an additional ______________ Common Shares. |
(a) | a director or an officer of the Company; |
(b) | a director or an officer of a person that is itself an insider or subsidiary of the Company; |
(c) | a person that has beneficial ownership of, or control or direction over, directly or indirectly, or a combination of beneficial ownership of, and control or director over, directly or indirectly, securities of the Company carrying more than 10% of the voting rights attached to all of the Company’s outstanding securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the person as underwriter in the course of a distribution; |
(d) | the Company itself if it holds any of its own securities; |
(e) | a person designated as an insider under an order made under section 3.2 of the Securities Act (British Columbia); or |
(e) | a person that is in a prescribed class of persons. |
A = | the average closing price for the Company’s common shares as quoted on the Toronto Stock Exchange (the “ Exchange ”) for the five consecutive trading days immediately preceding the date on which the holder elects to exercise the Warrant by means of the Cashless Exercise Right. |
B = | the then applicable exercise price of the Warrant. |
X = | the number of Warrant Shares that would otherwise have been issuable had the holder elected to exercise the Warrant by means of a cash exercise. |
2.1 | The Purchaser acknowledges that the Company’s obligation to sell the Units to the Purchaser is subject to, among other things, the conditions that: |
(a) | the Purchaser duly completes, executes and returns to the Company this subscription, together with all documents required by applicable securities laws, the Exchange and the OTCQB for delivery to the offices of the lawyers for the Company on behalf of the Purchaser, by no later than 4:00 p.m. (Vancouver time) on July 11, 2016 to Silver Bull Resources, Inc., Suite 1610, 777 Dunsmuir Street, Vancouver, B.C. V7Y 1K4, Canada, Attention: Sean Fallis, Facsimile: 604-563-6004, Email: sfallis@silverbullresources.com, including a duly completed and executed Appendix I – Investor Certificate (if the Purchaser is resident in Canada) and, if the Purchaser is an individual accredited investor, Appendix I-A – Risk Acknowledgment Form for Accredited Investors who are Individuals or Appendix II – U.S. Investors (if the Purchaser is a U.S. Person or does not otherwise satisfy the conditions set out in Section 4.2(a)); |
(b) | payment has been made by the Purchaser of the Subscription Price as set out in Section 9 hereof; |
(c) | the Company has accepted, in whole or in part, this Subscription Agreement, subject to Section 2.2; |
(d) | all necessary regulatory, Exchange and OTCQB approvals have been obtained by the Company prior to the Closing (as defined below); |
(e) | the sale of the Units is exempt from the requirement to file a prospectus or registration statement and the requirement to prepare and deliver an offering memorandum or similar document under any applicable statute relating to the sale of the Units or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or registration statement or delivering an offering memorandum or similar document; |
(f) | all covenants, agreements and conditions contained in this Agreement to be performed by the Purchaser have been performed or complied with in all material respects on or prior to the Closing; and |
(g) | the representations, warranties and certifications of the Purchaser in this Agreement, including in any appendices hereto or other document delivered to the Company in connection with the Purchaser’s subscription, are true and correct when made and being true and correct at the Closing with the same force and effect as if they had been made on and as of the Closing. |
2.2 | The Purchaser acknowledges and agrees that the Company reserves the right, in its absolute discretion, to reject this subscription for Units, in whole or in part, at any time prior to the time of Closing. If this subscription is rejected in whole, any cheques or other forms of payment delivered to the Company representing the subscription amount will be promptly returned to the Purchaser without interest or deduction. If this subscription is accepted only in part, a cheque representing any refund of the subscription amount for that portion of the subscription for the Units which is not accepted will be promptly delivered to the Purchaser without interest or deduction. |
(a) | act as the Purchaser’s representative at the Closing and to swear, execute, file and record in the Purchaser’s name and on the Purchaser’s behalf any document necessary to accept delivery of the Units on the Closing Date; |
(b) | approve any opinions, certificates or other documents addressed to the Purchaser; |
(c) | waive, in whole or in part, any representations, warranties, covenants or conditions for the benefit of the Purchaser; |
(d) | complete or correct any errors or omissions in this Subscription Agreement on behalf of the Purchaser; and |
(e) | receive on the Purchaser’s behalf any certificates representing the Common Shares and Warrants comprising the Units subscribed for hereunder. |
4.1 | The Purchaser confirms that it: |
(a) | has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of its investment in the Units; |
(b) | is capable of assessing the merits and risks (including the potential loss of its entire investment) of the proposed investment in the Units; |
(c) | is aware of the characteristics of the Units and understands the risks relating to an investment therein; and |
(d) | is able to bear the economic risk of loss of its investment in the Units. |
4.2 | The Purchaser is resident in the jurisdiction set forth in the “Address of Residence” set out on page 1 of this Agreement and either: |
(i) | the Purchaser is not a “U.S. Person” (as that term is defined in Rule 902(k) of Regulation S under the United States Securities Act of 1933, as amended (the “ 1933 Act ”)) or a person in the United States of America, its territories or possessions, any State of the United States or District of Columbia (the “ United States ”), and is not purchasing the Units for the account of or benefit of a U.S. Person or a person in the United States; |
(ii) | the Purchaser was not offered the Units in the United States; |
(iii) | the buy order for the Purchaser’s Units was not originated, and the Purchaser did not execute or deliver this Subscription Agreement, in the United States; |
(iv) | the Purchaser has no intention to distribute either directly or indirectly any of the Units in the United States and will not offer, sell or otherwise transfer, directly or indirectly, any of the Units (or any securities underlying the Units or that may be issued in connection with the Units) or to, or for the account or benefit of, a U.S. Person or person in the United States except pursuant to registration under the 1933 Act and the securities laws of all applicable states or available exemptions therefrom; and |
(v) | the Purchaser did not receive the offer to purchase the Units as a result of, nor will it engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act); or |
(b) | The conditions set forth in clause (a) above are not met, but all of the conditions set forth on Appendix II are met. |
4.3 | The Purchaser is aware that no prospectus or registration statement has been prepared or filed by the Company with any securities commission or similar authority in connection with the Offering of the Units contemplated hereby, and that: |
(a) | the Purchaser may be restricted from using most of the civil remedies available under applicable securities laws in Canada; |
(b) | the Purchaser may not receive information that would otherwise be required to be provided under applicable securities laws and the Company is relieved from certain obligations that would otherwise be required to be given if a prospectus were provided under applicable securities laws in connection with the Offering; and |
(c) | the issuance and sale of the Units to the Purchaser is subject to such sale being exempt from the requirements of applicable securities laws as to the filing of a prospectus or registration statement. |
4.4 | The Purchaser, if resident in Canada, is purchasing the Units as principal and is: |
(a) | an “accredited investor” as defined in National Instrument 45-106 Prospectus Exemptions (“ NI 45-106 ”) and is not a person created or used solely to purchase or hold securities as an “accredited investor” as defined in paragraph (m) of the aforesaid definition of “accredited investor”; or |
(b) | purchasing the Units at an acquisition cost to the Purchaser of not less than CDN$150,000 paid in cash, the Purchaser is not an individual and the Purchaser was not created or used solely to purchase or hold securities in reliance on the exemption from the prospectus requirement available under section 2.10 of NI 45-106; |
4.5 | If the Purchaser is resident in an international jurisdiction other than the United States then: |
(a) | the Purchaser currently has knowledge and experience or has consulted the Purchaser’s own counsel, accountant or investment advisor, with respect to the investment contemplated hereby and applicable securities laws in the international jurisdiction in which the Purchaser resides which would apply to this subscription; |
(b) | the Purchaser is purchasing the Units in compliance with or pursuant to exemptions from any prospectus, registration or similar requirements under the applicable securities laws of the international jurisdiction in which the Purchaser resides (and the Purchaser shall deliver to the Company such further particulars of such applicable securities laws or exemptions and the Purchaser’s qualifications thereunder as the Company may request), and the purchase and sale of the Units does not trigger any obligation to prepare and file a prospectus, registration statement or similar document, or any other report with respect to such purchase and/or any registration on the part of the Company; |
(c) | no applicable securities laws of the international jurisdiction in which the Purchaser resides require the Company to make any filings or seek any approvals of any kind whatsoever from any securities commission or regulatory authority of any kind whatsoever in the jurisdiction of residence of the Purchaser; and |
(d) | the Purchaser will not sell or otherwise dispose of any of Units (or any securities underlying the Units or that may be issued in connection with the Units) except in accordance with all applicable securities laws, including, without limitation, the rules, regulations and policies of the Exchange and the OTCQB. If the Purchaser sells or otherwise disposes of any of the Units (or any securities underlying the Units or that may be issued in connection with the Units), the Purchaser will obtain from the person acquiring them a covenant in the same form as provided for in this Subscription Agreement, and the Company shall not have any obligation to register any purported sale or disposition of the Units (or any securities underlying the Units or that may be issued in connection with the Units) which may be in violation of such laws and any such sale, transfer or other disposition shall be null and void and of no force or effect. |
4.6 | The Purchaser acknowledges that: |
(a) | no securities commission or similar regulatory authority has reviewed or passed on the merits of the Units; |
(b) | there is no government or other insurance covering the Units; |
(c) | there are risks associated with the purchase of the Units; |
(d) | there are restrictions on the Purchaser’s ability to resell the Units (or any securities underlying the Units or that may be issued in connection with the Units) and it is the responsibility of the Purchaser to find out what those restrictions are and to comply with them before selling any of the Units (or any securities underlying the Units or that may be issued in connection with the Units); and |
(e) | the Company has advised the Purchaser that the Company is relying on an exemption from the requirements to provide the Purchaser with a prospectus or registration statement and to sell the Units through a person or company registered to sell securities under applicable securities laws and, as a consequence of acquiring the Units pursuant to this exemption, certain protections, rights and remedies provided by the applicable securities laws, including statutory rights of rescission or damages, will not be available to the Purchaser. |
4.7 | If the Purchaser is not resident in British Columbia, the Purchaser certifies that the Purchaser is not resident in British Columbia and acknowledges that: |
(a) | the Purchaser is knowledgeable of, or has been independently advised as to, the Other Applicable Securities Laws (as defined below); |
(b) | the Purchaser is purchasing the Units pursuant to exemptions from any prospectus, registration or similar requirements under the Other Applicable Securities Laws, or, if such is not applicable, the Purchaser is permitted to purchase the Units under the Other Applicable Securities Laws without the need to rely on exemptions; and |
(c) | the distribution of the Units to the Purchaser by the Company complies with all of the Other Applicable Securities Laws. |
4.8 | The Purchaser will comply with all applicable securities laws and with the policies of the Exchange and the OTCQB concerning the purchase of, the holding of and the resale restrictions on the Units (or any securities underlying the Units or that may be issued in connection with the Units). |
4.9 | The Purchaser is aware that the offer made by this subscription is irrevocable and requires acceptance by the Company and the acceptance for filing thereof by the Exchange and will not become an agreement between the Purchaser and the Company until accepted by the Company signing in the space above. |
4.10 | If an individual, the Purchaser has attained the age of majority and is legally competent to execute and deliver this subscription and to take all actions required pursuant hereto and if a corporation, partnership or other entity, the Purchaser has been duly incorporated, created or organized and validly exists under the laws of its jurisdiction of incorporation, creation or organization and all necessary approvals by its directors and shareholders have been obtained for the execution and delivery of this subscription. |
4.11 | The execution and delivery of this Subscription Agreement and the performance and compliance with the terms hereof will not result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of any constating documents, by-laws or resolutions of the Purchaser or any indenture, contract, agreement (whether written or oral), instrument or other document to which the Purchaser is a party or subject, or any judgment, decree, order, statute, rule or regulation applicable to the Purchaser; |
4.12 | Upon acceptance of this subscription by the Company, this Subscription Agreement, including all exhibits and appendices, will constitute a legal, valid and binding contract of purchase enforceable against the Purchaser in accordance with its terms and will not violate or conflict with the terms of any restriction, agreement or undertaking respecting purchases of securities by the Purchaser. |
4.13 | The Purchaser’s purchase of the Units has not been made through or as a result of, the distribution of the securities comprising the Units is not being accompanied by and the Purchaser is not aware of, any advertisement of the securities in printed media of general and regular paid circulation, radio, television or electronically. |
4.14 | No prospectus or offering memorandum within the meaning of applicable securities laws or any other document purporting to describe the business and affairs of the Company has been delivered to the Purchaser in connection with the Offering. |
4.15 | No person has made to the Purchaser any written or oral representation; |
(a) | that any person will resell or repurchase any of the Units (or any securities underlying the Units or that may be issued in connection with the Units); |
(b) | that any person will refund all or any part of purchase price of the Units; |
(c) | as to the future price or value of any of the Units; or |
(d) | that any of the Units (or any securities underlying the Units or that may be issued in connection with the Units) will be listed and posted for trading on a stock exchange or marketplace or that application has been made to list and post any of the Units (or any securities underlying the Units or that may be issued in connection with the Units) for trading on a stock exchange or marketplace. |
4.16 | None of the Units are being purchased by the Purchaser with knowledge of any material fact about the Company that has not been generally disclosed to the public. |
4.17 | In the case of a person signing this subscription as agent for a disclosed principal, each beneficial Purchaser for whom the agent is purchasing, or is deemed under NI 45-106 to be purchasing, as principal, for its own account and not for the benefit of any other person, and such person is duly authorized to enter into this Subscription Agreement and to execute all documentation in connection with the purchase on behalf of each such beneficial Purchaser. |
4.18 | The funds representing the aggregate Subscription Price in respect of the Units which will be advanced by or on behalf of the Purchaser to the Company hereunder do not represent proceeds of crime for the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (for the purposes of this section 4.19 the “ PCMLTFA ”) and the Purchaser acknowledges and agrees that the Company may be required by law to provide the securities regulators with a list setting forth the identities of the beneficial purchasers of the Units, or disclosure pursuant to the PCMLTFA. Notwithstanding that the Purchaser may be purchasing Units as agent on behalf of an undisclosed principal, the Purchaser agrees to provide, on request, particulars as to the identity of such undisclosed principal as may be required by the Company in order to comply with the foregoing. To the best of the Purchaser’s knowledge (a) none of the subscription funds provided by or on behalf of the Purchaser (i) have been or will be derived directly or indirectly from or related to any activity that is deemed criminal under the laws of Canada, the United States, or any other jurisdiction, or (ii) are being tendered on behalf of a person or entity who has not been identified to the Purchaser and, (b) the Purchaser will promptly notify the Company if the Purchaser discovers that any of such representations cease to be true, and shall provide the Company with appropriate information in connection therewith. |
4.19 | The Purchaser is at arm’s-length within the meaning of Securities Laws (as defined herein) of the Company. |
4.20 | The Purchaser is not, with respect to the Company or any of its affiliates, a “control person”, as defined under applicable securities laws, and the acquisition of the Units hereunder by the Purchaser will not result in the Purchaser becoming a “control person”. |
4.21 | The Purchaser has been advised to seek tax, investment and independent legal advice and any other professional advice the Purchaser considers appropriate in connection with the Purchaser’s purchase of the Units and the Purchaser confirms that the Purchaser has not relied on the Company or its legal counsel in any manner in connection with the Purchaser’s purchase of the Units. |
5.1 | The Purchaser acknowledges and agrees (on its own behalf and, if applicable, on behalf of each beneficial purchaser for whom the Purchaser is contracting hereunder) with the Company (which acknowledgements and agreements shall survive the Closing) that: |
(a) | This subscription forms part of the Offering. |
(b) | The Units are subject to resale restrictions under applicable Securities Laws (defined below) and the Purchaser covenants that it will not resell the Units (or any securities underlying the Units or that may be issued in connection with the Units), except in compliance with such laws and the Purchaser acknowledges that it is solely responsible (and the Company is not in any way responsible) for such compliance. The Purchaser is advised to consult the Purchaser’s own legal advisors in this regard. For purposes hereof, “ Securities Laws ” means the Securities Act (British Columbia) (the “ B.C. Act ”), the 1933 Act, and the rules and regulations promulgated thereunder and all orders, rulings, published policy statements, notices, interpretation notes, directions and instruments thereunder and, if the Purchaser is not resident in British Columbia, also means the Other Applicable Securities Laws. |
(c) | The Units are being offered for sale only on a “private placement” basis. |
(d) | In purchasing the Units, the Purchaser has relied solely upon publicly available information relating to the Company and not upon any oral or written representation as to any fact or otherwise made by or on behalf of the Company or any other person associated therewith, the decision to purchase the Units was made on the basis of publicly available information. |
(e) | The Purchaser’s ability to transfer the Units (or any securities underlying the Units or that may be issued in connection with the Units) is limited by, among other things, the Securities Laws and the policies of the Exchange. In particular the Purchaser acknowledges having been informed that the Units (or any securities underlying the Units or that may be issued in connection with the Units), are subject to resale restrictions under National Instrument 45-102 – Resale of Securities (“ NI 45-102 ”) and may not be sold or otherwise disposed of in Canada for a period of four months from the date of distribution of the Units, unless a statutory exemption is available or a discretionary order is obtained from the applicable Securities Commission allowing the earlier resale thereof, and may be subject to additional resale restrictions if such sale or other disposition would be a “control distribution”, as that term is defined in NI 45-102. If the Purchaser is not resident in Canada, additional resale restrictions may apply under the Other Applicable Securities Laws. |
(f) | The representations, warranties, covenants and acknowledgements of the Purchaser contained in this Subscription Agreement, and in any appendices or other documents or materials executed and delivered by the Purchaser hereunder, are made by the Purchaser with the intent that they may be relied upon by the Company and its professional advisors in determining the Purchaser’s eligibility to purchase the Units. The Purchaser further agrees that by accepting the Units the Purchaser shall be representing and warranting that the foregoing representations and warranties are true as at the Closing with the same force and effect as if they had been made by the Purchaser at the Closing and that they shall survive the purchase by the Purchaser of the Units and shall continue in full force and effect notwithstanding any subsequent disposition by the Purchaser of the Units (or any securities underlying the Units or that may be issued in connection with the Units). The Purchaser hereby agrees to indemnify and save harmless the Company and its directors, officers, employees, advisors, affiliates, shareholders and agents, and their respective counsel, against all losses, claims, costs, expenses and damages or liabilities which any of them may suffer or incur and which are caused by or arise from any inaccuracy in, breach or misrepresentation by the Purchaser of, any such representations, warranties and covenants. The Purchaser undertakes to immediately notify the Company of any change in any statement or other information relating to the Purchaser set forth herein or in an Investor Certificate, as the case may be, that takes place prior to the Closing Date. |
(g) | The sale and delivery of the Units to the Purchaser is conditional upon such sale being exempt from the requirement to file a prospectus or registration statement or to prepare and deliver an offering memorandum or similar document under any applicable statute relating to the sale of the Units or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement of filing a prospectus or registration statement or preparing and delivering an offering memorandum or similar document. The Purchaser further acknowledges and agrees that the Company may be required to provide applicable securities regulatory authorities with a list setting forth the identities of the beneficial purchasers of the Units and that the Purchaser will provide, on request, particulars as to the identity of such beneficial purchasers as may be required by the Company in order to comply with the foregoing. |
(h) | The Purchaser and, if the person signing this subscription is acting as agent for a disclosed principal, such agent acknowledge and consent to the fact that the Company is collecting the Purchaser’s, and, if applicable, such agent’s personal information (as that term is defined under applicable privacy legislation, including, without limitation, the Personal Information Protection and Electronic Documents Act (Canada) and any other applicable similar, replacement or supplemental provincial or federal legislation or laws in effect from time to time), for the purpose of completing this Subscription Agreement. The Purchaser and, if the person signing this subscription is acting as agent for a disclosed principal, such agent acknowledge and consent to the Company retaining such personal information for as long as permitted or required by law or business practices. The Purchaser and, if the person signing this subscription is acting as agent for a disclosed principal, such agent further acknowledges and consents to the fact that the Company may be required by the Securities Laws, the rules and policies of any stock exchange or the rules of the Investment Industry Regulatory Organization of Canada to provide regulatory authorities, stock exchanges or marketplaces with any personal information provided by the Purchaser or, if applicable, such agent in this Subscription Agreement. The Purchaser and, if the person signing this subscription is acting as agent for a disclosed principal, such agent represent and warrant that it has the authority to provide the consents and acknowledgements set out in this Subsection 5.1(h). In addition to the foregoing, the Purchaser and, if the person signing this subscription is acting as agent for a disclosed principal, such agent acknowledge and agree that the Company may use and disclose the Purchaser’s and, if applicable, such agent’s personal information, and consents thereto, as follows: |
(i) | for internal use with respect to managing the relationships between and contractual obligations of the Company and the Purchaser; |
(ii) | for use and disclosure for income tax related purposes, including without limitation, where required by law, disclosure to the Canada Revenue Agency; |
(iii) | disclosure to stock exchanges, marketplaces and securities regulatory authorities and other regulatory bodies having jurisdiction with respect to approval or acceptance for filing of the Offering, reports of trades and similar stock exchange, marketplace or regulatory filings; |
(iv) | disclosure to a governmental or other authority to which the disclosure is required by court order or subpoena compelling such disclosure and where there is no reasonable alternative to such disclosure; |
(v) | disclosure to professional advisers of the Company in connection with the performance of their professional services; |
(vi) | disclosure to any person where such disclosure is necessary for legitimate business reasons; |
(vii) | disclosure to a court determining the rights of the parties under this Subscription Agreement; or |
(viii) | for use and disclosure as otherwise required or permitted by law. |
(i) | The Purchaser is aware of the characteristics of the Units and the risks relating to an investment therein and agrees that the Purchaser must bear the economic risk of his, her or its investment in the Units. |
(j) | The Purchaser has such knowledge in financial and business affairs as to be capable of evaluating the merits and risks of the Purchaser’s proposed investment in the Units. |
(k) | This subscription is conditional upon its acceptance by the Company and the Subscription Agreement is conditional upon the acceptance of the Offering for filing by the Exchange. |
(l) | The Purchaser is aware that (i) the Company may complete additional financings in the future in order to develop the Company’s business and to fund its ongoing development, (ii) there is no assurance that such financings will be available and, if available, on reasonable terms, (iii) any such future financings may have a dilutive effect on the Company’s securityholders, including the Purchaser, and (iv) if such future financings are not available, the Company may be unable to fund its on-going development and the lack of capital resources may result in the failure of the Company’s business. |
(m) | A placement agent’s fee or finder’s fee may be payable by the Company to [the Placement Agent / Sprott Global Resource Investments, Ltd. (the “ Placement Agent ”)] or any finder, as applicable, who introduces a purchaser to the Company and such person’s Subscription Agreement is accepted by the Company. |
(n) | The Purchaser is aware that the Offering is not subject to a minimum aggregate subscription amount, and the Company may close the Offering for less than the maximum aggregate amount indicated or may increase the size of the Offering. |
6.1 | In addition to the acknowledgements given in Article 5 hereof, the Purchaser acknowledges that the Units (or any securities underlying the Units or that may be issued in connection with the Units) will be subject to statutory resale restrictions. |
6.2 | The Purchaser acknowledges that the Common Shares and Warrants and, if any Warrants are exercised prior to the expiry of the statutory resale restrictions, any Warrant Shares, will have attached to them whether through the electronic deposit of CDS, an ownership statement issued under a direct registration system or other electronic book-entry system, or on certificates that may be issued, as applicable, legends setting out the resale restrictions under applicable Securities Laws and required by the Exchange substantially in the following form and with the information completed: |
(a) | Canadian restrictive legends: |
(b) | U.S. restrictive legend (the “U.S. Legend”): |
6.3 | The Purchaser acknowledges that the Units are being offered pursuant to an exemption from the registration requirements of the 1933 Act pursuant to Regulation S or Regulation D under the 1933 Act. The Purchaser further acknowledges that the Units (or any securities underlying the Units or that may be issued in connection with the Units) have not been registered under the 1933 Act or the securities laws of any State of the United States and that the Company does not intend to register any of the Units (or any securities underlying the Units or that may be issued in connection with the Units) under the 1933 Act or the securities laws of any state of the United States and has no obligation to do so. The Units may not be offered or sold to a U.S. Person or a person in the United States unless registered in accordance with United States federal securities laws and all applicable state securities laws or exemptions from such requirements are available. |
6.4 | In the case of a sale of the Common Shares or the Warrant Shares by the Purchaser made pursuant to either (A) the provisions of Rule 144 of the 1933 Act; or (B) an effective registration statement under the 1933 Act, the Company shall, at the Company’s own cost, use commercially reasonable efforts to cause the transfer agent to remove the U.S. Legend and deliver unlegended share certificates to the Purchaser within three trading days following the delivery by the Purchaser to the Company or the Company’s transfer agent of a share certificate endorsed with the U.S. Legend. If the Company’s transfer agent fails to deliver an unlegended share certificate within such three trading day period, the Company will indemnify the Purchaser [(other than U.S. investors that are (i) brokers employed by the Placement Agent or its affiliates or (ii) one of the Exploration Capital Limited Partnerships managed by the Placement Agent or its affiliates)] for any damages and costs incurred as a result thereof, provided that: (i) such indemnity shall not extend to any lost profits of the Purchaser; and (ii) the aggregate amount of such indemnity in respect of any one legend removal shall not exceed US$5,000. For greater clarity, if, in the case of a sale pursuant to, and subject to satisfaction of the conditions required by, (A) or (B) above, the Company or the Company’s transfer agent requires a legal opinion to remove the U.S. Legend from any certificates representing the Common Shares or the Warrant Shares as contemplated in this Section, the Company shall use commercially reasonable efforts to cause its legal counsel to deliver such legal opinion at the Company’s expense. |
6.5 | If, at any time before the first anniversary of the expiry of the Warrants, the Company determines to prepare and file with the United States Securities and Exchange Commission (the “ SEC ”) a registration statement relating to an offering for the Company’s own account or the account of others under the 1933 Act of any of its equity securities, other than a registration statement on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to the Purchaser a written notice of such determination and, if within 15 days after the date of the delivery of such notice, the Purchaser shall so request in writing, the Company shall include in such registration statement all or any part of the Common Shares or the Warrant Shares issued or issuable to the Purchaser (and any securities issued or then issuable upon any stock split, dividend or other distribution, capitalization or similar event with respect to the foregoing) (collectively, the “ Registrable Securities ”) that the Purchaser requests to be registered, but the Company shall not be required to register any Registrable Securities that (i) are eligible for resale pursuant to Rule 144 of the 1933 Act, and (ii) would continue to be eligible for resale pursuant to Rule 144 of the 1933 Act if the Company ceased to comply with the current information requirements of Rule 144(c). |
7.1 | The Company hereby represents and warrants to, and covenants with, the Purchaser, which representations, warranties and covenants shall survive the Closing, that as at the execution date of this Subscription Agreement and the Closing Date: |
(a) | the Company is a valid and subsisting corporation duly incorporated and in good standing under the Nevada Revised Statutes and each subsidiary representing 10% or more of the Company’s consolidated assets or revenues (a “ Material Subsidiary ”) is a valid and subsisting corporation duly created and in good standing under the laws of the jurisdictions in which it exists with respect to all acts necessary to maintain its corporate existence; |
(b) | all of the issued and outstanding shares in the capital of each Material Subsidiary have been duly authorized and validly issued, are fully paid and are directly or indirectly beneficially owned by the Company, free and clear of any liens, none of the outstanding securities of any Material Subsidiary was issued in violation of the pre-emptive or similar rights of any security holder of such subsidiary and there are no options, warrants, purchase rights, or other contracts or commitments that could require the Company to sell, transfer or otherwise dispose of any securities of any Material Subsidiary; |
(c) | prior to the Closing, neither the Company nor any Material Subsidiary will have taken any steps to terminate its existence, to amalgamate or merge into another corporation, to continue into any other jurisdiction or to otherwise change its corporate existence and will not have received any notice or other communication from any person or governmental authority indicating that there exists any situation which could result in the termination of its existence; |
(d) | the Company and each Material Subsidiary is not insolvent, and no acts or proceedings have been taken by or against it in connection therewith, the Company has not received any notice in respect of, and the Company and each Material Subsidiary is not in the course of, liquidation, winding-up, dissolution, bankruptcy or reorganization; |
(e) | the Company and each Material Subsidiary has all requisite corporate power and capacity to possess its assets and to conduct its business as now carried on by it or proposed to be carried on by it; |
(f) | the Company and each Material Subsidiary is duly qualified and registered or licensed to carry on business in the jurisdictions in which it is required to be so registered or licensed to carry on business or own property or assets and, to the Company’s knowledge, is carrying on its business and owns its property and assets, in all material aspects, in accordance with all applicable laws, regulations and other requirements and has not received any notice of a breach thereof which would have a material adverse effect on the Company, except where it is in good faith attempting to remedy such breach or contesting such notice; |
(g) | neither the Company nor any Material Subsidiary is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and no such actions, suits or proceedings have been threatened or, to the Company’s knowledge, are pending, except as disclosed in the Public Record (for the purposes hereof, “Public Record” means all documents containing information regarding the Company, including the Company’s audited annual and unaudited interim financial statements for the last two financial years (collectively the “ Financial Statements ”) filed by the Company with various Canadian securities commissions and are available on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com and the United States Securities and Exchange Commission is available on the Electronic Data Gathering and Retrieval (EDGAR) website at www.sec.gov); |
(h) |
the Company is the beneficial owner of the properties, business and assets or the interests in the properties, business and assets disclosed in the Public Record, all agreements by which the Company holds an interest in a property, business or asset are in good standing according to their terms except as disclosed in the Public Record or where any such default would not have a material adverse effect on the Company;
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(i) | the Public Record and the representations contained in this Agreement are accurate in all material respects and omit no fact, the omission of which would make the filings comprising the Public Record or such representations misleading in light of the circumstances in which such statements or representations were made; |
(j) | there is no “material fact” or “material change” (as those terms are defined in applicable Securities Laws) affecting the Company that has not been generally disclosed to the public (without restricting the statutory definition of such terms, a “material fact” is a fact that would reasonably be expected to have a significant effect on the market price or value of the Company’s securities and “material change” is a change (or a decision to implement a change) in the business, operations or capital of the Company that would reasonably be expected to have a significant effect on the market price or value of its securities); |
(k) | the Financial Statements accurately reflect the financial position of the Company as at the date thereof and have been properly prepared in accordance with accounting principles generally accepted in the United States of America; |
(l) | no material adverse change in the Company’s financial position has taken place since the date of the latest balance sheet contained in the Financial Statements, except as disclosed in the Public Record; |
(m) | all tax returns, reports, elections, remittances and payments of the Company and its Material Subsidiaries required by applicable laws have been filed or made, except where the Company is contesting in good faith any re-assessments of its taxes payable thereunder, and are true, complete and correct except where the failure to make such filing, election, or remittance and payment shall not have a material adverse effect on the Company or its business; |
(n) | the Company has all requisite corporate power and authority to issue and sell the Units and to execute, deliver and perform its obligations under this Agreement; |
(o) | the Company has complied, and will comply, with all applicable corporate and securities laws and regulations in connection with the offer, sale and issuance of the Units; |
(p) | the execution and delivery of this Agreement, the offer, sale and issuance of the Units, and the delivery of the certificates representing them, by the Company do not and will not conflict with and do not and will not result in a breach of any of the terms, conditions or provisions of its constating documents or any agreement or instrument to which the Company is a party; |
(q) | this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary corporate action on the part of the Company and, subject to acceptance by the Company, this Agreement constitutes a valid obligation of the Company legally binding upon it and enforceable in accordance with its terms subject to such limitations and prohibitions in applicable laws relating to bankruptcy, insolvency, liquidation, moratorium, reorganization, arrangement or winding-up and other laws, rules and regulations of general application affecting the rights, powers, privileges, remedies and interests of creditors generally; |
(r) | upon issue and delivery at the Closing, the Common Shares comprising the Units will be validly issued as fully paid and non-assessable and the Warrants will be validly issued and the certificates representing such Common Shares and Warrants will be validly delivered; |
(s) | at the Closing, the Warrant Shares will have been duly allotted and reserved for issuance and, when issued upon the due exercise of the Warrants, will be duly issued as fully paid and non-assessable Common Shares; |
(t) | to the Company’ knowledge, neither the Company nor its subsidiaries, nor to the knowledge of the Company, any director, officer, employee, consultant, representative or agent of the foregoing, has (i) violated any anti-bribery or anti-corruption laws applicable to the Company and its subsidiaries, including but not limited to Canada’s Corruption of Foreign Public Officials Act and the United States Foreign Corrupt Practices Act, or (ii) offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, that goes beyond what is reasonable and customary: (A) to any government official, whether directly or through any other person, for the purpose of influencing any act or decision of a government official in his or her official capacity, inducing a government official to do or omit to do any act in violation of his or her lawful duties, securing any improper advantage, inducing a government official to influence or affect any act or decision of any governmental authority, or assisting any representative of the Company or its subsidiaries in obtaining or retaining business for or with, or directing business to, any person; or (B) to any person in a manner which would constitute or have the purpose or effect of public or commercial bribery, or the acceptance of or acquiescence in extortion, kickbacks, or other unlawful or improper means of obtaining business or any improper advantage, and neither the Company nor its subsidiaries nor to the knowledge of the Company, any director, officer, employee, consultant, representative or agent of foregoing, has (i) conducted or initiated any review, audit, or internal investigation that concluded the Company, a subsidiary or any director, officer, employee, consultant, representative or agent of the foregoing violated such laws or committed any material wrongdoing, or (ii) made a voluntary, directed, or involuntary disclosure to any governmental authority responsible for enforcing anti-bribery or anti-corruption laws, in each case with respect to any alleged act or omission arising under or relating to non-compliance with any such laws, or received any notice, request, or citation from any person alleging non-compliance with any such laws; |
(u) | none of the Company, its affiliates, or , to the Company’s knowledge, any person acting on their behalf (other than the Placement Agent or any finder, as to whose activities no representations or warranties are made) has engaged or will engage in any form of “general solicitation” or “general advertising” (as those terms are used in Regulation D), including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or other form of telecommunications, including electronic display, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising in the United States in connection with the Offering; |
(v) | none of the Company, its affiliates or, to the Company’s knowledge, any person acting on its or their behalf (other than the Placement Agent or any finder, as to whose activities no representations or warranties are made) has made or will make any “directed selling efforts” (as such term is defined in Regulation S under the 1933 Act) in the United States with respect to the Offering and, without limiting such definition, “directed selling efforts” generally means any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the securities being offered and includes placing an advertisement in a publication “with a general circulation in the United States” that refers to the offering of securities being made in reliance upon Regulation S under the 1933 Act; |
(w) | no order ceasing or suspending trading in the Units nor prohibiting sale of the Units has been issued to, and is outstanding against, the Company or its directors, officers or promoters and, to the Company’s knowledge, no investigations or proceedings for such purposes are pending or threatened; |
(x) | the Company will apply to, and use commercially reasonable efforts to obtain the listing of the Common Shares issuable under the Offering on, the Exchange; |
(y) | the Company is a reporting issuer under Securities Laws in British Columbia, Alberta and Ontario, and the Company is not in default in any material respect of any requirement of such Securities Laws; |
(z) | the Common Shares are listed for trading on the Exchange and the Company is not in default in any material respect of any requirement of the Exchange; |
(aa) | the Company’s registrar and transfer agent for its Common Shares has been duly appointed; and |
(bb) | there shall not be any consents, approvals, authorizations, orders or agreements of any stock exchanges, securities commissions or similar authorities, governmental agencies or regulators, courts or any other persons which may be required for the issuance of the Units and the delivery of certificates representing the Units to the Purchaser, not obtained and not in effect on the date of delivery of such certificates; |
(cc) | it will reserve or set aside sufficient shares in its treasury to issue the Common Shares and Warrant Shares; and |
(dd) | no general solicitation or general advertising with respect to the sale of the Units offered hereby or of any of the securities of the Company has been made or is being made in relation to or in conjunction with the distribution pursuant to the Offering. |
7.2 | The Company shall perform and carry out all of the acts and things to be completed by it as provided in this Subscription Agreement. |
8.1 | Time shall, in all respects, be of the essence hereof. |
8.2 | All references herein to monetary amounts are to lawful money of the Canada, unless indicated otherwise. |
8.3 | The headings contained herein are for convenience only and shall not affect the meaning or interpretation hereof. |
8.4 | Except as expressly provided for in this Subscription Agreement and in the agreements, instruments and other documents provided for, contemplated or incorporated herein, this Subscription Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings. This Subscription Agreement may be amended or modified in any respect by written instrument only. |
8.5 | The terms and provisions of this Subscription Agreement shall be binding upon and enure to the benefit of the Purchaser, the Company and their respective successors and assigns; provided that, except as herein provided, this Subscription Agreement shall not be transferable or assignable by any party without the written consent of the other. |
8.6 | This Subscription Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and the parties hereto hereby irrevocably attorn to the exclusive jurisdiction of the courts of the Province of British Columbia. |
8.7 | This Subscription Agreement is intended to and shall take effect on the date of acceptance of the subscription by the Company, notwithstanding its actual date of execution or delivery by any of the parties hereto, and shall be dated for reference as of the date of such acceptance by the Company. |
8.8 | The Company shall be entitled to rely on delivery of a facsimile or electronic copy of an executed subscription and acceptance by the Company of such subscription shall be legally effective to create a valid and binding Agreement between the Purchaser and the Company in accordance with the terms hereof. |
8.9 | The Purchaser acknowledges and agrees that all costs incurred by the Purchaser (including any fees and disbursements of counsel retained by the Purchaser) relating to the sale of the Units to the Purchaser shall be borne by the Purchaser. |
8.10 | The Purchaser acknowledges that the Purchaser has consented to and requested that all documents evidencing or relating in any way to the issuance of the Units be drawn up in the English language only. Le soussigne reconnait par les presentes avoir consenti et exige que tous les documents faisant foi ou se rapportant de quelque maniere a la vente des titres offerts soient rediges en anglais seulement. |
8.11 | Each of the parties hereto upon the request of the other parties hereto, whether before or after the Closing, shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, documents, assignments, transfers, conveyances, powers of attorney and assurances as reasonably may be necessary or desirable to complete, better evidence, or perfect the transactions contemplated herein. |
Canadian Dollars
Beneficiary bank:
Beneficiary bank address:
Transit #:
Institution #:
SWIFT:
Beneficiary name:
Beneficiary account:
Intermediary bank
Bank name:
SWIFT:
ABA:
Canadian Clearing Code
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I. | If the Purchaser is not an individual, is subscribing for CDN$150,000 or more and is an entity not created or used solely to purchase or hold securities, please complete Section I – Minimum CDN$150,000 Investment below. |
II. | If the Purchaser does not meet the requirements of Section I but is a non-individual Accredited Investor, please make the appropriate selection under Section II – Non-Individual Accredited Investor below. |
III. | If the Purchaser does not meet the requirements of Section I but is an individual Accredited Investor, please make the appropriate selection under Section III – Individual Accredited Investor below. |
IV. | If none of the above applies, please make the appropriate selection under Section IV – Employees, Officers, Directors and Consultants below. |
______ | (a) | A non-individual purchaser purchasing securities having an acquisition cost of not less than CDN$150,000 paid in cash and was not created or used solely to purchase or hold securities in reliance on the exemption from the dealer registration requirement or prospectus requirement available under section 2.10 of NI 45-106; |
______ | (a) | except in Ontario, a Canadian financial institution, or a Schedule III bank; |
______ | (b) | except in Ontario, the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); |
______ | (c) | except in Ontario, a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary; |
______ | (d) | except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer; |
______ | (e) | an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d); |
______ | (e.1) | an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador); |
______ | (f) | except in Ontario, the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada; |
______ | (g) | except in Ontario, a municipality, public board or commission in Canada or a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec; |
______ | (h) | except in Ontario, a national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or an agency of that government; |
______ | (i) | except in Ontario, a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada; |
______ | (j) | an investment fund that distributes or has distributed its securities only to; |
(i) | a person that is or was an accredited investor at the time of the distribution; |
(ii) | a person that acquires or acquired securities in the circumstances referred to in sections 2.10 of NI 45-106 [ Minimum amount investment ], and 2.19 of NI 45-106 [ Additional investment in investment funds ], or |
(iii) | a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 of NI 45-106 [ Investment fund reinvestment ]; |
______ | (k) | an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator, or, in Québec, the securities regulatory authority has issued a receipt; |
______ | (l) | a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be; |
______ | (m) | a person acting on behalf of a fully managed account 1 managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; |
______ | (n) | a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded; |
______ | (o) | a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; |
______ | (p) | an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser; |
______ | (q) | a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accreted investor’s former spouse. |
III. | INDIVIDUAL ACCREDITED INVESTOR |
______ | (a) | an individual who, either alone or with a spouse, 2 beneficially owns, directly or indirectly, financial assets 3 having an aggregate realizable value that before taxes, but net of any related liabilities 3 (“Net Financial Assets”), exceeds CDN$1,000,000; |
______ | (a.1) | an individual who beneficially owns financial assets 3 having an aggregate realizable value that, before taxes but net of any related liabilities 3 (“Net Financial Assets”), exceeds CDN$5,000,000; |
______ | (b) | an individual whose net income before taxes (“Net Income”) exceeded CDN$200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse 2 exceeded CDN$300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; |
______ | (c) | an individual who, either alone or with a spouse 2 , has net assets 4 of at least CDN$5,000,000; |
______ | (d) | a person, other than an individual or investment fund, that has net assets 4 of at least CDN$5,000,000 as shown on its most recently prepared financial statements; |
______ | (a) | an employee, executive officer, director or consultant of the Company; |
______ | (b) | an employee, executive officer, director or consultant of a related entity of the Company; or |
______ | (c) | a permitted assign of a person referred to in paragraphs (a) or (b). |
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(a) | a member of the board of directors of a company or an individual who performs similar functions for a company; and |
(b) | with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company; |
(a) | a chair, vice-chair or president, |
(b) | a vice-president in charge of a principal business unit, division or function including sales, finance or production, or |
(c) | performing a policy-making function in respect of the issuer; |
(a) | cash, |
(b) | securities, or |
(c) | a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation |
(a) | a trustee, custodian, or administrator acting on behalf of, or for the benefit of the person, |
(b) | a holding entity of the person, |
(c) | a registered retirement savings plan or registered retirement income fund of the person, |
(d) | a spouse of the person, |
(e) | a trustee, custodian, or administrator acting on behalf of, or for the benefit of the spouse of the person, |
(f) | a holding entity of the spouse of the person, or |
(g) | a registered retirement savings plan or registered retirement income fund of the spouse of the person; |
(a) | an individual, |
(b) | a corporation, |
(c) | a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and |
(d) | an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative; |
(a) | is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual; |
(b) | is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender; or |
(c) | in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta); |
(a) | is not a debt security; and |
(b) | carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing. |
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Certificate No:
2016-[
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Number of Warrants: [●]
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Date: July [●], 2016
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1. | Exercise of Warrants . |
2. | Anti-Dilution Protection . |
(i) | “ Current Market Price per Share ”, at any date, means the price per share of Common Stock (denominated in Canadian dollars based, if necessary, on the noon rate of exchange as reported by the Bank of Canada) equal to the VWAP for the five trading-days preceding such date (i) on the TSX, or (ii) if the Common Stock is not traded on the TSX, on any other recognized stock exchange, or (iii) if the Common Stock is not traded on a recognized stock exchange, on the over-the-counter market. If the Common Stock is not then traded in the over-the-counter market or on a recognized stock exchange, the Current Market Price of the Common Stock shall be the fair market value of the Common Stock as determined in good faith by the board of directors of the Company after consultation with an internationally recognized investment dealer or investment banker; |
(ii) | “ director ” means a director of the Company from time to time and reference herein to an “ action by the directors ” means an action by the directors of the Company as a board or, whenever duly empowered, an action by a committee of directors; |
(iii) | “ Dividends Paid in the Ordinary Course ” means dividends paid on the Common Stock in any fiscal year of the Company in cash, provided that the amount of such dividends does not in such fiscal year exceed 50% of the consolidated net income of the Company before extraordinary items for the period of 12 consecutive months ended immediately prior to the first day of such fiscal year less the amount of all cash dividends payable on all shares ranking prior to or on a parity with the Common Stock in respect of the payment of dividends (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of 12 consecutive months or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company); |
(iv) | “ recognized stock exchange ” means a stock exchange or quotation system recognized by the Canadian Securities Administrators; |
(v) | “ TSX ” means the Toronto Stock Exchange; and |
(vi) | “ VWAP ”, for any period, means the volume weighted average trading price of the Common Stock, calculated by dividing the total value by the total volume of Common Stock traded for the trading days included in the relevant period. |
(a) | If and whenever at any time prior to the Time of Expiry the Company shall: |
(i) | declare a dividend or make a distribution on the Common Stock payable in Common Stock (or securities exchangeable for or convertible into Common Stock) |
(ii) | subdivide, redivide or change the outstanding Common Stock into a greater number of shares of Common Stock; or |
(iii) | reduce, combine or consolidate the outstanding Common Stock into a lesser number of shares of Common Stock, |
(b) | If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the issuing of rights, options or warrants to all or substantially all of the holders of the Common Stock entitling them for a period expiring not more than forty-five (45) days after such record date (the “ Rights Period ”) to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or having a conversion or exchange price per share) which is less than 95% of the Current Market Price per Share as of three days prior to the record date for such issue (any of such events being called a “ Rights Offering ”), then effective immediately after the end of the Rights Period the Exercise Price shall be adjusted to a price determined by multiplying the applicable Exercise Price in effect at the end of the Rights Period by a fraction the numerator of which shall be the sum of: |
(i) | the number of shares of Common Stock outstanding as of the record date for the Rights Offering; and |
(ii) | a number determined by dividing (A) either (i) the product of the number of shares of Common Stock issued or subscribed during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering and the price at which such Common Stock is offered, or (ii) as the case may be, the product of the number of shares of Common Stock for or into which the convertible or exchangeable securities offered during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering are exchangeable or convertible and the exchange or conversion price of the convertible or exchangeable securities so issued, by (B) the Current Market Price per Share as of three days prior to the record date for the Rights Offering, and |
(c) | If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the payment, issue or distribution to all or substantially all of the holders of the Common Stock of (i) a dividend, (ii) any property, cash or assets (including evidences of indebtedness), or (iii) rights, options, warrants, or other securities (including, without limitation, securities convertible into or exchangeable for Common Stock), and such payment, issue or distribution does not constitute a Dividend Paid in the Ordinary Course, a Common Stock Reorganization or a Rights Offering (any of such non-excluded events being herein called a “ Special Distribution ”), the Exercise Price shall be adjusted effective immediately after such record date to a price determined by multiplying the applicable Exercise Price in effect on such record date by a fraction: |
(i) | the numerator of which shall be: |
(1) | the product of the number of shares of Common Stock outstanding on such record date and the Current Market Price per Share as of three days prior to such record date; less |
(2) | the aggregate fair market value, as determined by action by the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, to the holders of the Common Stock of such dividend, property, cash, assets, rights, options, warrants or other securities so paid, issued or distributed less the aggregate fair market value, as determined by action of the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, of the consideration, if any, received therefor by the Company, and |
(ii) | the denominator of which shall be the number of shares of Common Stock outstanding on such record date multiplied by the Current Market Price per Share as of three days prior to such record date. |
(d) | If and whenever at any time prior to the Time of Expiry there shall be a reorganization, reclassification or other change of Common Stock at any time outstanding or change of the Common Stock into other shares or into other securities (other than a Common Stock Reorganization), or a consolidation, amalgamation, arrangement or merger of the Company with or into any other corporation or other entity, or a sale, lease, exchange or transfer of all or substantially all of the undertaking or assets of the Company to another person in which the holders of Common Stock are entitled to receive shares, other securities or property, including cash (any of such events being herein called a “ Capital Reorganization ”), if the Holder exercises its right to subscribe for and purchase Common Stock pursuant to the exercise of the Warrants after the effective date of such Capital Reorganization then the Holder shall be entitled to receive, and shall accept for the same aggregate consideration in lieu of the number of shares of Common Stock to which the Holder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property, including cash, which it would have received as a result of such Capital Reorganization had the Holder exercised its right to acquire Common Stock immediately prior to the effective date or record date, as the case may be, of the Capital Reorganization and had the Holder been the holder of such Common Stock on such effective date or record date, as the case may be. |
(e) | If determined appropriate by the directors, acting reasonably, and subject to any required prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, appropriate adjustments shall be made in the application of the provisions set forth in this subsection 2.2, with respect to any shares, other securities or other property, including cash, deliverable upon the exercise of any Warrant. Any such adjustments shall be made by and set forth in an agreement supplemental hereto approved by action by the directors, acting reasonably, and shall for all purposes be conclusively deemed to be appropriate adjustments. |
(f) | If and whenever at any time prior to the Time of Expiry there shall occur a Common Stock Reorganization which results in an adjustment to the Exercise Price pursuant to the provisions of this subsection 2.2, the number of shares of Common Stock issuable (at the adjusted Exercise Price) upon the exercise of Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of shares of Common Stock theretofore issuable on the exercise thereof by a fraction, the numerator of which shall be the applicable Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the applicable Exercise Price resulting from such adjustment. |
(g) | In case the Company after the date of issue of the Warrants shall take any action affecting the Common Stock, other than action described above in this subsection 2.2, which in the opinion of the directors, acting reasonably, would materially affect the rights of the Holder and/or the acquisition rights of the Holder, then that number of shares of Common Stock which are to be received upon the exercise of the Warrants shall be adjusted in such manner, if any, and at such time, by action of the directors, acting reasonably, as they may determine to be equitable to the Holder in the circumstances, but subject in all cases to any necessary regulatory approval, including the prior consent of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded. |
(a) | no adjustment to the Exercise Price shall be required unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment in the number of shares of Common Stock issuable upon exercise of the Warrants will be required to be made unless the cumulative effect of such adjustment or adjustments would change the number of shares of Common Stock issuable upon the exercise of a Warrant by at least one share of Common Stock and, for greater clarity, any adjustment which, except for the qualification of this section, would otherwise have been required to be made shall be carried forward and taken into account in any subsequent adjustment; provided, however, that in no event shall the Company be obligated to issue fractional shares of Common Stock or fractional interests in Common Stock upon exercise of a Warrant; |
(b) | if a dispute shall at any time arise with respect to adjustments to the Exercise Price or the number of shares of Common Stock issuable pursuant to the exercise rights represented by a Warrant, such disputes shall be conclusively determined by the Company’s auditors or, if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors and any such determination shall, absent manifest or clerical error, be conclusive evidence of the correctness of any adjustments made; and |
(c) | if the Company shall set a record date to determine the holders of its Common Stock for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights, options or warrants and shall thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or purchase rights legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of shares of Common Stock issuable upon exercise of the Warrants shall be required by reason of the setting of such record date. |
3. | Covenants by the Company . |
(a) | it will reserve and there will remain unissued out of its authorized capital, solely for the purpose of issuing upon the exercise of the Warrants, a sufficient number of shares of Common Stock to satisfy the rights of acquisition provided for in this Warrant Certificate; |
(b) | all shares of Common Stock issued upon exercise of the right to purchase provided for herein shall, upon payment of the Exercise Price therefor, be duly authorized and issued as fully paid and non-assessable shares of Common Stock; |
(c) | it will make all requisite filings under applicable securities legislation in connection with the issuance of Common Stock upon exercise of the Warrants; |
(d) | it will at all times, so long as any of the Warrants evidenced by this Warrant Certificate remain outstanding use its reasonable commercial efforts to do and cause to be done all things necessary to maintain its status as a reporting issuer not in default under the laws of the Provinces of British Columbia, Alberta and Ontario; and |
(e) | it will at its expense and as expeditiously as possible, use its reasonable commercial efforts to cause all shares of Common Stock issuable upon the exercise of the Warrants to be duly listed on the TSX and/or any other recognized stock exchange upon which the Common Stock may be then listed prior to the issuance of such shares. |
4. | Representations and Warranties of the Company . |
(a) | it is duly authorized and has all necessary corporate power and authority to create and issue the Warrants evidenced hereby and the Common Stock issuable upon the exercise of the Warrants; |
(b) | this Warrant Certificate has been duly executed and the Warrants evidenced hereby represent valid, legal and binding obligations of the Company enforceable in accordance with their terms, and the Company has the power and authority to issue this certificate and to perform each of its obligations as herein contained; and |
(c) | the execution and delivery of this Warrant Certificate by the Company are not, and the issuance of the Common Stock upon exercise of the Warrants in accordance with the terms hereof, will not be, inconsistent with the Company’s constating documents, and do not and will not contravene any provision of, or constitute a default under, any applicable law or any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound. |
5. | Transfer of Warrants . |
6. | Replacement . |
7. | Expiry . |
8. | Time . |
9. | Governing Law . |
10. | Legends on Common Stock . |
11. | Amendments . |
12. | Miscellaneous Interpretation Matters . |
(a) | The division of this Warrant Certificate into sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. |
(b) | Unless otherwise expressly provided or unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders. |
(c) | The use of the words, “includes” or “including” shall be deemed to mean “includes, without limitation”, or “including, without limitation”, as applicable, in each case whether or not they are in fact followed by such words or words of like import. |
(d) | For the purposes hereof, “business day” means any day except Saturday, Sunday or a statutory holiday in Vancouver, British Columbia and, if any period expires or any day on which any action is to be taken under this Warrant Certificate falls on a day which is not a business day, it shall be deemed to refer to the next business day. |
13. | Severability . |
14. | Enurement . |
15. | Language . |
16. | General . |
SILVER BULL RESOURCES, INC.
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Name:
Sean Fallis
Title:
Chief Financial Officer
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(i) | Number of Warrants to be exercised: |
(ii) | Number of shares of Common Stock: |
(iii) | Exercise Price: |
(iv) | Aggregate Purchase Price [(ii) multiplied by (iii)]: | $ |
(a) | the common shares of the Company (the “ Common Shares ”) are listed on the Toronto Stock Exchange (the “ Exchange ”); |
(b) | each Unit will consist of one Common Share (a “ Unit Share ”) and one non-transferable share purchase warrant (a “ Warrant ”) entitling the purchase of one Common Share (a “ Warrant Share ”) for three years from the closing of the Placement (the “ Closing ”) at a price of C$ 0.16; |
(c) | if, commencing on the fourth month after the Closing, the closing price of the Common Shares on the Exchange is higher than C$ 0.30 for any 20 consecutive trading day period then on the 20 th consecutive trading day of any such period (the “ Acceleration Trigger Date ”) the expiry date of the Warrants may be accelerated to the 20 th trading day after the Acceleration Trigger Date by the issuance, within three trading days of the Acceleration Trigger Date, of a news release announcing such acceleration; |
(d) | if, at the time of exercise of the Warrant, the Company is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, of the United States of America (the “ Exchange Act ”), then the Warrant may be exercised by means of a Cashless Exercise Right in the same manner as the Compensation Warrants (as described and defined below); and |
(e) | the Placement is subject to the approval of the Exchange. |
(a) | locating and introducing to the Company potential qualified investors (“ Investors ”) in the United States of America, its states, territories and possessions, and the District of Columbia (collectively, the “ United States ”) and outside of the United States and Canada with whom the Placement Agent has pre-existing business relationships and who the Placement Agent reasonably believes are qualified to participate in the Placement who might be willing to purchase Units on an exempt private placement basis; |
(b) | facilitating communication between the Company and the Investors and arranging for the Investors to receive, or directing them where to obtain, corporate and business related information of the Company from the Company’s website, SEDAR and EDGAR; |
(c) | introducing the Investors to the Company’s management and, if requested, assisting the Investors in completing a subscription agreement in the form provided by the Company to SGRIL for the Placement (“ Subscription Agreement ”); and |
(d) | gathering and forwarding the completed Subscription Agreements and the funds therefor to the Company to hold such funds, in trust, pending the Closing. |
(a) | the Placement Agent shall not have any liability to the Company if it is unable to locate any, or a sufficient number of, purchasers for the Placement; |
(b) | there is no agreement, commitment, arrangement or understanding pursuant to which the Placement Agent will act as advisor in respect of the Placement or in respect of a subsequent offering of securities of the Company; and |
(c) | the Placement Agent shall not bear any responsibility or assume any liability for any statements made by the Company to the Investors in connection with the Placement, including the accuracy of any representations made by the Company to any Investors in the Subscription Agreements provided by the Company. |
(a) | paid a fee equal to 6.0% of the proceeds from such Units; and |
(b) | issued that number of non-transferable warrants (“ Compensation Warrants ”) as is equal to 6.0% of the number of such Units, each Compensation Warrant entitling the Placement Agent to purchase, for two years from the Closing and subject to the same acceleration provisions as the Warrants, one Warrant Share at a price equal to the greater of C$ 0.15 and the five day volume weighted average trading price preceding notice of the Placement to the Exchange. |
A = | the average closing price for the Common Shares as quoted on the Exchange for the five consecutive trading days immediately preceding the date on which the Placement Agent elects to exercise the Compensation Warrant by means of the Cashless Exercise Right. |
B = | the then applicable exercise price of the Compensation Warrant. |
X = | the number of Warrant Shares that would otherwise have been issuable had the Placement Agent elected to exercise the Compensation Warrant by means of a cash exercise. |
(a) | (i) resident in the United States, or a “U.S. person” (as defined in Rule 902(k) of Regulation S (“ Regulation S ”) under the 1933 Act; “ U.S. Person ”), (ii) purchasing for the account or benefit of a U.S. Person or person in the United States, or (iii) in the United States when they receive the initial offer of, or subscribe for, the Units, and SGRIL has reason to believe the Investors are in the United States, and each of such Investors in (i), (ii) and (iii) (collectively, “ U.S. Purchasers ”) is an “accredited investor” (as defined in Rule 501(a) of Regulation D (“ Regulation D ”) under the 1933 Act; an “ Accredited Investor ”) but the term “U.S. Purchasers” does not include persons excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(vi) of Regulation S or persons holding accounts excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(i) of Regulation S, solely in their capacities as holders of such accounts; or |
(b) | outside of the United States and Canada, are not U.S. Purchasers and are able to purchase such securities in an “offshore transaction” (as such term is defined in Rule 902(h) of Regulation S; “ Offshore Transaction ”) in accordance with Rule 903 of Regulation S and applicable local securities laws (“ Offshore Purchasers ”). |
(a) | it is a validly created limited partnership with its head office at the address set out on the first page hereof; |
(b) | the execution and delivery of and performance by the Placement Agent of this Agreement have been authorized by all necessary actions on the part of the Placement Agent; |
(c) | this Agreement has been duly executed and delivered by the Placement Agent, and constitutes a legal, valid and binding agreement of the Placement Agent enforceable against it in accordance with its terms; |
(d) | the execution and delivery of and performance by the Placement Agent of this Agreement do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event of condition) result in a breach or violation of or a conflict with, or allow any other person to exercise any rights under any of the terms or provisions of the Placement Agent’s constating documents or by-laws, if applicable, or any other contract, agreement, instrument, undertaking or covenant to which the Placement Agent is a party or by which it is bound; |
(e) | it is, and during the course of the Placement it will remain, duly registered, and in good standing, as a broker-dealer with the United States Securities and Exchange Commission (the “ SEC ”) under the Exchange Act and applicable securities legislation in all states and other jurisdictions in the United States in which it is carrying out activities in connection with the Services and is, and during the course of the Placement will remain, a member in good standing with the Financial Industry Regulatory Authority, Inc. (“ FINRA ”) ; |
(f) | none of the Placement Agent, any general partner or managing member, any director or executive officer of any of the foregoing, any other officer of any of the foregoing participating in the Placement, or any officer or other employee of the foregoing that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in the Placement are subject to any Disqualifying Event. For the purposes hereof, “ Disqualifying Event ” means any conviction, order, judgment, decree, suspension, expulsion, event or other matter set out in Rule 506(d)(1)(i) through (viii) of Regulation D that is currently in effect or which occurred within the periods set out in Rule 506(d)(1)(i) through (viii) and, without limiting the foregoing, includes criminal convictions, court injunctions or restraining orders, final orders of any state or federal regulator, SEC disciplinary orders, SEC cease-and-desist orders, SEC stop orders or orders suspending the Regulation A exemption, suspension or expulsion from membership in, or association with a member of, a self-regulatory organization (such as FINRA) or United States Postal Service false representation orders; |
(g)
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it has had and shall maintain all business and professional licenses, registrations and permits necessary or appropriate, and agrees to obtain and maintain any such license, registration or permit that may hereafter become necessary or appropriate, under all applicable laws and regulations, and shall otherwise comply with all applicable laws and regulations to complete the Services;
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(h)
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it is neither an insider nor an affiliate of an insider of the Company through ownership of 10% or more of the outstanding Common Shares, on a partially diluted basis, and is arm’s length to the Company;
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(i)
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it shall make introductions only to Investors who SGRIL reasonably believes are qualified to participate in the Placement and are
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(i)
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U.S. Purchasers that SGRIL has a reasonable basis to believe, and does reasonably believe, are Accredited Investors and with whom SGRIL has pre-existing business relationships, or
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(ii)
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Offshore Purchasers, who will purchase the Units in an Offshore Transaction in accordance with Rule 903 of Regulation S and applicable local securities laws;
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(j)
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it shall carry out the Services in such a manner that
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(i)
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the exemptions from registration for the offer and sale of the securities in the Placement to U.S. Purchasers under Rule 506(b) of Regulation D and any applicable state securities laws (including the exemption from registration under applicable state securities laws provided by section 18(b)(4)(E) of the 1933 Act) or any order, rule or regulation promulgated thereunder are available,
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(ii)
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the exclusions from registration for the offer and sale of the securities in the Placement outside the United States to purchasers other than U.S. Purchasers are available under Regulation S, and
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(iii)
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complies with all applicable United States federal and state broker-dealer requirements and the laws of any other jurisdiction in which the Services may be carried out;
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(k)
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it has not and shall not offer or sell the Units in any manner constituting a “public offering”, as that term is used in section 4(a)(2) of the 1933 Act (a “US Public Offering”);
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(l)
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it has not and shall not
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(i)
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offer to sell, or solicit an offer to buy, Units to, or for the account or benefit of, any U.S. Person or person in the United States, except as provided in this Agreement, or otherwise engage in or use any “general solicitation” or “general advertising” as such terms are used in Rule 502(c) of Regulation D (“General Solicitation or General Advertising”) such as any advertisement, article, notice, or other public communication mentioning the Placement, the Company or the Company’s securities nor in any manner involving a US Public Offering,
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(ii)
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publish in any newspaper, magazine or similar medium or on the Internet or broadcast over television, radio or the Internet any information regarding the Company, its securities or the Placement,
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(iii)
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host or participate in any seminar or meeting regarding the Placement whose attendees have been invited by General Solicitation or General Advertising, or
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(iv)
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take any other action that would be reasonably expected to result in the Placement not being exempt from registration under the 1933 Act or applicable state securities laws;
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(m)
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it has not made or engaged nor shall it make or engage in any Directed Selling Efforts in the United States regarding the Company, its securities or the Placement where “Directed Selling Efforts” means directed selling efforts as that term is defined in Rule 902(c) of Regulation S and which, in general terms involves, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose, or that could reasonably be expected to have the effect, of conditioning the market in the United States for any of the Units, Unit Shares, Warrants, Compensation Warrants or Warrant Shares, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the Internet, or broadcast over radio, television or the Internet that refers to the Placement;
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(n)
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it has not made and will not make any
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(i)
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representations concerning the Company or the Placement not authorized by the Company in writing, or
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(ii)
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untrue statement of a material fact concerning the Company nor omit to state a material fact required to be stated or necessary to make any statement not misleading concerning the Company;
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(o)
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it is both an Accredited Investor and an “accredited investor” as defined in National Instrument 45-106 Prospectus Exemptions of the Canadian Securities Administrators and it will be acquiring the Units the Compensation Warrants as principal for its own account, for investment purposes only, and not for the benefit of any other person nor with a view to distribution or transfer in violation of the 1933 Act or applicable state securities laws; and
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(p)
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it will execute and return to the Company all documents which may be required by applicable securities laws and the policies of the Exchange in connection with the Placement or this Agreement.
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(a) | it is a “domestic issuer”, as defined in Rule 902 of the 1933 Act ; |
(b) | except with respect to offers and sales to U.S. Purchasers made in reliance upon the exemption from registration under Rule 506(b) of Regulation D, neither it nor, to the Company’s knowledge, any person acting on its behalf (other than the Placement Agent or any finder, for which no representation or warranty is made), has made or will make any |
(i) | offer to sell, or any solicitation of an offer to buy, any Units to a U.S. Purchaser, or |
(ii) | sale of Units unless, at the time the buy order was or will have been originated |
(1) | the purchaser is not a U.S. Purchaser, or; |
(2) | the Company and any person acting on its behalf reasonably believes that the purchaser is not a U.S. Purchaser; |
(c) | neither it nor, to the Company’s knowledge, any person acting on its behalf (other than the Placement Agent or any finder, for which no representation or warranty is made) has, during the period beginning six months before the commencement of the Placement, or will, for the six months after the Closing, offer, sell or solicit any offer to buy any of its securities in a manner that would be integrated with the Placement and thereby cause the exemptions from registration set forth in Rule 506(b) of Regulation D or Rule 903 of Regulation S of the 1933 Act to become unavailable for the Placement, including engaging in any of the following activities in connection with any offer or sale of the Company’s securities that would be integrated with the Placement |
(i) | any Directed Selling Efforts, |
(ii) | any form of General Solicitation or General Advertising, or holding or participating in any seminar or meeting whose attendees have been invited by General Solicitation or General Advertising including, without limitation, advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the Internet, or broadcast over radio, television or the Internet or any seminar or meeting whose attendees have been invited by General Solicitation or General Advertising, or |
(iii) | acting in any manner that would constitute a US Public Offering; |
(d) | neither the Company nor any of its predecessors or affiliates, have been subject to any order, judgment or decree of any court of competent jurisdiction temporarily, preliminarily or permanently enjoining such person for failing to comply with the provisions of Rule 503 of Regulation D; |
(e) | to the best of the Company’s knowledge after reasonable investigation, none of the Company (including its predecessors or affiliated issuers), any director or executive officer, any non-executive officer participating in the Placement, any shareholder holding or controlling 20% or more of the Common Shares, any current promoter of the Company or any person (other than the Placement Agent, any finder and any person set out in paragraph (f) of the Placement Agent’s representations, warranties and covenants above, for which no representation or warranty is made) that has been or will be paid (directly or indirectly) for the solicitation of purchasers in the Placement (a “ Compensated Solicitor ”) and any general partner or managing member of any Compensated Solicitor or any executive officer, non-executive officer participating in the Placement, or director of any Compensated Solicitor or general partner or managing member of such Compensated Solicitor is subject to a Disqualifying Event; |
(f) | it is not now, and as a result of the sale of Units contemplated hereby will not be, required to be registered as an “investment company” as defined in the Investment Company Act of 1940, as amended, of the United States; and |
(g) | all representations and warranties made by it in the Subscription Agreement are incorporated by reference herein and made to and for the benefit of the Placement Agent. |
(a) | the Company shall |
(i) | prepare forms of the Subscription Agreement , the Warrant and Compensation Warrant certificates and any indentures and other agreements required in connection with the Placement, in consultation with the Placement Agent and its legal counsel, and |
(ii) | deliver to the Placement Agent a certificate of an executive officer of the Company regarding various factual matters, in a form reasonably acceptable to the Placement Agent and its legal counsel; |
(b) | the Placement Agent will provide a certificate, substantially in the form attached hereto, relating to the conduct of the Placement by it in the United States and to, and for the benefit of, the Company; |
(c) | the U.S. Purchasers and Offshore Purchasers will have each provided a fully completed and duly executed Subscription Agreement and any other certificates contemplated therein; and |
(d) | the Exchange shall have approved the Placement in respect of the subscriptions from Investors introduced by the Placement Agent. |
(a) | “restricted securities” under the 1933 Act and the certificates representing such securities shall bear a restrictive legend to the effect that they have not been registered under the 1933 Act or state securities laws and can only be offered, resold or otherwise transferred (and with respect to any Warrants, exercised) under certain conditions (“ U.S. Legend ”); and |
(b) | subject to a four month restricted re-sale period in Canada and the certificates representing such securities shall bear a legend to that effect as required by National Instrument 45-102 Resale of Securities of the Canadian Securities Administrators (the “ NI 45-102 Legend ”). |
(a) | any inquiry, investigation or other proceeding (whether formal or informal) is commenced, announced or threatened, or any order or ruling is issued by any exchange or market, or any other regulatory or governmental authority (other than an inquiry, investigation or other proceeding based solely on the activities of the Placement Agent in connection with the Placement) which, in the opinion of the Placement Agent, would reasonably be expected to materially and adversely affect the Company or its business, on a consolidated basis, or its securities; |
(b) | any law or regulation or moratorium, inquiry, investigation, proceeding, order, ruling, pursuant to any statute is promulgated or changed which, in the reasonable opinion of the Placement Agent |
(i) | operates to prevent or materially restrict the distribution of the Units or the trading of the Common Shares , |
(ii) | would reasonably be expected to materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares or the Units, or |
(iii) | would reasonably be expected to materially impair the Company’s ability to perform the obligations contemplated in this Agreement; |
(c) | in the reasonable opinion of the Placement Agent, there occurs or is discovered a material change or a change in any material fact or a new material fact arises that would reasonably be expected to |
(i) | materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares or the Units, or |
(ii) | materially impair the Company’s ability to perform the obligations contemplated in this Agreement; |
(d) | there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence, including without limiting the generality of the foregoing, any military conflict, civil insurrection, or any terrorist action (whether or not in connection with such conflict or insurrection), or any law or regulation which, in the reasonable opinion of the Placement Agent, materially and adversely affects or involves, or will materially adversely affect or involve, the Canadian or United States financial markets, or prevent or materially restrict the trading of the Common Shares or the distribution of the Units or may materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares, or which could materially impair the Company’s ability to perform the obligations contemplated in this Agreement; |
(e) | the state of the financial markets is such that in the reasonable opinion of the Placement Agent, it would be unprofitable to offer or continue to offer the Units for sale; |
(f) | the Company is in breach of any material term, condition or covenant of this Agreement, or any representation or warranty given by the Company in this Agreement becomes, is discovered to be or is materially false, and such material breach or such materially false representation |
(i) | is in the reasonable opinion of the Placement Agent not capable of being cured prior to the Closing, |
(ii) | would result in the failure of any condition precedent set out in this Agreement, or |
(iii) | has not been rectified to the reasonable satisfaction of the Placement Agent within 48 hours of when the Placement Agent provides notice to the Company of the same; or |
(g) | any order to cease trading in the Company’s securities is made or threatened by a Canadian or United States securities regulator. |
(a) | any inquiry, investigation or other proceeding (whether formal or informal) is commenced or announced, or any order or ruling is issued by any exchange or market, or any other regulatory or governmental authority based solely on the activities of the Placement Agent in connection with the Placement; |
(b) | the Placement Agent is in material breach of any term, condition or covenant of this Agreement, or any representation or warranty given by the Placement Agent in this Agreement becomes, is discovered to be or is materially false, and such material breach or such materially false representation |
(i) | is in the reasonable opinion of the Company not capable of being cured prior to the Closing, |
(ii) | would result in the failure of any condition precedent set out in this Agreement, or |
(iii) | has not been rectified to the reasonable satisfaction of the Company within two business days of when the Company provides notice to the Placement Agent of the same. |
Issuer:
|
Silver Bull Resources, Inc. (the “
Corporation
”)
Suite 1908, 925 West Georgia Street
Vancouver, BC V6C 3L2
|
Offering:
|
Brokered private placement of up to 3,340,000 Units of the Corporation (C$ 501
,000
).
|
Unit Price:
|
C$ 0.15 per Unit.
|
Units:
|
Each Unit will consist of one common share in the capital of the Corporation (a “
Common Share
”) and one share purchase warrant (a “
Warrant
”).
|
Warrants:
|
Each Warrant will be non-transferable and entitle the purchase of one Common Share (a “
Warrant Share
”) for three years from the Closing Date at a price of C$ 0.16, subject to the Acceleration Provision (hereinafter defined).
|
Acceleration Provision:
|
If, commencing on the fourth month after the Closing Date, the closing price of the Common Shares on the
TSX (as defined below)
is higher than C$ 0.30 for 20 consecutive trading days then on the 20
th
consecutive trading day (the “
Acceleration Trigger Date
”) the expiry date of the Warrants may be accelerated to the 20
th
trading day after the Acceleration Trigger Date by the issuance, within three trading days of the Acceleration Trigger Date, of a news release announcing such acceleration.
|
Offering Basis:
|
Brokered private placement of Units to accredited investors (as defined in Rule 501(a) of Regulation D under the United States Securities Act of 1933, as amended (the “
1933 Act
”)), in the United States pursuant to an exemption from the registration requirements of the 1933 Act and, with the consent of the Corporation, to eligible investors in other eligible foreign jurisdictions (other than Canada and the United States) pursuant to applicable private placement exemptions under applicable securities laws in such jurisdictions.
|
Placement Agent:
|
Sprott Global Resource Investments, Ltd.
|
Services:
|
Placement Agent shall use commercially reasonable efforts to locate and introduce to the Corporation potential subscribers to the Offering.
The Corporation shall allow the Placement Agent and its legal counsel to participate in the preparation of the Subscription Agreement and the Warrant and Placement Agent Warrant certificates.
|
Closing Date:
|
July 13, 2016 or such other date or dates as the Corporation and the Placement Agent may agree.
|
Use of Proceeds:
|
The net proceeds from the Offering will be used for exploration activities on the Corporation’s assets and for general corporate purposes.
|
Resale Restrictions:
|
Pursuant to the National Instrument 45-102
Resale of Securities
, all securities issued pursuant to the Offering shall be subject to a restricted resale period in Canada of four months commencing on the Closing Date.
The securities issued pursuant to the Offering are not, and will not be, registered under the 1933 Act. Accordingly, securities acquired by United States buyers will be subject to additional restrictions on resale under the 1933 Act.
|
Listing:
|
The Common Shares are currently listed on the Toronto Stock Exchange (“
TSX
”) and trade on the OTCQB Venture Marketplace (“
OTCQB
”) under the symbol "
SVB
” and “
SVBL
”, respectively. The Corporation will make an application to the TSX to list the Common Shares comprising the Units and the Warrant Shares, which listing will be conditionally approved prior to the Closing Date.
|
Placement Agent’s Fee:
|
6.0% cash commission on subscriptions from new investors introduced to the Corporation by the Placement Agent plus that number of Placement Agent’s Warrants (as defined and set forth below) subject to the rules of the TSX.
The Placement Agent will not be entitled to any Placement Agent’s Fee or Placement Agent’s Warrants in connection with a subscription from any new investor not introduced to the Corporation by the Placement Agent. As of the date hereof, the Corporation anticipates that one investor not introduced to the Corporation by the Placement Agent will participate in the Offering, which investor is an entity organized in the British Virgin Islands.
|
Placement Agent’s Warrants:
|
On the Closing Date, the Corporation shall issue to the Placement Agent the number of non-transferable common share purchase warrants that equals 6.0% of the Units placed to new investors introduced to the Corporation by the Placement Agent.
Each Placement Agent’s Warrant permits the purchase of one Warrant Share for two years from the Closing Date at the greater of the Unit Price and the five day VWAP preceding notice of the Offering to the TSX and is subject to the Acceleration Provision.
|
Placement Agent Agreement:
|
The Corporation will enter into a definitive placement agent agreement with the Placement Agent promptly after the execution of this Term Sheet and prior to the Closing Date. The Placement Agent Agreement shall include, without limitation, industry standard representations, warranties, covenants (including customary broker-dealer representations, warranties and covenants), conditions, and indemnities, and industry standard termination provisions including, without limitation, a disaster out, litigation out, regulatory out, market out, due diligence out and a material adverse change out customary for agreements of this nature, in each case exercisable prior to the Closing Date,
which clauses shall commence upon acceptance of this Term Sheet.
The Placement Agent will represent that none of it, any of its general partners or managing members, any director or executive officer of any of the foregoing, any other officer of any of the foregoing participating in the Offering, or any other officer or employee of any of the foregoing that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in the Offering is subject to any of the "
Bad Actor
" disqualifications provisions described in Rule 506(d) under
the 1933 Act.
|
Subscription Agreements:
|
The terms and conditions governing the Offering and other matters related to the Offering will be set out in the Placement Agent Agreement and in the respective subscription agreements with purchasers of Units (“
Subscription Agreements”
). In the event of any discrepancy between the terms described herein and a Placement Agent Agreement and those contained in the Subscription Agreements, the Subscription Agreements will govern.
|
U.S. Legend Removal:
|
The U.S. restrictive legends will not be removed from any Common Shares or Warrant Shares held by a purchaser of the Units or the Placement Agent, except in connection with the sale of the Common Shares or Warrant Shares by the purchaser or the Placement Agent (as the case may be) pursuant to (A) Rule 144 under the 1933 Act; or (B) an effective registration statement under the 1933 Act with respect to the sale of the Common Shares or the Warrant Shares by the purchaser or the Placement Agent (as the case may be). At the Corporation’s cost and subject to the foregoing, the Corporation will use commercially reasonable efforts to cause its transfer agent to remove the U.S. restrictive legend and deliver unlegended share certificates to the purchaser or the Placement Agent (as the case may be) within three business days of presentation of a legended share certificate to it.
If the transfer agent fails to deliver the unlegended share certificate within three business days, the Corporation will indemnify any U.S. investor (other than U.S. investors that are (i) brokers employed by the Placement Agent or (ii) one of the Exploration Capital Limited Partnerships managed by the Placement Agent or its affiliates) for any damages and costs incurred (other than loss of profits) as a result thereof. The aggregate amount of such indemnity in respect of any one legend removal shall not exceed US$ 5,000.
Until the first anniversary of the expiration of the Warrants, the investors will be entitled to customary “piggyback” registration rights under the 1933 Act on any registration statement of the Corporation. For the avoidance of doubt, the investors will not receive demand registration rights that would otherwise entitle investors to require the Corporation to file a registration statement registering their securities.
|
Cashless Exercise of Warrants:
|
If at the time of exercise of Warrants or Placement Agent’s Warrants (as the case may be) the Corporation is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, then the holder of such Warrants or Placement Agent’s Warrants (as the case may be) may exercise such warrants, in whole or in part, at such time by means of a “cashless exercise.”
|
Due Diligence:
|
Prior to the Closing Date, the Corporation shall allow and assist the Placement Agent and its legal counsel to conduct all reasonable due diligence investigations and provide the Placement Agent with written or oral due diligence responses (at the Placement Agent’s discretion) to formal due diligence questions, which the Placement Agent may reasonably require to fulfil its obligations as registrants in a private placement.
|
Jurisdiction:
|
This Term Sheet and all documentation associated with the Offering shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and the parties hereto irrevocably attorn to the non-exclusive jurisdiction of the courts of the Province of British Columbia.
|
Press Releases:
|
Subject to meeting its obligations under applicable securities laws and requirements of the TSX and OTCQB, the Corporation will use reasonable commercial efforts to allow the Placement Agent to review and comment on all press releases associated with the Offering, and such comments shall be considered by the Corporation, acting reasonably. Sprott Global Resource Investments, Ltd. shall
not
be referenced in the press release as a placement agent in the Offering.
|
Regulatory Approvals:
|
The Offering and the terms thereof, including all Placement Agent’s Fees, will be subject to all necessary regulatory and corporate approvals, including approval of the TSX.
|
SPROTT GLOBAL RESOURCE INVESTMENTS, LTD.
|
|
Per:
|
[
previously signed
]
|
Authorized Signatory
|
SILVER BULL RESOURCES, INC.
|
|
Per:
|
[
previously signed
]
|
Authorized Signatory
|
(a) | any member of the Placement Agent’s Group has, in the course of such performance, been negligent or dishonest, engaged in willful misconduct, acted in bad faith or committed any fraudulent act; and |
(b) | the expenses, losses, claims, damages or liabilities, as to which indemnification is claimed, were directly caused by such negligence, dishonesty, willful misconduct, bad faith or fraud. |
(a) | the Company fails to assume the defense of such suit on behalf of the Indemnified Party within a reasonable period of receiving notice of such suit and, in the absence of evidence to the contrary, the expiration of such period shall be deemed to occur on the second clear business day immediately preceding the date by which the Indemnified Party is required by law to take action (such as the filing of an appearance, notice or other document) in connection with defending such suit; |
(b) | the employment of such counsel has been authorized in writing by the Company; or |
(c) | the named parties to any such suit include both the Indemnified Party and the Company and the Indemnified Party has been advised by counsel that there may be one or more defenses available to the Indemnified Party different from or in addition to those available to the Company, |
Certificate No:
2016-[
●
]
|
|
Number of Warrants: [●]
|
Date: July [●], 2016
|
1. | Exercise of Warrants . |
2. | Anti-Dilution Protection . |
(i) | “ Current Market Price per Share ”, at any date, means the price per share of Common Stock (denominated in Canadian dollars based, if necessary, on the noon rate of exchange as reported by the Bank of Canada) equal to the VWAP for the five trading-days preceding such date (i) on the TSX, or (ii) if the Common Stock is not traded on the TSX, on any other recognized stock exchange, or (iii) if the Common Stock is not traded on a recognized stock exchange, on the over-the-counter market. If the Common Stock is not then traded in the over-the-counter market or on a recognized stock exchange, the Current Market Price of the Common Stock shall be the fair market value of the Common Stock as determined in good faith by the board of directors of the Company after consultation with an internationally recognized investment dealer or investment banker; |
(ii) | “ director ” means a director of the Company from time to time and reference herein to an “ action by the directors ” means an action by the directors of the Company as a board or, whenever duly empowered, an action by a committee of directors; |
(iii) | “ Dividends Paid in the Ordinary Course ” means dividends paid on the Common Stock in any fiscal year of the Company in cash, provided that the amount of such dividends does not in such fiscal year exceed 50% of the consolidated net income of the Company before extraordinary items for the period of 12 consecutive months ended immediately prior to the first day of such fiscal year less the amount of all cash dividends payable on all shares ranking prior to or on a parity with the Common Stock in respect of the payment of dividends (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of 12 consecutive months or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company); |
(iv) | “ recognized stock exchange ” means a stock exchange or quotation system recognized by the Canadian Securities Administrators; |
(v) | “ TSX ” means the Toronto Stock Exchange; and |
(vi) | “ VWAP ”, for any period, means the volume weighted average trading price of the Common Stock, calculated by dividing the total value by the total volume of Common Stock traded for the trading days included in the relevant period. |
(a) | If and whenever at any time prior to the Time of Expiry the Company shall: |
(i) | declare a dividend or make a distribution on the Common Stock payable in Common Stock (or securities exchangeable for or convertible into Common Stock) |
(ii) | subdivide, redivide or change the outstanding Common Stock into a greater number of shares of Common Stock; or |
(iii) | reduce, combine or consolidate the outstanding Common Stock into a lesser number of shares of Common Stock, |
(b) | If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the issuing of rights, options or warrants to all or substantially all of the holders of the Common Stock entitling them for a period expiring not more than forty-five (45) days after such record date (the “ Rights Period ”) to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or having a conversion or exchange price per share) which is less than 95% of the Current Market Price per Share as of three days prior to the record date for such issue (any of such events being called a “ Rights Offering ”), then effective immediately after the end of the Rights Period the Exercise Price shall be adjusted to a price determined by multiplying the applicable Exercise Price in effect at the end of the Rights Period by a fraction the numerator of which shall be the sum of: |
(i) | the number of shares of Common Stock outstanding as of the record date for the Rights Offering; and |
(ii) | a number determined by dividing (A) either (i) the product of the number of shares of Common Stock issued or subscribed during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering and the price at which such Common Stock is offered, or (ii) as the case may be, the product of the number of shares of Common Stock for or into which the convertible or exchangeable securities offered during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering are exchangeable or convertible and the exchange or conversion price of the convertible or exchangeable securities so issued, by (B) the Current Market Price per Share as of three days prior to the record date for the Rights Offering, and |
(c) | If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the payment, issue or distribution to all or substantially all of the holders of the Common Stock of (i) a dividend, (ii) any property, cash or assets (including evidences of indebtedness), or (iii) rights, options, warrants, or other securities (including, without limitation, securities convertible into or exchangeable for Common Stock), and such payment, issue or distribution does not constitute a Dividend Paid in the Ordinary Course, a Common Stock Reorganization or a Rights Offering (any of such non-excluded events being herein called a “ Special Distribution ”), the Exercise Price shall be adjusted effective immediately after such record date to a price determined by multiplying the applicable Exercise Price in effect on such record date by a fraction: |
(i) | the numerator of which shall be: |
(1) | the product of the number of shares of Common Stock outstanding on such record date and the Current Market Price per Share as of three days prior to such record date; less |
(2) | the aggregate fair market value, as determined by action by the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, to the holders of the Common Stock of such dividend, property, cash, assets, rights, options, warrants or other securities so paid, issued or distributed less the aggregate fair market value, as determined by action of the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, of the consideration, if any, received therefor by the Company, and |
(ii) | the denominator of which shall be the number of shares of Common Stock outstanding on such record date multiplied by the Current Market Price per Share as of three days prior to such record date. |
(d) | If and whenever at any time prior to the Time of Expiry there shall be a reorganization, reclassification or other change of Common Stock at any time outstanding or change of the Common Stock into other shares or into other securities (other than a Common Stock Reorganization), or a consolidation, amalgamation, arrangement or merger of the Company with or into any other corporation or other entity, or a sale, lease, exchange or transfer of all or substantially all of the undertaking or assets of the Company to another person in which the holders of Common Stock are entitled to receive shares, other securities or property, including cash (any of such events being herein called a “ Capital Reorganization ”), if the Holder exercises its right to subscribe for and purchase Common Stock pursuant to the exercise of the Warrants after the effective date of such Capital Reorganization then the Holder shall be entitled to receive, and shall accept for the same aggregate consideration in lieu of the number of shares of Common Stock to which the Holder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property, including cash, which it would have received as a result of such Capital Reorganization had the Holder exercised its right to acquire Common Stock immediately prior to the effective date or record date, as the case may be, of the Capital Reorganization and had the Holder been the holder of such Common Stock on such effective date or record date, as the case may be. |
(e) | If determined appropriate by the directors, acting reasonably, and subject to any required prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, appropriate adjustments shall be made in the application of the provisions set forth in this subsection 2.2, with respect to any shares, other securities or other property, including cash, deliverable upon the exercise of any Warrant. Any such adjustments shall be made by and set forth in an agreement supplemental hereto approved by action by the directors, acting reasonably, and shall for all purposes be conclusively deemed to be appropriate adjustments. |
(f) | If and whenever at any time prior to the Time of Expiry there shall occur a Common Stock Reorganization which results in an adjustment to the Exercise Price pursuant to the provisions of this subsection 2.2, the number of shares of Common Stock issuable (at the adjusted Exercise Price) upon the exercise of Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of shares of Common Stock theretofore issuable on the exercise thereof by a fraction, the numerator of which shall be the applicable Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the applicable Exercise Price resulting from such adjustment. |
(g) | In case the Company after the date of issue of the Warrants shall take any action affecting the Common Stock, other than action described above in this subsection 2.2, which in the opinion of the directors, acting reasonably, would materially affect the rights of the Holder and/or the acquisition rights of the Holder, then that number of shares of Common Stock which are to be received upon the exercise of the Warrants shall be adjusted in such manner, if any, and at such time, by action of the directors, acting reasonably, as they may determine to be equitable to the Holder in the circumstances, but subject in all cases to any necessary regulatory approval, including the prior consent of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded. |
(a) | no adjustment to the Exercise Price shall be required unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment in the number of shares of Common Stock issuable upon exercise of the Warrants will be required to be made unless the cumulative effect of such adjustment or adjustments would change the number of shares of Common Stock issuable upon the exercise of a Warrant by at least one share of Common Stock and, for greater clarity, any adjustment which, except for the qualification of this section, would otherwise have been required to be made shall be carried forward and taken into account in any subsequent adjustment; provided, however, that in no event shall the Company be obligated to issue fractional shares of Common Stock or fractional interests in Common Stock upon exercise of a Warrant; |
(b) | if a dispute shall at any time arise with respect to adjustments to the Exercise Price or the number of shares of Common Stock issuable pursuant to the exercise rights represented by a Warrant, such disputes shall be conclusively determined by the Company’s auditors or, if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors and any such determination shall, absent manifest or clerical error, be conclusive evidence of the correctness of any adjustments made; and |
(c) | if the Company shall set a record date to determine the holders of its Common Stock for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights, options or warrants and shall thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or purchase rights legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of shares of Common Stock issuable upon exercise of the Warrants shall be required by reason of the setting of such record date. |
3. | Covenants by the Company . |
(a) | it will reserve and there will remain unissued out of its authorized capital, solely for the purpose of issuing upon the exercise of the Warrants, a sufficient number of shares of Common Stock to satisfy the rights of acquisition provided for in this Warrant Certificate; |
(b) | all shares of Common Stock issued upon exercise of the right to purchase provided for herein shall, upon payment of the Exercise Price therefor, be duly authorized and issued as fully paid and non-assessable shares of Common Stock; |
(c) | it will make all requisite filings under applicable securities legislation in connection with the issuance of Common Stock upon exercise of the Warrants; |
(d) | it will at all times, so long as any of the Warrants evidenced by this Warrant Certificate remain outstanding use its reasonable commercial efforts to do and cause to be done all things necessary to maintain its status as a reporting issuer not in default under the laws of the Provinces of British Columbia, Alberta and Ontario; and |
(e) | it will at its expense and as expeditiously as possible, use its reasonable commercial efforts to cause all shares of Common Stock issuable upon the exercise of the Warrants to be duly listed on the TSX and/or any other recognized stock exchange upon which the Common Stock may be then listed prior to the issuance of such shares. |
4. | Representations and Warranties of the Company . |
(a) | it is duly authorized and has all necessary corporate power and authority to create and issue the Warrants evidenced hereby and the Common Stock issuable upon the exercise of the Warrants; |
(b) | this Warrant Certificate has been duly executed and the Warrants evidenced hereby represent valid, legal and binding obligations of the Company enforceable in accordance with their terms, and the Company has the power and authority to issue this certificate and to perform each of its obligations as herein contained; and |
(c) | the execution and delivery of this Warrant Certificate by the Company are not, and the issuance of the Common Stock upon exercise of the Warrants in accordance with the terms hereof, will not be, inconsistent with the Company’s constating documents, and do not and will not contravene any provision of, or constitute a default under, any applicable law or any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound. |
5. | Transfer of Warrants . |
6. | Replacement . |
7. | Expiry . |
8. | Time . |
9. | Governing Law . |
10. | Legends on Common Stock . |
11. | Amendments . |
12. | Miscellaneous Interpretation Matters . |
(a) | The division of this Warrant Certificate into sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof. |
(b) | Unless otherwise expressly provided or unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders. |
(c) | The use of the words, “includes” or “including” shall be deemed to mean “includes, without limitation”, or “including, without limitation”, as applicable, in each case whether or not they are in fact followed by such words or words of like import. |
(d) | For the purposes hereof, “business day” means any day except Saturday, Sunday or a statutory holiday in Vancouver, British Columbia and, if any period expires or any day on which any action is to be taken under this Warrant Certificate falls on a day which is not a business day, it shall be deemed to refer to the next business day. |
13. | Severability . |
14. | Enurement . |
15. | Language . |
16. | General . |
SILVER BULL RESOURCES, INC.
|
|
Name:
Sean Fallis
Title:
Chief Financial Officer
|
(i) | Number of Warrants to be exercised: |
(ii) | Number of shares of Common Stock: |
(iii) | Exercise Price: |
(iv) | Aggregate Purchase Price [(ii) multiplied by (iii)]: | $ |