|
Delaware
(State or other jurisdiction of incorporation or organization) |
| |
6770
(Primary Standard Industrial Classification Code Number) |
| |
2657796
(I.R.S. Employer Identification Number) |
|
|
Copies to:
|
| ||||||
|
Jaclyn L. Cohen
Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 |
| |
Stephen M. Jones
Executive Vice President and Chief Financial Officer Hycroft Mining Corporation 8181 E. Tufts Avenue Denver, CO 80237 Tel: (303) 524-1947 Fax: (775) 201-1045 |
| |
David S. Stone
Neal, Gerber & Eisenberg LLP Two North LaSalle Street, Suite 1700 Chicago, IL 60602 Tel: (312) 269-8411 Fax: (312) 578-1796 |
|
| Large accelerated filer ☐ | | | Accelerated filer ☒ | | | Non-accelerated filer ☐ | | |
Smaller reporting company ☒
Emerging growth company ☒ |
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| | | | | 327 | | | |
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| | | | | 334 | | | |
| | | | | F-1 | | | |
| | | | | A-1 | | | |
| | | | | A-1-1 | | | |
| | | | | B-1 | | | |
| | | | | C-1 | | | |
| | | | | D-1 | | | |
| | | | | E-1 | | | |
| | | | | F-1 | | | |
| | | | | G-1 | | | |
| | | | | H-1 | | | |
| | | | | I-1 | | | |
| | | | | J-3 | | | |
| | | | | K-1 | | | |
| | | | | L-1 | | | |
| | | | | M-1 | | | |
| | | | | N-1 | | |
Beneficial owners
|
| |
Ownership
Percentage |
| |||
MUDS’ existing public stockholders
|
| | | | 13.8% | | |
Sponsor
|
| | | | 12.8% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 27.3% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 19.2% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 11.0% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 7.4% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 3.6% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.1% | | |
Cantor
|
| | | | 0.9% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 2.0% | | |
Beneficial owners
|
| |
Ownership
Percentage |
| |||
MUDS’ existing public stockholders
|
| | | | 0.0% | | |
Sponsor
|
| | | | 9.5% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 33.4% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 13.5% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 9.0% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 4.4% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.2% | | |
Cantor
|
| | | | 0.5% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 4.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 13.8% | | |
Sponsor
|
| | | | 12.8% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 27.3% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 19.2% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 11.0% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 7.4% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 3.6% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.1% | | |
Cantor
|
| | | | 0.9% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 2.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 0.0% | | |
Sponsor
|
| | | | 9.5% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 33.4% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 13.5% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 9.0% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 4.4% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.2% | | |
Cantor
|
| | | | 0.5% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 4.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 0.0% | | |
Sponsor
|
| | | | 9.5% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 33.4% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 13.5% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 9.0% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 4.4% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.2% | | |
Cantor
|
| | | | 0.5% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 4.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 13.8% | | |
Sponsor
|
| | | | 12.8% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 27.3% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 19.2% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 11.0% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 7.4% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 3.6% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.1% | | |
Cantor
|
| | | | 0.9% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 2.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 13.8% | | |
Sponsor
|
| | | | 12.8% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 27.3% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 19.2% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 11.0% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 7.4% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 3.6% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.1% | | |
Cantor
|
| | | | 0.9% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 2.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 0.0% | | |
Sponsor
|
| | | | 9.5% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 33.4% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 13.5% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 9.0% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 4.4% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.2% | | |
Cantor
|
| | | | 0.5% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 4.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 13.8% | | |
Sponsor
|
| | | | 12.8% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 27.3% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 19.2% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 11.0% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 7.4% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 3.6% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.1% | | |
Cantor
|
| | | | 0.9% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 2.0% | | |
Beneficial owners
|
| |
Ownership Percentage
|
| |||
MUDS’ existing public stockholders
|
| | | | 0.0% | | |
Sponsor
|
| | | | 9.5% | | |
Mudrick Capital Management L.P. and affiliated fund entities
|
| | | | 33.4% | | |
Whitebox Advisors and affiliated fund entities
|
| | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated fund entities
|
| | | | 13.5% | | |
Aristeia Capital, LLC and affiliated fund entities
|
| | | | 9.0% | | |
Wolverine Asset Management, LLC and affiliated fund entities
|
| | | | 4.4% | | |
Seller stockholders (collectively, but excluding the Initial Subscribers)
|
| | | | 1.2% | | |
Cantor
|
| | | | 0.5% | | |
Lender
|
| | | | 1.0% | | |
Investors in incremental private placement equity investment
|
| | | | 4.0% | | |
| | |
Enterprise Value / Contained Gold
Equivalent Ounce. |
| |||||||||
| | |
Reserves
(US$/oz) |
| |
Reserves & Resources
(US$/oz) |
| ||||||
Alio Gold Inc.
|
| | | $ | 21.2 | | | | | $ | 11.4 | | |
Argonaut Gold Inc.
|
| | | | 39.1 | | | | | | 17.1 | | |
Bullfrog Gold Corp.
|
| | | | nm | | | | | | 22.7 | | |
Corvus Gold Inc.
|
| | | | nm | | | | | | 50.9 | | |
Gold Standard Ventures Corp
|
| | | | 175.1 | | | | | | 79.7 | | |
Liberty Gold Corp.
|
| | | | nm | | | | | | 37.3 | | |
McEwen Mining Inc.
|
| | | | 655.3 | | | | | | 6.3 | | |
Orla Mining Ltd
|
| | | | 160.7 | | | | | | 18.4 | | |
Scorpio Gold Corporation
|
| | | | 7.7 | | | | | | 5.1 | | |
Victoria Gold Corp.
|
| | | | 172.0 | | | | | | 103.2 | | |
Hycroft business
|
| | | | 33.1 | | | | | | 19.2 | | |
| | | | | | | | | | | |
Transaction Value /
Contained Gold Equivalent Ounce |
| |||||||||
Target Asset(s)
|
| |
Acquiror
|
| |
Date Announced
|
| |
Reserves
(US$/oz) |
| |
Reserves &
Resources (US$/oz) |
| |||||||||
Denton-Rawhide, NV
|
| | EMX Royalty Corp. | | | | | 12/19/2019 | | | | | $ | 69.7 | | | | | $ | 44.5 | | |
Lincoln Hill-Gold Ridge, Wilco, NV
|
| | Coeur Mining, Inc. | | | | | 10/16/2018 | | | | | | nm | | | | | | 6.4 | | |
Bald Mountain, NV
|
| | Kinross Gold Corp. | | | | | 10/2/2018 | | | | | | 18.3 | | | | | | 5.5 | | |
Florida Canyon, NV
|
| | Alio Gold Inc. | | | | | 3/19/2018 | | | | | | nm | | | | | | 21.0 | | |
Railroad-Pinion, NV
|
| |
Gold Standard Ventures
Corporation |
| | | | 3/31/2017 | | | | | | nm | | | | | | 0.4 | | |
Spring Valley, NV
|
| |
Waterton Global Resource
Management |
| | | | 11/12/2015 | | | | | | nm | | | | | | 31.0 | | |
Mount Hamilton, NV
|
| |
Waterton Nevada Splitter LLC
|
| | | | 6/10/2015 | | | | | | 49.1 | | | | | | 31.2 | | |
Hycroft business
|
| | | | | | | | | | | | | 33.1 | | | | | | 19.2 | | |
| | |
Price Per Troy Ounce
|
| |||||||||||||||||||||||||||||||||
Metric
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| |
2024
|
| |
Long-Term
|
| ||||||||||||||||||
Gold Price – Management Price
|
| | | $ | 1,300 | | | | | $ | 1,300 | | | | | $ | 1,300 | | | | | $ | 1,300 | | | | | $ | 1,300 | | | | | $ | 1,300 | | |
Gold Price – Consensus Price
|
| | | $ | 1,500 | | | | | $ | 1,450 | | | | | $ | 1,438 | | | | | $ | 1,411 | | | | | $ | 1,400 | | | | | $ | 1,388 | | |
Gold Price – Inflation-adjusted Forward Price
|
| | | $ | 1,553 | | | | | $ | 1,542 | | | | | $ | 1,530 | | | | | $ | 1,517 | | | | | $ | 1,506 | | | | | $ | 1,506 | | |
Silver Price – Management Price
|
| | | $ | 17.33 | | | | | $ | 17.33 | | | | | $ | 17.33 | | | | | $ | 17.33 | | | | | $ | 17.33 | | | | | $ | 17.33 | | |
Silver Price – Consensus Price
|
| | | $ | 17.77 | | | | | $ | 18.00 | | | | | $ | 18.23 | | | | | $ | 17.75 | | | | | $ | 17.50 | | | | | $ | 17.50 | | |
Silver Price – Inflation-adjusted Forward Price
|
| | | $ | 18.06 | | | | | $ | 18.02 | | | | | $ | 17.96 | | | | | $ | 17.88 | | | | | $ | 17.82 | | | | | $ | 17.82 | | |
Metric
|
| |
Net Present Value
|
| |||
| | |
(US dollars in millions)
|
| |||
NPV (Base Case – Management Price)
|
| | | $ | 1,867 | | |
NPV (Base Case – Consensus Price)
|
| | | $ | 2,179 | | |
NPV (Base Case – Forward Price)
|
| | | $ | 2,556 | | |
NPV (Sensitivity Case – Management Price)
|
| | | $ | 1,331 | | |
NPV (Sensitivity Case – Consensus Price)
|
| | | $ | 1,621 | | |
NPV (Sensitivity Case – Forward Price)
|
| | | $ | 1,976 | | |
Selected Company
|
| |
Metric
|
| |||||||||||||||
| | |
EV/NPV
|
| |
EV/Au Eq.
Resources |
| |
EV/Au Eq.
Reserves |
| |||||||||
Falco Resources Ltd.
|
| | | | 0.19x | | | | | $ | 6 | | | | | $ | 9 | | |
INV Metals Inc.
|
| | | | 0.04x | | | | | $ | 9 | | | | | $ | 11 | | |
Midas Gold Corp.
|
| | | | 0.27x | | | | | $ | 23 | | | | | $ | 32 | | |
Orezone Gold Corporation
|
| | | | 0.13x | | | | | $ | 9 | | | | | $ | 30 | | |
| | |
Selected Companies
|
| |||
Metric
|
| |
Low
|
| |
High
|
|
EV/NPV
|
| |
0.04x
|
| |
0.27x
|
|
EV/Au Eq. Resources
|
| |
$6
|
| |
$23
|
|
EV/Au Eq. Reserves
|
| |
$9
|
| |
$32
|
|
| | |
Implied Enterprise Value
(US dollars in millions) |
| |||||||||
Metric
|
| |
Low
|
| |
High
|
| ||||||
EV/NPV (Base Case – Management Price)
|
| | | $ | 75 | | | | | $ | 504 | | |
EV/ NPV (Base Case – Consensus Price)
|
| | | $ | 87 | | | | | $ | 588 | | |
EV/ NPV (Base Case – Forward Price)
|
| | | $ | 102 | | | | | $ | 690 | | |
EV/ NPV (Sensitivity Case – Management Price)
|
| | | $ | 53 | | | | | $ | 359 | | |
EV/ NPV (Sensitivity Case – Consensus Price)
|
| | | $ | 65 | | | | | $ | 438 | | |
EV/ NPV (Sensitivity Case – Forward Price)
|
| | | $ | 79 | | | | | $ | 534 | | |
EV/ Au Eq. Resources
|
| | | $ | 187 | | | | | $ | 717 | | |
EV/ Au Eq. Reserves
|
| | | $ | 163 | | | | | $ | 578 | | |
Announcement Date
|
| |
Target
|
| |
Acquiror
|
|
September 23, 2019 | | | Barkerville Gold Mines Ltd. | | | Osisko Gold Royalties Ltd. | |
August 26, 2019 | | | Echo Resources Limited | | |
Northern Star Resources Limited
|
|
June 21, 2018 | | | Dalradian Resources Inc. | | | Orion Resource Partners | |
November 7, 2017 | | | AuRico Metals Inc. | | | Centerra Gold Inc. | |
October 25, 2017 | | | NewCastle Gold Ltd. | | | Trek Mining Inc. | |
June 28, 2017 | | | Avnel Gold Mining Limited | | | Endeavor Mining Corporation | |
February 28, 2016 | | | Amara Mining Plc | | | Perseus Mining Limited | |
October 21, 2014 | | | Fruta del Norte Project | | | Lundin Gold Inc. | |
May 31, 2013 | | | Rainy River Resources Ltd. | | | New Gold Inc. | |
October 15, 2012 | | | Prodigy Gold Inc. | | | Argonaut Gold Inc. | |
April 27, 2012 | | | Trelawney Mining and Exploration Inc. | | | IAMGOLD Corporation | |
Announcement Date
|
| |
Target
|
| |
Acquiror
|
| |
EV/NPV
|
| |
EV/ Au. Eq. Resources
|
|
September 23, 2019 | | |
Barkerville Gold Mines Ltd.
|
| |
Osisko Gold Royalties Ltd.
|
| |
0.36x
|
| |
$50
|
|
August 26, 2019 | | |
Echo Resources Limited
|
| |
Northern Star Resources Limited
|
| |
Not Available
|
| |
$61
|
|
June 21, 2018 | | |
Dalradian Resources Inc.
|
| |
Orion Resource Partners
|
| |
0.39x
|
| |
$40
|
|
November 7, 2017
|
| |
AuRico Metals Inc.
|
| |
Centerra Gold Inc.
|
| |
Not Available
|
| |
$37
|
|
October 25, 2017 | | |
NewCastle Gold Ltd.
|
| |
Trek Mining Inc.
|
| |
0.43x
|
| |
$34
|
|
June 28, 2017 | | |
Avnel Gold Mining Limited
|
| |
Endeavor Mining Corporation
|
| |
0.21x
|
| |
$18
|
|
February 28, 2016
|
| |
Amara Mining Plc
|
| |
Perseus Mining Limited
|
| |
Not Available
|
| |
$12
|
|
October 21, 2014 | | |
Fruta del Norte Project
|
| |
Lundin Gold Inc.
|
| |
Not Available
|
| |
$24
|
|
May 31, 2013 | | |
Rainy River Resources Ltd.
|
| |
New Gold Inc.
|
| |
0.50x
|
| |
$35
|
|
October 15, 2012 | | |
Prodigy Gold Inc.
|
| |
Argonaut Gold Inc.
|
| |
0.47x
|
| |
$43
|
|
April 27, 2012 | | |
Trelawney Mining and Exploration Inc.
|
| |
IAMGOLD Corporation
|
| |
0.51x
|
| |
$74
|
|
Metric
|
| |
Low
|
| |
High
|
|
EV/NPV
|
| |
0.21x
|
| |
0.51x
|
|
EV/ Au. Eq. Resources (inclusive of Au. Eq. Reserves)
|
| |
$12
|
| |
$39
|
|
Metric
|
| |
Implied Enterprise Value
(US dollars in millions) |
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
EV/NPV (Base Case – Management Price)
|
| | | $ | 392 | | | | | $ | 952 | | |
EV/ NPV (Base Case – Consensus Price)
|
| | | $ | 458 | | | | | $ | 1,111 | | |
EV/ NPV (Base Case – Forward Price)
|
| | | $ | 537 | | | | | $ | 1,304 | | |
EV/ NPV (Sensitivity Case – Management Price)
|
| | | $ | 279 | | | | | $ | 679 | | |
EV/ NPV (Sensitivity Case – Consensus Price)
|
| | | $ | 340 | | | | | $ | 827 | | |
EV/ NPV (Sensitivity Case – Forward Price)
|
| | | $ | 415 | | | | | $ | 1,008 | | |
EV/ Au Eq. Resources (inclusive of Au. Eq. Reserves)
|
| | | $ | 374 | | | | | $ | 1,216 | | |
| | |
Years 1 – 5
|
| |
Years 1 – 10
|
| |
LOM
|
| |||||||||
Production AuEq (k oz)
|
| | | | 908 | | | | | | 2,812 | | | | | | 12,432 | | |
AISC(1)(3) ($ / oz)
|
| | | $ | 775 | | | | | $ | 766 | | | | | $ | 548 | | |
Unlevered Free Cash Flow(2)(3)(4) ($ mm)
|
| | | $ | 123 | | | | | $ | 786 | | | | | $ | 5,062 | | |
Capital ($ mm)
|
| | | $ | 225 | | | | | $ | 491 | | | | | $ | 758 | | |
Case
|
| |
Metal Prices ($/oz.)
|
| |
NPV
Cumulative Unlevered FCF |
| |
NPV@ 5%
|
| |
NPV @ 10%
|
| |
After Tax IRR
|
| |||||||||||||||||||||
| | |
Au
|
| |
Ag
|
| |
$ Billions
|
| |
$ Billions
|
| |
$ Billions
|
| | | | | | | |||||||||||||||
1
|
| | | $ | 1,200 | | | | | $ | 16.50 | | | | | $ | 4.2 | | | | | $ | 1.7 | | | | | $ | 0.8 | | | | | | 80% | | |
2 | | | | $ | 1,300 | | | | | $ | 17.33 | | | | | $ | 5.1 | | | | | $ | 2.1 | | | | | $ | 1.1 | | | | | | 148% | | |
3
|
| | | $ | 1,400 | | | | | $ | 18.67 | | | | | $ | 6.1 | | | | | $ | 2.6 | | | | | $ | 1.3 | | | | | | 304% | | |
4
|
| | | $ | 1,500 | | | | | $ | 20.00 | | | | | $ | 7.1 | | | | | $ | 3.0 | | | | | $ | 1.6 | | | | | | N/A | | |
| | |
20%
Decrease |
| |
10%
Decrease |
| |
Base
Case |
| |
10%
Increase |
| |
20%
Increase |
|
Mining Cost
|
| |
$2.41 billion
|
| |
$2.25 billion
|
| | | | |
$1.91 billion
|
| |
$1.75 billion
|
|
Processing Cost
|
| |
$2.43 billion
|
| |
$2.26 billion
|
| |
$2.1 billion
|
| |
$1.90 billion
|
| |
$1.72 billion
|
|
CapEx
|
| |
$2.18 billion
|
| |
$2.13 billion
|
| | | | |
$2.03 billion
|
| |
$1.98 billion
|
|
Sources
|
| | | | | | | |
Uses(3)
|
| | | | | | |
Cash in MUDS Trust Account(1)
|
| | | $ | 96.8 | | | |
Remaining Cash(4)
|
| | | $ | 64.0 | | |
Opening Cash(2)
|
| | | $ | 5.0 | | | |
Opening Cash
|
| | | $ | 5.0 | | |
Private Investment
|
| | | $ | 3.2 | | | |
First Lien Notes
|
| | | $ | 125.5 | | |
Sprott Credit Agreement
|
| | | $ | 70.0 | | | |
Jacobs Notes
|
| | | $ | 6.9 | | |
Sprott Royalty Agreement
|
| | | $ | 30.0 | | | |
Transaction Fees
|
| | | $ | 13.6 | | |
Incremental Equity Investment
|
| | | $ | 10.0 | | | | | | | | | | | |
Total Sources
|
| | | $ | 215.0 | | | |
Total Uses
|
| | | $ | 215.0 | | |
Sources
|
| | | | | | | |
Uses(3)
|
| | |||||
Cash in MUDS Trust Account(1)
|
| | | $ | 25.0 | | | |
Remaining Cash(4)
|
| | | $ | 65.6 | | |
Opening Cash(2)
|
| | | $ | 5.0 | | | |
Opening Cash
|
| | | $ | 5.0 | | |
Private Investment
|
| | | $ | 65.0 | | | |
First Lien Notes
|
| | | $ | 125.5 | | |
Sprott Credit Agreement
|
| | | $ | 70.0 | | | |
Jacobs Notes
|
| | | $ | 6.9 | | |
Sprott Royalty Agreement
|
| | | $ | 30.0 | | | |
Transaction Fees
|
| | | $ | 12.0 | | |
Incremental Equity Investment
|
| | | $ | 20.0 | | | | | | | | | | | |
Total Sources
|
| | | $ | 215.0 | | | |
Total Uses
|
| | | $ | 215.0 | | |
Income Statement Data:
|
| |
For the
year ended December 31, 2019 |
| |
For the
year ended December 31, 2018 |
| ||||||
Loss from operations
|
| | | $ | (875,900) | | | | | $ | (609,581) | | |
Interest income
|
| | | | 4,386,528 | | | | | | 2,844,993 | | |
Net income (loss)
|
| | | | 2,610,824 | | | | | | 1,679,963 | | |
Weighted average shares outstanding of Class A common stock, basic and diluted
|
| | | | 20,800,000 | | | | | | 20,800,000 | | |
Basic and diluted net income per share, Class A
|
| | | $ | 0.16 | | | | | $ | 0.10 | | |
Weighted average shares outstanding of Class B common stock, basic and diluted
|
| | | | 5,200,000 | | | | | | 5,200,000 | | |
Basic and diluted net loss per share, Class A
|
| | | $ | (0.13) | | | | | $ | (0.08) | | |
Balance Sheet Data:
|
| |
As of
December 31, 2019 |
| |
As of
December 31, 2018 |
| ||||||
Trust account, restricted
|
| | | | 215,385,757 | | | | | | 212,916,691 | | |
Total assets
|
| | | | 215,693,534 | | | | | | 213,504,932 | | |
Total liabilities
|
| | | | 7,614,619 | | | | | | 8,036,841 | | |
Value of common stock which may be redeemed for cash
|
| | | | 203,078,914 | | | | | | 200,468,083 | | |
Stockholders’ equity
|
| | | | 5,000,001 | | | | | | 5,000,008 | | |
| | | | | | | | | | | | | | |
No Redemption Scenario
|
| |
Maximum Redemption Scenario
|
| ||||||||||||||||||||||||||||||
| | |
(a)
Seller Subsidiaries |
| |
(b)
MUDS |
| |
Pro Forma
Adjustments (No Redemptions) |
| | | | | | | |
Pro Forma
Combined (No Redemptions) |
| |
Pro Forma
Adjustments (Max Redemptions) |
| | | | | | | |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||||||||
Assets: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Cash
|
| | | $ | 6,220 | | | | | $ | 209 | | | | | | 1,270 | | | | |
|
c
|
| | | | | | | | | | | 1,270 | | | | |
|
c
|
| | | |||||
| | | | | | | | | | | | | | | | | (1,590) | | | | |
|
c
|
| | | | | | | | | | | (1,590) | | | | |
|
c
|
| | | |||||
| | | | | | | | | | | | | | | | | 25,000 | | | | |
|
d
|
| | | | | | | | | | | 25,000 | | | | |
|
d
|
| | | |||||
| | | | | | | | | | | | | | | | | 71,735 | | | | |
|
d
|
| | | | | | | | | | | — | | | | |
|
d
|
| | | |||||
| | | | | | | | | | | | | | | | | 98,600 | | | | |
|
e
|
| | | | | | | | | | | 98,600 | | | | |
|
e
|
| | | |||||
| | | | | | | | | | | | | | | | | 10,000 | | | | |
|
f
|
| | | | | | | | | | | 20,000 | | | | |
|
f
|
| | | |||||
| | | | | | | | | | | | | | | | | (133,087) | | | | |
|
g
|
| | | | | | | | | | | (133,087) | | | | |
|
g
|
| | | |||||
| | | | | | | | | | | | | | | | | (13,589) | | | | |
|
h
|
| | | | | | | | | | | (12,014) | | | | |
|
h
|
| | | |||||
| | | | | | | | | | | | | | | | | 3,265 | | | | |
|
i
|
| | | | $ | 68,033 | | | | | | 65,000 | | | | |
|
i
|
| | | | $ | 69,608 | | |
Restricted cash
|
| | | | 3,270 | | | | | | | | | | | | (3,270) | | | | |
|
c
|
| | | | | — | | | | | | (3,270) | | | | |
|
c
|
| | | | | — | | |
Accounts receivable
|
| | | | 97 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 97 | | | | | | | | | | | | 97 | | |
Inventories
|
| | | | 4,453 | | | | | | | | | | | | | | | | | | | | | | | | 4,453 | | | | | | | | | | | | | | | | | | 4,453 | | |
Ore on leach pads
|
| | | | 22,062 | | | | | | | | | | | | | | | | | | | | | | | | 22,062 | | | | | | | | | | | | | | | | | | 22,062 | | |
Prepaids and other
|
| | | | 2,648 | | | | | | 99 | | | | | | | | | | | | | | | | | | 2,747 | | | | | | | | | | | | | | | | | | 2,747 | | |
Current assets
|
| | | | 38,750 | | | | | | 308 | | | | | | 58,334 | | | | | | | | | | | | 97,392 | | | | | | 59,909 | | | | | | | | | | | | 98,967 | | |
Investments held in Trust account
|
| | | | | | | | | | 215,386 | | | | | | (215,386) | | | | |
|
d
|
| | | | | — | | | | | | (215,386) | | | | |
|
d
|
| | | | | — | | |
Restricted cash
|
| | | | 39,477 | | | | | | | | | | | | | | | | | | | | | | | | 39,477 | | | | | | | | | | | | | | | | | | 39,477 | | |
Plant and equipment, net
|
| | | | 51,207 | | | | | | | | | | | | | | | | | | | | | | | | 51,207 | | | | | | | | | | | | | | | | | | 51,207 | | |
Deferred tax asset, net
|
| | | | | | | | | | | | | | | | — | | | | |
|
k
|
| | | | | — | | | | | | — | | | | |
|
k
|
| | | | | — | | |
Other assets, non-current
|
| | | | 5,203 | | | | | | | | | | | | (5,083) | | | | |
|
j
|
| | | | | 120 | | | | | | (5,083) | | | | |
|
j
|
| | | | | 120 | | |
Total assets
|
| | | $ | 134,637 | | | | | $ | 215,694 | | | | | $ | (162,135) | | | | | | | | | | | $ | 188,196 | | | | | $ | (160,560) | | | | | | | | | | | $ | 189,771 | | |
Liabilities: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Accounts payable
|
| | | $ | 10,746 | | | | | $ | 335 | | | | | | (1,025) | | | | |
|
h
|
| | | | $ | 10,056 | | | | | | (1,025) | | | | |
|
h
|
| | | | $ | 10,056 | | |
Interest payable
|
| | | | 846 | | | | | | | | | | | | (846) | | | | |
|
g
|
| | | | | — | | | | | | (846) | | | | |
|
g
|
| | | | | — | | |
Other liabilities, current
|
| | | | 3,939 | | | | | | | | | | | | (1,590) | | | | |
|
c
|
| | | | | 2,349 | | | | | | (1,590) | | | | |
|
c
|
| | | | | 2,349 | | |
Debt, current
|
| | | | 553,965 | | | | | | | | | | | | (553,965) | | | | |
|
g
|
| | | | | — | | | | | | (553,965) | | | | |
|
g
|
| | | | | — | | |
Current liabilities
|
| | | | 569,496 | | | | | | 335 | | | | | | (557,426) | | | | | | | | | | | | 12,405 | | | | | | (557,426) | | | | | | | | | | | | 12,405 | | |
Deferred underwriting fees
|
| | | | | | | | | | 7,280 | | | | | | (7,280) | | | | |
|
h
|
| | | | | — | | | | | | (7,280) | | | | |
|
h
|
| | | | | — | | |
Other liabilities, non-current
|
| | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | 18 | | | | | | | | | | | | | | | | | | 18 | | |
Debt, non-current
|
| | | | | | | | | | | | | | | | 64,350 | | | | |
|
e
|
| | | | | | | | | | | 64,350 | | | | |
|
e
|
| | | |||||
| | | | | | | | | | | | | | | | | 77,212 | | | | |
|
g
|
| | | | | | | | | | | 77,212 | | | | |
|
g
|
| | | |||||
| | | | | | | | | | | | | | | | | (5,083) | | | | |
|
j
|
| | | | | 136,479 | | | | | | (5,083) | | | | |
|
j
|
| | | | | 136,479 | | |
Royalty agreement
|
| | | | | | | | | | | | | | | | 30,000 | | | | |
|
e
|
| | | | | 30,000 | | | | | | 30,000 | | | | |
|
e
|
| | | | | 30,000 | | |
Asset retirement obligation, non-current
|
| | | | 4,374 | | | | | | | | | | | | | | | | | | | | | | | | 4,374 | | | | | | | | | | | | | | | | | | 4,374 | | |
Total liabilities
|
| | | | 573,888 | | | | | | 7,615 | | | | | | (398,227) | | | | | | | | | | | | 183,276 | | | | | | (398,227) | | | | | | | | | | | | 183,276 | | |
|
| | | | | | | | | | | | | | |
No Redemption Scenario
|
| |
Maximum Redemption Scenario
|
| ||||||||||||||||||||||||||||||
| | |
(a)
Seller Subsidiaries |
| |
(b)
MUDS |
| |
Pro Forma
Adjustments (No Redemptions) |
| | | | | | | |
Pro Forma
Combined (No Redemptions) |
| |
Pro Forma
Adjustments (Max Redemptions) |
| | | | | | | |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||||||||
Stockholders’ (Deficit) Equity: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Common stock subject to possible
redemption |
| | | | | | | | | | 203,079 | | | | | | (203,079) | | | | |
|
d
|
| | | | | — | | | | | | (203,079) | | | | |
|
d
|
| | | | | — | | |
Preferred stock
|
| | | | | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | — | | |
Class A Common stock
|
| | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | | | | 2 | | | | |
|
d
|
| | | | | | | | | | | 1 | | | | |
|
d
|
| | | |||||
| | | | | | | | | | | | | | | | | 4 | | | | |
|
g
|
| | | | | | | | | | | 4 | | | | |
|
g
|
| | | |||||
| | | | | | | | | | | | | | | | | — | | | | |
|
i
|
| | | | | 6 | | | | | | 1 | | | | |
|
i
|
| | | | | 6 | | |
Class B Common stock
|
| | | | | | | | | | 1 | | | | | | (1) | | | | |
|
d
|
| | | | | — | | | | | | (1) | | | | |
|
d
|
| | | | | — | | |
Common stock
|
| | | | | | | | | | 3 | | | | | | (3) | | | | |
|
c
|
| | | | | — | | | | | | (3) | | | | |
|
c
|
| | | | | — | | |
Additional paid-in capital
|
| | | | 5,184 | | | | | | 711 | | | | | | (1,235) | | | | |
|
c
|
| | | | | | | | | | | (1,235) | | | | |
|
c
|
| | | |||||
| | | | | | | | | | | | | | | | | 88,715 | | | | |
|
d
|
| | | | | | | | | | | 16,981 | | | | |
|
d
|
| | | |||||
| | | | | | | | | | | | | | | | | 4,250 | | | | |
|
e
|
| | | | | | | | | | | 4,250 | | | | |
|
e
|
| | | |||||
| | | | | | | | | | | | | | | | | 10,000 | | | | |
|
f
|
| | | | | | | | | | | 20,000 | | | | |
|
f
|
| | | |||||
| | | | | | | | | | | | | | | | | 321,047 | | | | |
|
g
|
| | | | | | | | | | | 321,047 | | | | |
|
g
|
| | | |||||
| | | | | | | | | | | | | | | | | 4,561 | | | | |
|
h
|
| | | | | | | | | | | 2,371 | | | | |
|
h
|
| | | |||||
| | | | | | | | | | | | | | | | | 3,265 | | | | |
|
i
|
| | | | | 436,498 | | | | | | 64,999 | | | | |
|
i
|
| | | | | 434,308 | | |
Retained earnings (accumulated deficit)
|
| | | | (444,438) | | | | | | 4,288 | | | | | | 23,461 | | | | |
|
g
|
| | | | | | | | | | | 23,461 | | | | |
|
g
|
| | | |||||
| | | | | | | | | | | | | | | | | (762) | | | | |
|
c
|
| | | | | | | | | | | (762) | | | | |
|
c
|
| | | |||||
| | | | | | | | | | | | | | | | | (4,288) | | | | |
|
d
|
| | | | | | | | | | | (4,288) | | | | |
|
d
|
| | | |||||
| | | | | | | | | | | | | | | | | (9,845) | | | | |
|
h
|
| | | | | (431,584) | | | | | | (6,080) | | | | |
|
h
|
| | | | | (427,819) | | |
Total stockholders’ (deficit) equity
|
| | | | (439,251) | | | | | | 208,079 | | | | | | 236,092 | | | | | | | | | | | | 4,920 | | | | | | 237,667 | | | | | | | | | | | | 6,495 | | |
Total liabilities and stockholders’ (deficit) equity
|
| | | $ | 134,637 | | | | | $ | 215,694 | | | | | $ | (162,135) | | | | | | | | | | | $ | 188,196 | | | | | $ | (160,560) | | | | | | | | | | | $ | 189,771 | | |
|
| | | | | | | | | | | | | | |
No Redemption Scenario
|
| |
Maximum Redemption Scenario
|
| ||||||||||||||||||||||||||||||
| | |
(a)
Seller Subsidiaries |
| |
(b)
MUDS |
| |
Pro Forma
Adjustments (No Redemptions) |
| | | | | | | |
Pro Forma
Combined (No Redemptions) |
| |
Pro Forma
Adjustments (Max Redemptions) |
| | | | | | | |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||||||||
Revenues
|
| | | $ | 13,709 | | | | | | | | | | | | | | | | | | | | | | | $ | 13,709 | | | | | | | | | | | | | | | | |
$
|
13,709
|
| |
Cost of sales: | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||
Production costs
|
| | | | 11,041 | | | | | | | | | | | | 206 | | | | |
|
c
|
| | | | | 11,247 | | | | | | 206 | | | | |
|
c
|
| | | | | 11,247 | | |
Depreciation and amortization
|
| | | | 1,011 | | | | | | | | | | | | | | | | | | | | | | | | 1,011 | | | | | | | | | | | | | | | | | | 1,011 | | |
Write-down of production inventories
|
| | | | 18,617 | | | | | | | | | | | | | | | | | | | | | | | | 18,617 | | | | | | | | | | | | | | | | | | 18,617 | | |
Total cost of sales
|
| | | | 30,669 | | | | | | — | | | | | | 206 | | | | | | | | | | | | 30,875 | | | | | | 206 | | | | | | | | | | | | 30,875 | | |
Operating expenses: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Project and development
|
| | | | 7,708 | | | | | | | | | | | | | | | | | | | | | | | | 7,708 | | | | | | | | | | | | | | | | | | 7,708 | | |
Care and maintenance
|
| | | | 3,529 | | | | | | | | | | | | | | | | | | | | | | | | 3,529 | | | | | | | | | | | | | | | | | | 3,529 | | |
Pre-production depreciation and amortization
|
| | | | 1,067 | | | | | | | | | | | | | | | | | | | | | | | | 1,067 | | | | | | | | | | | | | | | | | | 1,067 | | |
Accretion
|
| | | | 422 | | | | | | | | | | | | | | | | | | | | | | | | 422 | | | | | | | | | | | | | | | | | | 422 | | |
General and administrative
|
| | | | 6,072 | | | | | | 876 | | | | | | (1,582) | | | | |
|
d
|
| | | | | 5,366 | | | | | | (1,582) | | | | |
|
d
|
| | | | | 5,366 | | |
Reduction in asset retirement obligation
|
| | | | (1,880) | | | | | | | | | | | | | | | | | | | | | | | | (1,880) | | | | | | | | | | | | | | | | | | (1,880) | | |
Impairment of long-lived assets
|
| | | | 63 | | | | | | | | | | | | | | | | | | | | | | | | 63 | | | | | | | | | | | | | | | | | | 63 | | |
Loss from operations
|
| | | | (33,941) | | | | | | (876) | | | | | | 1,376 | | | | | | | | | | | | (33,441) | | | | | | 1,376 | | | | | | | | | | | | (33,441) | | |
Other income (expense): | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Interest income
|
| | | | 795 | | | | | | 4,387 | | | | | | (4,387) | | | | |
|
e
|
| | | | | 795 | | | | | | (4,387) | | | | |
|
e
|
| | | | | 795 | | |
Interest expense
|
| | | | (64,844) | | | | | | | | | | | | 51,521 | | | | |
|
f
|
| | | | | (13,323) | | | | | | 51,521 | | | | |
|
f
|
| | | | | (13,323) | | |
Loss before reorganization items, net and income taxes
|
| | | | (97,990) | | | | | | 3,511 | | | | | | 48,510 | | | | | | | | | | | | (45,969) | | | | | | 48,510 | | | | | | | | | | | | (45,969) | | |
Reorganization items, net
|
| | | | (905) | | | | | | | | | | | | | | | | | | | | | | | | (905) | | | | | | | | | | | | | | | | | | (905) | | |
Loss before income taxes
|
| | | | (98,895) | | | | | | 3,511 | | | | | | 48,510 | | | | | | | | | | | | (46,874) | | | | | | 48,510 | | | | | | | | | | | | (46,874) | | |
Income tax
|
| | | | — | | | | | | (900) | | | | | | 900 | | | | |
|
g
|
| | | | | — | | | | | | 900 | | | | |
|
g
|
| | | | | — | | |
Net loss
|
| | | $ | (98,895) | | | | | $ | 2,611 | | | | | $ | 49,410 | | | | | | | | | | | $ | (46,874) | | | | | $ | 49,410 | | | | | | | | | | |
$
|
(46,874
)
|
| |
Loss per share: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Basic and diluted
|
| | | $ | (36.10) | | | | | | | | | | | | | | | | | | | | | | | $ | (0.94) | | | | | | | | | | | | | | | | | $ | (0.94) | | |
Weighted average shares outstanding: | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||
Basic and diluted
|
| | | | 2,739,505 | | | | | | | | | | | | 47,272,555 | | | | | | | | | | | | 50,012,060 | | | | | | 47,318,182 | | | | | | | | | | | | 50,057,687 | | |
Preliminary Estimated Consideration
|
| |
(a)
No Redemptions |
| |
(b)
Maximum Redemptions |
| ||||||
Cash: | | | | ||||||||||
Investments held in Trust account(1)
|
| | | $ | 71,735 | | | | | $ | — | | |
Sprott Credit Agreement(2)
|
| | | | 68,600 | | | | | | 68,600 | | |
Royalty Agreement(3)
|
| | | | 30,000 | | | | | | 30,000 | | |
Sponsor forward purchase (MUDS units and shares)(4)
|
| | | | 25,000 | | | | | | 25,000 | | |
Proceeds from PIPE Investment (MUDS stock)(5)
|
| | | | 10,000 | | | | | | 20,000 | | |
Backstop Agreement (MUDS stock and warrants)(6)
|
| | | | 3,265 | | | | | | 65,000 | | |
Class A common stock: | | | | | | | | | |||||
MUDS stock issued to holders of Seller’s 1.5 Lien Notes(7)
|
| | | | 150,755 | | | | | | 150,755 | | |
MUDS stock issued to former holders of Seller’s Second Lien Notes(8)(9)
|
| | | | 170,296 | | | | | | 170,296 | | |
MUDS stock issued to Seller’s common stockholders(8)(9)
|
| | | | 3,949 | | | | | | 3,949 | | |
Assumed debt: | | | | | | | | | |||||
New Subordinated Notes(10)
|
| | | | 77,212 | | | | | | 77,212 | | |
Estimated Consideration, Gross
|
| | | | 610,812 | | | | | | 610,812 | | |
Transaction fees and costs: | | | | ||||||||||
Management incentive compensation(11)
|
| | | | (7,339) | | | | | | (5,764) | | |
Deferred underwriting fees(12)
|
| | | | (7,061) | | | | | | (4,871) | | |
Investment banking advisory services(13)
|
| | | | (3,750) | | | | | | (3,750) | | |
Estimated Fees and Costs
|
| | | | (18,150) | | | | | | (14,385) | | |
Estimated Consideration, Net
|
| | | $ | 592,662 | | | | | $ | 596,427 | | |
| | | | | | | | |
Pro Forma Adjustments
|
| | | |||||||||||||||||||||||||
| | |
Seller
Subsidiaries |
| |
1.5 Lien Notes
Exchanged at 110% |
| |
Cash
Retained by Seller |
| |
Pro Rata
Adjustments |
| |
Total Pro
Forma Adjustments |
| |
Pro Forma
Combined(1) |
| ||||||||||||||||||
Additional paid-in capital
|
| | | $ | 5,184 | | | | | | | | | | | $ | (2,000) | | | | | $ | 765 | | | | | $ | (1,235) | | | | | $ | 3,949 | | |
Debt, current: | | | | | | | | | | | | | |||||||||||||||||||||||||
1.5 Lien Notes
|
| | | | 137,050 | | | | | | 13,705 | | | | | | | | | | | | | | | | | | 13,705 | | | | | | 150,755 | | |
Second Lien Notes
|
| | | | 208,411 | | | | | | | | | | | | | | | | | | (38,115) | | | | | | (38,115) | | | | | | 170,296 | | |
| | | |
$
|
350,645
|
| | | | $ | 13,705 | | | | | $ | (2,000) | | | | | $ | (37,350) | | | | | $ | (25,645) | | | | |
$
|
325,000
|
| |
| | |
Seller
Subsidiaries Balance |
| |
Adjustments
|
| |
Cash
Repayments |
| |
Issuance of
New Subord. Notes |
| |
Equity
Conversions / Exchanges |
| |
Pro Forma
Combined |
| ||||||||||||||||||
Debt, current | | | | | | | | ||||||||||||||||||||||||||||||
First Lien Agreement
|
| | | $ | 125,468 | | | | | | | | | | | $ | (125,468) | | | | | | | | | | | | | | | | | $ | — | | |
1.25 Lien Notes
|
| | | | 77,212 | | | | | | | | | | | | | | | | | | (77,212) | | | | | | | | | | | | — | | |
1.5 Lien Notes
|
| | | | 137,050 | | | | | | 13,705 | | | | | | — | | | | | | | | | | | | (150,755) | | | | | | — | | |
Second Lien Notes
|
| | | | 208,411 | | | | | | (38,115) | | | | | | | | | | | | | | | | | | (170,296) | | | | |||||
Jacobs Note
|
| | | | 6,773 | | | | | | | | | | | | (6,773) | | | | | | | | | | | | | | | | | | — | | |
Less, debt issuance costs
|
| | | | (949) | | | | | | 949 | | | | | | | | | | | | | | | | | | | | | | | | — | | |
| | | | $ | 553,965 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | — | | |
Interest payable | | | | | | | | | | | | | |||||||||||||||||||||||||
First Lien Agreement
|
| | | $ | 846 | | | | | | | | | | | | (846) | | | | | | | | | | | | | | | | | $ | — | | |
| | | | | | | | | | $ | (23,461) | | | | | $ | (133,087) | | | | | $ | (77,212) | | | | | $ | (321,051) | | | | | | | | |
| | |
Seller
Subsidiaries Balance |
| |
Pro Forma
Adjustments |
| |
Pro Forma
Combined |
| | |||||||||||
First Lien Agreement
|
| | | $ | 10,022 | | | | | $ | (10,022) | | | | | $ | — | | | | ||
1.25 Lien Notes
|
| | | | 5,241 | | | | | | (5,241) | | | | | | — | | | | ||
1.5 Lien Notes
|
| | | | 18,763 | | | | | | (18,763) | | | | | | — | | | | ||
Second Lien Notes
|
| | | | 28,537 | | | | | | (28,537) | | | | | | — | | | | ||
Jacobs Note
|
| | | | 785 | | | | | | (785) | | | | | | — | | | | ||
Amortization of debt issuance costs
|
| | | | 2,047 | | | | | | (2,047) | | | | | | — | | | | ||
Less: capitalized interest
|
| | | | (551) | | | | | | | | | | | | (551) | | | | ||
Assumed New Subordinated Notes
|
| | | | | | | | | | 7,721 | | | | | | 7,721 | | | | | |
Sprott Credit Agreement
|
| | | | | | | | | | 6,153 | | | | | | 6,153 | | | | | |
| | | | $ | 64,844 | | | | | $ | (51,521) | | | | | $ | 13,323 | | | | ||
|
| | | | | | | | | | | | | | |
Pro Forma Adjustments — No Redemption Scenario
|
| | ||||||||||||||||||||||||||||||||||||||||||||
Description
|
| |
Seller
Subsidiaries |
| |
Mudrick
Capital Acquisition Corporation |
| |
See
Note 2(c) for further detail |
| |
See
Note 2(d) for further detail |
| |
See
Note 2(e) for further detail |
| |
See
Note 2(f) for further detail |
| |
See
Note 2(g) for further detail |
| |
See
Note 2(h) for further detail |
| |
See
Note 2(i) for further detail |
| |
Pro Forma
Combined (No Redemptions) |
| ||||||||||||||||||||||||||||||
Seller’s common stockholders
|
| | | | 2,897,568 | | | | | | | | | | | | (2,502,711) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 394,857 | | |
MUDS’ stockholders: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock subject to
redemption |
| | | | | | | | | | 20,106,823 | | | | | | | | | | | | (20,106,823) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Class A Common Stock:
|
| | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Existing stockholders
|
| | | | | | | | | | 693,177 | | | | | | | | | | | | 6,216,110 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,909,287 | | |
Sponsor forward purchase
|
| | | | | | | | | | | | | | | | | | | | | | 3,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,125,000 | | |
Shares retained by Sponsor
from Class B conversions |
| | | | | | | | | | | | | | | | | | | | | | 3,258,333 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,258,333 | | |
Surrendered Shares to Seller’s stockholders and Second Lien Noteholders
|
| | | | | | | | | | | | | | | | | | | | | | 1,941,667 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,941,667 | | |
Class B Common Stock
|
| | | | | | | | | | 5,200,000 | | | | | | | | | | | | (5,200,000) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
PIPE Investment
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,000,000 | | | | | | | | | | | | | | | | | | | | | | | | 1,000,000 | | |
Exchange and conversions of Seller’s debt:
|
| | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
1.25 Lien Notes
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
1.5 Lien Notes
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,075,500 | | | | | | | | | | | | | | | | | | 15,075,500 | | |
Former holders of Second Lien
Notes |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,029,643 | | | | | | | | | | | | | | | | | | 17,029,643 | | |
Deferred underwriting fees (Cantor)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 456,104 | | | | | | | | | | | | 456,104 | | |
Sprott Credit Agreement
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 495,169 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 495,169 | | |
Backstop Agreement with Initial Subscribers
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 326,500 | | | | | | 326,500 | | |
| | | | | 2,897,568 | | | | | | 26,000,000 | | | | | | (2,502,711) | | | | | | (10,765,713) | | | | | | 495,169 | | | | | | 1,000,000 | | | | | | 32,105,143 | | | | | | 456,104 | | | | | | 326,500 | | | | | | 50,012,060 | | |
| | | | | | | | | | | | | | |
Pro Forma Adjustments — Maximum Redemption Scenario
|
| | ||||||||||||||||||||||||||||||||||||||||||||
Description
|
| |
Seller
Subsidiaries |
| |
Mudrick
Capital Acquisition Corporation |
| |
See
Note 2(c) for further detail |
| |
See
Note 2(d) for further detail |
| |
See
Note 2(e) for further detail |
| |
See
Note 2(f) for further detail |
| |
See
Note 2(g) for further detail |
| |
See
Note 2(h) for further detail |
| |
See
Note 2(i) for further detail |
| |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||||||||||||||||||||
Seller’s common stockholders
|
| | | | 2,897,568 | | | | | | | | | | | | (2,502,711) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 394,857 | | |
MUDS’ stockholders: | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock subject to
redemption |
| | | | | | | | | | 20,106,823 | | | | | | | | | | | | (20,106,823) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Class A Common Stock:
|
| | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Existing stockholders
|
| | | | | | | | | | 693,177 | | | | | | | | | | | | (693,177) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
Sponsor forward purchase
|
| | | | | | | | | | | | | | | | | | | | | | 3,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,125,000 | | |
Shares retained by Sponsor
from Class B conversions |
| | | | | | | | | | | | | | | | | | | | | | 1,615,384 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,615,384 | | |
Surrendered Shares to Seller’s stockholders and Second Lien Noteholders
|
| | | | | | | | | | | | | | | | | | | | | | 3,584,616 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,584,616 | | |
Class B Common Stock
|
| | | | | | | | | | 5,200,000 | | | | | | | | | | | | (5,200,000) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
PIPE Investment
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,000,000 | | | | | | | | | | | | | | | | | | | | | | | | 2,000,000 | | |
Exchange and conversions of Seller’s debt:
|
| | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||
1.25 Lien Notes
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |
1.5 Lien Notes
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,075,500 | | | | | | | | | | | | | | | | | | 15,075,500 | | |
Former holders of Second Lien Notes
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,029,643 | | | | | | | | | | | | | | | | | | 17,029,643 | | |
Deferred underwriting fees (Cantor)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 237,067 | | | | | | | | | | | | 237,067 | | |
Sprott Credit Agreement
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 495,621 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 495,621 | | |
Backstop Agreement with Initial Subscribers
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,500,000 | | | | | | 6,500,000 | | |
| | | | | 2,897,568 | | | | | | 26,000,000 | | | | | | (2,502,711) | | | | | | (17,675,000) | | | | | | 495,621 | | | | | | 2,000,000 | | | | | | 32,105,143 | | | | | | 237,067 | | | | | | 6,500,000 | | | | | | 50,057,687 | | |
|
| | |
Year ended December 31, 2019
|
| |||||||||
| | |
No
Redemptions |
| |
Max
Redemptions |
| ||||||
Net loss
|
| | | $ | (46,874) | | | | | $ | (46,874) | | |
Basic and diluted shares outstanding
|
| | | | 50,012,060 | | | | | | 50,057,687 | | |
Basic and diluted loss per share
|
| | | $ | (0.94) | | | | | $ | (0.94) | | |
(in thousands except per share amounts)
|
| |
Seller
Subsidiaries |
| |
Mudrick
Capital Acquisition Corporation |
| |
Pro Forma
Combined (No Redemptions) |
| |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||
Year ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss): | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss attributable to common stock
|
| | | $ | (98,895) | | | | | | | | | | | $ | (46,874) | | | | | $ | (46,874) | | |
Net income attributable to Class A common
stock |
| | | | | | | | | $ | 3,280 | | | | | | | | | | | | | | |
Net loss attributable to Class B common stock
|
| | | | | | | | | $ | (669) | | | | | | | | | | | | | | |
(in thousands except per share amounts)
|
| |
Seller
Subsidiaries |
| |
Mudrick
Capital Acquisition Corporation |
| |
Pro Forma
Combined (No Redemptions) |
| |
Pro Forma
Combined (Max Redemptions) |
| ||||||||||||
Outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 2,739,505 | | | | | | | | | | | | 50,012,060 | | | | | | 50,057,687 | | |
Class A common stock
|
| | | | | | | | | | 20,800,000 | | | | | | | | | | | | | | |
Class B common stock
|
| | | | | | | | | | 5,200,000 | | | | | | | | | | | | | | |
Income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock, basic and diluted
|
| | | $ | (36.10) | | | | | | | | | | | $ | (0.94) | | | | | $ | (0.94) | | |
Class A common stock, basic and diluted
|
| | | | | | | | | $ | 0.16 | | | | | | | | | | | | | | |
Class B common stock, basic and diluted
|
| | | | | | | | | $ | (0.13) | | | | | | | | | | | | | | |
Name
|
| |
Age
|
| |
Position
|
|
Jason Mudrick | | |
45
|
| | Chief Executive Officer and Director | |
Victor Danh | | |
42
|
| | Vice President | |
David Kirsch | | |
40
|
| | Vice President and Director | |
Glenn Springer | | |
47
|
| | Chief Financial Officer | |
Dennis Stogsdill | | |
49
|
| | Director | |
Timothy Daileader | | |
49
|
| | Director | |
Dr. Brian Kushner | | |
61
|
| | Director | |
| | | | Submitted by: | |
| | | |
Audit Committee of the MUDS Board,
Dennis Stogsdill Timothy Daileader Dr. Brian Kushner |
|
Mineral Resources(1)
|
| |
Gold (Oz)
|
| |
Silver (Oz)
|
| ||||||
Measured(2) | | | | | 649 | | | | | | 15,554 | | |
Indicated(2) | | | | | 3,050 | | | | | | 93,438 | | |
Inferred
|
| | | | 5,769 | | | | | | 129,754 | | |
Domain
|
| |
Nominal* Target
Oxidation, % |
| |
CN — Leach Time,
days |
| |
Au Recovery, %
|
| |
Ag Recovery, %
|
| ||||||||||||
Northwest (Bay)
|
| | | | 31 | | | | | | 60 | | | | | | 55 | | | | | | 55 | | |
West (Central)
|
| | | | 40 | | | | | | 60 | | | | | | 70 | | | | | | 70 | | |
Southwest (Camel) Above Water Table
|
| | | | 40 | | | | | | 60 | | | | | | 70 | | | | | | 70 | | |
Southwest (Camel) Below Water Table
|
| | | | 40 | | | | | | 60 | | | | | | 65 | | | | | | 70 | | |
Brimstone
|
| | | | 40 | | | | | | 60 | | | | | | 65 | | | | | | 70 | | |
Vortex
|
| | | | 40 | | | | | | 60 | | | | | | 65 | | | | | | 70 | | |
Year
|
| |
High
|
| |
Low
|
| |
Average
|
| |||||||||
2009
|
| | | | 1,213 | | | | | | 810 | | | | | | 972 | | |
2010
|
| | | | 1,421 | | | | | | 1,058 | | | | | | 1,225 | | |
2011
|
| | | | 1,895 | | | | | | 1,319 | | | | | | 1,572 | | |
2012
|
| | | | 1,792 | | | | | | 1,540 | | | | | | 1,669 | | |
2013
|
| | | | 1,694 | | | | | | 1,192 | | | | | | 1,411 | | |
2014
|
| | | | 1,385 | | | | | | 1,142 | | | | | | 1,266 | | |
2015
|
| | | | 1,296 | | | | | | 1,049 | | | | | | 1,160 | | |
2016
|
| | | | 1,366 | | | | | | 1,077 | | | | | | 1,251 | | |
2017
|
| | | | 1,346 | | | | | | 1,151 | | | | | | 1,257 | | |
2018
|
| | | | 1,355 | | | | | | 1,178 | | | | | | 1,268 | | |
2019
|
| | | | 1,540 | | | | | | 1,270 | | | | | | 1,393 | | |
2020 (through April 2, 2020)
|
| | | | 1,683 | | | | | | 1,474 | | | | | | 1,583 | | |
| | |
Tons
|
| |
Grades, oz/t
|
| |
Contained Oz (000s)
|
| |||||||||||||||||||||
| | |
(000s)
|
| |
Au
|
| |
Ag
|
| |
Au
|
| |
Ag
|
| |||||||||||||||
Proven (Heap Leach) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Oxide ROM
|
| | | | 22,476 | | | | | | 0.009 | | | | | | 0.230 | | | | | | 205 | | | | | | 5,211 | | |
Transition ROM
|
| | | | 4,095 | | | | | | 0.008 | | | | | | 0.190 | | | | | | 32 | | | | | | 759 | | |
Oxide 3∕4” Crushed
|
| | | | 15,252 | | | | | | 0.012 | | | | | | 0.720 | | | | | | 184 | | | | | | 10,926 | | |
Transition 3∕4” Crushed
|
| | | | 4,399 | | | | | | 0.005 | | | | | | 0.310 | | | | | | 24 | | | | | | 1,367 | | |
Transition 1∕2” Crushed
|
| | | | 90,206 | | | | | | 0.011 | | | | | | 0.450 | | | | | | 948 | | | | | | 40,365 | | |
Sulfide 1∕2” Crushed
|
| | | | 250,906 | | | | | | 0.012 | | | | | | 0.470 | | | | | | 2,940 | | | | | | 116,818 | | |
Total Proven Heap Leach
|
| | | | 387,334 | | | | | | 0.011 | | | | | | 0.450 | | | | | | 4,333 | | | | | | 175,446 | | |
Probable (Heap Leach) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Oxide ROM
|
| | | | 13,145 | | | | | | 0.005 | | | | | | 0.230 | | | | | | 71 | | | | | | 3,005 | | |
Transition ROM
|
| | | | 3,660 | | | | | | 0.005 | | | | | | 0.140 | | | | | | 20 | | | | | | 505 | | |
Oxide 3∕4” Crushed
|
| | | | 3,001 | | | | | | 0.010 | | | | | | 0.690 | | | | | | 29 | | | | | | 2,063 | | |
Transition 3∕4” Crushed
|
| | | | 1,304 | | | | | | 0.004 | | | | | | 0.490 | | | | | | 5 | | | | | | 644 | | |
Transition 1∕2” Crushed
|
| | | | 52,467 | | | | | | 0.010 | | | | | | 0.460 | | | | | | 504 | | | | | | 24,043 | | |
Sulfide 1∕2” Crushed
|
| | | | 663,071 | | | | | | 0.010 | | | | | | 0.410 | | | | | | 6,936 | | | | | | 272,271 | | |
Total Probable Heap Leach
|
| | | | 736,648 | | | | | | 0.010 | | | | | | 0.410 | | | | | | 7,565 | | | | | | 302,531 | | |
Total Probable Sulfide Stockpile 1∕2” Crushed
|
| | | | 9,079 | | | | | | 0.011 | | | | | | 0.380 | | | | | | 98 | | | | | | 3,422 | | |
TOTAL PROVEN & PROBABLE MINERAL RESERVES
|
| | | | 1,133,061 | | | | | | 0.011 | | | | | | 0.425 | | | | | | 11,996 | | | | | | 481,399 | | |
Waste
|
| | | | 1,321,853 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Tons
|
| | | | 2,454,914 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Strip Ratio
|
| | | | 1.17 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Process Method
|
| |
Au (opt)
|
| |
Ag (opt)
|
| ||||||
ROM Oxide Leach Recovery
|
| | | | 0.006 | | | | | | 0.938 | | |
ROM Transitional Leach Recovery
|
| | | | 0.008 | | | | | | 1.115 | | |
3/4” Crushed Oxide Leach Recovery
|
| | | | 0.005 | | | | | | 0.793 | | |
3/4” Crushed Transitional Leach Recovery
|
| | | | 0.007 | | | | | | 0.835 | | |
1/2” Crushed Transitional Leach Recovery
|
| | | | 0.006 | | | | | | 0.420 | | |
1/2” Crushed Sulfide Leach Recovery
|
| | | | 0.007 | | | | | | 0.519 | | |
| NSR | | | = | | | Net Smelter Return | |
| Au Price | | | = | | | Au selling price in $ per troy ounce | |
| Au Grade | | | = | | | Au fire grade in troy ounces per ton | |
| Recovery Au | | | = | | | % metallurgical recovery of Au by process route & domain | |
| Au Refine | | | = | | | % payable for Au refining losses and deductions | |
| Ag Price | | | = | | | Ag selling price in $ per troy ounce | |
| Ag Grade | | | = | | | Ag fire grade in troy ounces per ton | |
| Recovery Ag | | | = | | | % metallurgical recovery of Ag by process route & domain | |
| Ag Refine | | | = | | | % payable for Ag refining losses and deductions | |
| Royalty | | | = | | | % royalty (note due to very limited royalty remaining, no royalty has been included) | |
| Mine Cost | | | = | | | mining cost per ton by material type | |
| Process Cost | | | = | | | process cost per ton by process type & domain | |
| Soda Ash Cost | | | = | | | soda ash cost per ton | |
| Sustaining Cost | | | = | | | sustaining cost per ton | |
| G&A Costs | | | = | | | general and administrative cost per ton | |
| Soda Ash Cost | | | = | | | Cost of Soda Ash x Soda Ash Required | |
| Cost of Soda Ash | | | = | | | $0.11 per pound | |
| Soda Ash Required | | | = | | | % Oxidation x 2000 x%Sulfide Sulfur x 1.57 | |
| % Oxidation | | | = | | | (Target Oxidation — ratio_au) / Liberation Rate | |
| Target Oxidation | | | : | | | Bay = 55%; All Others = 70% | |
| ratio_au | | | = | | | aucn block grade / aufa block grade | |
| Liberation Rate | | | | | | if (ratio_au le 0.05) then = 1.77 | |
| | | | | | | if (ratio_au le 0.10) then = 1.89 | |
| | | | | | | if (ratio_au le 0.15) then = 1.99 | |
| | | | | | | if (ratio_au le 0.20) then = 2.09 | |
| | | | | | | if (ratio_au le 0.25) then = 2.18 | |
| | | | | | | if (ratio_au le 0.30) then = 2.27 | |
| | | | | | | if (ratio_au le 0.35) then = 2.36 | |
| | | | | | | if (ratio_au le 0.40) then = 2.44 | |
| | | | | | | if (ratio_au le 0.45) then = 2.53 | |
| | | | | | | if (ratio_au le 0.50) then = 2.60 | |
| | | | | | | if (ratio_au le 0.55) then = 2.68 | |
| | | | | | | if (ratio_au le 0.60) then = 2.70 | |
| | | | | | | if (ratio_au le 0.70) then = 2.78 | |
Classification
|
| |
Material
|
| |
Tons (kt)
|
| |
Contained Grade
|
| |
Contained Metal
|
| |||||||||||||||||||||||||||||||||
|
AuFa OPT
|
| |
AuCn OPT
|
| |
AgFa OPT
|
| |
S%
|
| |
Au (koz)
|
| |
Ag (koz)
|
| |||||||||||||||||||||||||||||
Measured Mineral Resources
|
| |
Oxide
|
| | | | 5,650 | | | | | | 0.011 | | | | | | 0.008 | | | | | | 0.224 | | | | | | 1.79 | | | | | | 60 | | | | | | 1,267 | | |
| Transition | | | | | 21,746 | | | | | | 0.011 | | | | | | 0.005 | | | | | | 0.186 | | | | | | 1.80 | | | | | | 232 | | | | | | 4,038 | | | ||
| Sulfide | | | | | 37,512 | | | | | | 0.010 | | | | | | 0.002 | | | | | | 0.273 | | | | | | 1.85 | | | | | | 356 | | | | | | 10,248 | | | ||
| | | | | | 64,908 | | | | | | 0.010 | | | | | | 0.004 | | | | | | 0.240 | | | | | | 1.83 | | | | | | 649 | | | | | | 15,554 | | | ||
Indicated Mineral Resources
|
| |
Oxide
|
| | | | 2,619 | | | | | | 0.006 | | | | | | 0.005 | | | | | | 0.229 | | | | | | 1.89 | | | | | | 17 | | | | | | 599 | | |
| Transition | | | | | 16,293 | | | | | | 0.007 | | | | | | 0.003 | | | | | | 0.329 | | | | | | 1.79 | | | | | | 117 | | | | | | 5,369 | | | ||
| Sulfide | | | | | 310,102 | | | | | | 0.009 | | | | | | 0.002 | | | | | | 0.282 | | | | | | 1.81 | | | | | | 2,916 | | | | | | 87,470 | | | ||
| | | | | | 329,014 | | | | | | 0.009 | | | | | | 0.002 | | | | | | 0.284 | | | | | | 1.81 | | | | | | 3,050 | | | | | | 93,438 | | | ||
Measured And Indicated Mineral Resources
|
| |
Oxide
|
| | | | 8,268 | | | | | | 0.009 | | | | | | 0.007 | | | | | | 0.226 | | | | | | 1.82 | | | | | | 77 | | | | | | 1,867 | | |
| Transition | | | | | 38,039 | | | | | | 0.009 | | | | | | 0.004 | | | | | | 0.247 | | | | | | 1.80 | | | | | | 349 | | | | | | 9,407 | | | ||
| Sulfide | | | | | 347,614 | | | | | | 0.009 | | | | | | 0.002 | | | | | | 0.281 | | | | | | 1.81 | | | | | | 3,272 | | | | | | 97,718 | | | ||
| | | | | | 393,922 | | | | | | 0.009 | | | | | | 0.002 | | | | | | 0.277 | | | | | | 1.81 | | | | | | 3,699 | | | | | | 108,992 | | | ||
Inferred Mineral Resources
|
| |
Oxide
|
| | | | 6,191 | | | | | | 0.007 | | | | | | 0.005 | | | | | | 0.267 | | | | | | 1.72 | | | | | | 44 | | | | | | 1,651 | | |
| Transition | | | | | 20,148 | | | | | | 0.008 | | | | | | 0.004 | | | | | | 0.276 | | | | | | 1.74 | | | | | | 156 | | | | | | 5,570 | | | ||
| Sulfide | | | | | 568,704 | | | | | | 0.010 | | | | | | 0.002 | | | | | | 0.214 | | | | | | 1.76 | | | | | | 5,516 | | | | | | 121,930 | | | ||
| Fill | | | | | 4,018 | | | | | | 0.013 | | | | | | 0.008 | | | | | | 0.150 | | | | | | 0.63 | | | | | | 53 | | | | | | 603 | | | ||
| | | | | | 599,062 | | | | | | 0.010 | | | | | | 0.002 | | | | | | 0.217 | | | | | | 1.76 | | | | | | 5,769 | | | | | | 129,754 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
(dollars in thousands,
except ounce amounts) |
| |||||||||
Gold sales
|
| | | $ | 12,803 | | | | | $ | 178 | | |
Gold ounces sold
|
| | | | 8,593 | | | | | | 145 | | |
Average realized price (per ounce)
|
| | | $ | 1,490 | | | | | $ | 1,228 | | |
| | |
2019 vs. 2018
|
| | | | |||
The change in gold sales was attributable to: | | | | | | | | | | |
Increase in ounces sold
|
| | | $ | 10,371 | | | | | |
Increase in average realized price
|
| | | | 38 | | | | | |
Effect of average realized price increase on ounces sold increase
|
| | | | 2,216 | | | | | |
Total change in gold sales
|
| | | $ | 12,625 | | | | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
(dollars in thousands, except
ounce amounts) |
| |||||||||
Silver sales
|
| | | $ | 906 | | | | | $ | 2 | | |
Silver ounces sold
|
| | | | 52,036 | | | | | | 124 | | |
Average realized price (per ounce)
|
| | | $ | 17 | | | | | $ | 16 | | |
| | |
2019 vs. 2018
|
| | | | |||
The change in silver sales was attributable to: | | | | | | | | | | |
Increase in ounces sold
|
| | | $ | 837 | | | | | |
Increase in average realized price
|
| | | | — | | | | | |
Effect of average realized price increase on ounces sold increase
|
| | | | 67 | | | | | |
Total change in silver sales
|
| | | $ | 904 | | | | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Production costs
|
| | | $ | 11,041 | | | | | $ | — | | |
Depreciation and amortization
|
| | | | 1,011 | | | | | | — | | |
Write-down of production inventories
|
| | | | 18,617 | | | | | | — | | |
Total cost of sales
|
| | | $ | 30,669 | | | | | $ | — | | |
|
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash
|
| | | $ | 6,220 | | | | | $ | 9,138 | | |
Metal inventories(1)
|
| | | | 1,894 | | | | | | 478 | | |
Ore on leach pads(2)
|
| | | | 22,062 | | | | | | — | | |
Total liquidity sources
|
| | | $ | 30,176 | | | | | $ | 9,616 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
| | |
(dollars in thousands)
|
| |||||||||
Net loss
|
| | | $ | (98,895) | | | | | $ | (55,803) | | |
Net non-cash adjustments
|
| | | | 75,393 | | | | | | 26,059 | | |
Net change in operating assets and liabilities
|
| | | | (36,269) | | | | | | 2,819 | | |
Net cash used in operating activities
|
| | | | (59,771) | | | | | | (26,925) | | |
Net cash used in investing activities
|
| | | | (12,296) | | | | | | (1,146) | | |
Net cash provided by financing activities
|
| | | | 68,173 | | | | | | 27,595 | | |
Net decrease in cash
|
| | | | (3,894) | | | | | | (476) | | |
Cash, beginning of period
|
| | | | 52,861 | | | | | | 53,337 | | |
Cash, end of period
|
| | | $ | 48,967 | | | | | $ | 52,861 | | |
| | | | | | | | |
Payments Due by Period
|
| |||||||||||||||||||||
| | |
Total
|
| |
Less than
1 Year |
| |
1 – 3 Years
|
| |
3 – 5 Years
|
| |
More than
5 Years |
| |||||||||||||||
| | |
(dollars in thousands)
|
| |||||||||||||||||||||||||||
Operating activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest related to debt(1)
|
| | | $ | 15,086 | | | | | $ | 15,086 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Remediation and reclamation expenditures(2)
|
| | | | 62,213 | | | | | | — | | | | | | — | | | | | | — | | | | | | 62,213 | | |
Financing activities
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Repayments of debt principal(3)
|
| | | | 554,914 | | | | | | 554,914 | | | | | | — | | | | | | — | | | | | | — | | |
Repayment of pay-in-kind interest(4)
|
| | | | 32,514 | | | | | | 32,514 | | | | | | — | | | | | | — | | | | | | — | | |
| | | | $ | 664,727 | | | | | $ | 602,514 | | | | | $ | — | | | | | $ | — | | | | | $ | 62,213 | | |
Name
|
| |
Age
|
| |
Position
|
|
Randy Buffington | | |
60
|
| | Chairman of the Board of Directors, President and Chief Executive Officer | |
John Ellis | | |
84
|
| | Director | |
Michael Harrison | | |
48
|
| | Director | |
David Kirsch | | |
40
|
| | Director | |
Jacob Mercer | | |
45
|
| | Director | |
Jonathan Segal | | |
38
|
| | Director | |
Stephen M. Jones | | |
61
|
| | Executive Vice President, Chief Financial Officer and Secretary | |
Name and Principal Position
|
| |
Year
|
| |
Salary ($)
|
| |
Bonus ($)
|
| |
Stock
Awards(1) ($) |
| |
Non-Equity
Incentive Plan Compensation(2) ($) |
| |
All Other
Compensation(3) ($) |
| |
Total ($)
|
| |||||||||||||||||||||
Randy E. Buffington
|
| | | | 2019 | | | | | $ | 525,000 | | | | | $ | — | | | | | $ | 1,575,000 | | | | | $ | n/a(4) | | | | | $ | 22,438 | | | | | $ | 2,122,438 | | |
President and CEO
|
| | | | 2018 | | | | | $ | 525,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 150,000 | | | | | $ | 21,344 | | | | | $ | 696,344 | | |
| | | | | 2017 | | | | | $ | 525,000 | | | | | $ | 75,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 21,344 | | | | | $ | 621,344 | | |
Stephen M. Jones
|
| | | | 2019 | | | | | $ | 425,000 | | | | | $ | | | | | $ | 1,062,500 | | | | | $ | n/a(4) | | | | | $ | 23,628 | | | | | $ | 1,511,128 | | | |
Executive Vice President,
|
| | | | 2018 | | | | | $ | 425,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 100,000 | | | | | $ | 43,666 | | | | | $ | 568,666 | | |
CFO and Secretary
|
| | | | 2017 | | | | | $ | 425,000 | | | | | $ | 50,000 | | | | | $ | — | | | | | | — | | | | | $ | 21,344 | | | | | $ | 496,344 | | |
Name
|
| |
Year
|
| |
401K Plan
Matching Contributions ($) |
| |
Life Insurance
Premiums ($) |
| |
Moving
Expenses ($) |
| |
Total ($)
|
| |||||||||||||||
Randy E. Buffington
|
| | | | 2019 | | | | | $ | 16,800 | | | | | $ | 5,638 | | | | | | — | | | | | $ | 22,438 | | |
| | | | | 2018 | | | | | $ | 16,500 | | | | | $ | 4,844 | | | | | | — | | | | | $ | 21,344 | | |
| | | | | 2017 | | | | | $ | 16,500 | | | | | $ | 4,844 | | | | | | — | | | | | $ | 21,344 | | |
Stephen M. Jones
|
| | | | 2019 | | | | | $ | 16,800 | | | | | $ | 6,828 | | | | | | — | | | | | $ | 23,628 | | |
| | | | | 2018 | | | | | $ | 16,500 | | | | | $ | 4,844 | | | | | | 22,322 | | | | | $ | 43,666 | | |
| | | | | 2017 | | | | | $ | 16,500 | | | | | $ | 4,844 | | | | | | — | | | | | $ | 21,244 | | |
Name
|
| |
Grant
Date |
| |
Stock Awards
|
| |||||||||
|
Equity Incentive
Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) |
| |
Equity Incentive
Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) |
| |||||||||||
Randy E. Buffington
|
| |
February 20, 2019
|
| | | | —(1) | | | | | $ | 1,575,000 | | |
Stephen M. Jones
|
| |
February 20, 2019
|
| | | | —(1) | | | | | $ | 1,062,500 | | |
Name
|
| |
Fees Earned or
Paid in Cash ($) |
| |
Phantom Stock
Awards ($) |
| |
Total ($)
|
| |||||||||
John Ellis
|
| | | $ | 50,000 | | | | | $ | 75,000 | | | | | $ | 125,000 | | |
Michael Harrison
|
| | | $ | 50,000 | | | | | $ | 75,000 | | | | | $ | 125,000 | | |
David Kirsch
|
| | | $ | — | | | | | $ | 125,000 | | | | | $ | 125,000 | | |
Jacob Mercer
|
| | | $ | — | | | | | $ | 125,000 | | | | | $ | 125,000 | | |
Jonathan Segal
|
| | | $ | — | | | | | $ | 125,000 | | | | | $ | 125,000 | | |
Prepayment Date
|
| |
Percentage of Principal
Amount Outstanding |
| |||
Prior to 2nd anniversary of initial advance date
|
| | | | 5.0% | | |
After 2nd anniversary but prior to 4th anniversary of initial advance date
|
| | | | 3.0% | | |
| | |
First Lien Notes
|
| |
1.5 Lien Notes
|
| |
Second Lien Convertible Notes
|
| |
1.25 Lien Notes
|
| ||||||||||||||||||||||||||||||||||||||||||
Transaction Date
|
| |
Funding
|
| |
Repayments
|
| |
Interest
Earned |
| |
Funding
|
| |
PIK
Interest |
| |
Funding
|
| |
PIK
Interest |
| |
Funding
|
| |
PIK
Interest |
| |||||||||||||||||||||||||||
| | | | | | | | |
(dollars in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Aristeia | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
2015
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 10,795 | | | | | $ | 306 | | | | | $ | — | | | | | $ | — | | |
2016
|
| | | | — | | | | | | — | | | | | | — | | | | | | 2,826 | | | | | | 166 | | | | | | 1,028 | | | | | | 1,924 | | | | | | — | | | | | | — | | |
2017
|
| | | | 3,506 | | | | | | — | | | | | | 143 | | | | | | 4,423 | | | | | | 810 | | | | | | — | | | | | | 2,230 | | | | | | — | | | | | | — | | |
2018
|
| | | | 809 | | | | | | — | | | | | | 300 | | | | | | 3,020 | | | | | | 1,513 | | | | | | — | | | | | | 2,583 | | | | | | — | | | | | | — | | |
2019
|
| | | | 1,618 | | | | | | | | | | | | 410 | | | | | | — | | | | | | 2,026 | | | | | | — | | | | | | 2,993 | | | | | | 7,767 | | | | | | 562 | | |
2020
|
| | | | — | | | | | | — | | | | | | 136 | | | | | | — | | | | | | 554 | | | | | | — | | | | | | 820 | | | | | | 2,697 | | | | | | 365 | | |
March 31, 2020 Balance
|
| | | $ | 5,933 | | | | | $ | — | | | | | $ | 988 | | | | | $ | 10,269 | | | | | $ | 5,069 | | | | | $ | 11,823 | | | | | $ | 10,856 | | | | | $ | 10,463 | | | | | $ | 927 | | |
Highbridge | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2015
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 15,981 | | | | | $ | 453 | | | | | $ | — | | | | | $ | — | | |
2016
|
| | | | — | | | | | | — | | | | | | — | | | | | | 4,196 | | | | | | 246 | | | | | | 1,575 | | | | | | 2,857 | | | | | | — | | | | | | — | | |
2017
|
| | | | 7,002 | | | | | | — | | | | | | 302 | | | | | | 6,567 | | | | | | 1,203 | | | | | | — | | | | | | 3,311 | | | | | | — | | | | | | — | | |
2018
|
| | | | 4,751 | | | | | | — | | | | | | 854 | | | | | | 4,485 | | | | | | 2,246 | | | | | | — | | | | | | 3,836 | | | | | | — | | | | | | — | | |
2019
|
| | | | 2,402 | | | | | | | | | | | | 1,036 | | | | | | — | | | | | | 3,008 | | | | | | — | | | | | | 4,444 | | | | | | 11,532 | | | | | | 835 | | |
2020
|
| | | | — | | | | | | — | | | | | | 324 | | | | | | — | | | | | | 823 | | | | | | — | | | | | | 1,217 | | | | | | 4,004 | | | | | | 541 | | |
March 31, 2020 Balance
|
| | | $ | 14,156 | | | | | $ | — | | | | | $ | 2,516 | | | | | $ | 15,248 | | | | | $ | 7,526 | | | | | $ | 17,557 | | | | | $ | 16,118 | | | | | $ | 15,536 | | | | | $ | 1,376 | | |
Mudrick | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2015
|
| | | $ | 25,492 | | | | | $ | — | | | | | $ | 289 | | | | | $ | — | | | | | $ | — | | | | | $ | 39,257 | | | | | $ | 1,112 | | | | | $ | — | | | | | $ | — | | |
2016
|
| | | | — | | | | | | (251) | | | | | | 1,568 | | | | | | 10,447 | | | | | | 612 | | | | | | 4,467 | | | | | | 7,113 | | | | | | — | | | | | | — | | |
2017
|
| | | | 11,177 | | | | | | — | | | | | | 2,155 | | | | | | 16,348 | | | | | | 2,995 | | | | | | — | | | | | | 8,242 | | | | | | — | | | | | | — | | |
2018
|
| | | | 2,991 | | | | | | (3,550) | | | | | | 2,631 | | | | | | 11,165 | | | | | | 5,591 | | | | | | — | | | | | | 9,549 | | | | | | — | | | | | | — | | |
2019
|
| | | | 5,981 | | | | | | | | | | | | 3,106 | | | | | | — | | | | | | 7,488 | | | | | | — | | | | | | 11,064 | | | | | | 28,709 | | | | | | 2,078 | | |
2020
|
| | | | — | | | | | | — | | | | | | 957 | | | | | | — | | | | | | 2,049 | | | | | | — | | | | | | 3,030 | | | | | | 9,968 | | | | | | 1,348 | | |
March 31, 2020 Balance
|
| | | $ | 45,641 | | | | | $ | (3,801) | | | | | $ | 10,706 | | | | | $ | 37,960 | | | | | $ | 18,736 | | | | | $ | 43,724 | | | | | $ | 40,111 | | | | | $ | 38,677 | | | | | $ | 3,426 | | |
Whitebox | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2015
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 28,032 | | | | | $ | 794 | | | | | $ | — | | | | | $ | — | | |
2016
|
| | | | — | | | | | | — | | | | | | — | | | | | | 7,360 | | | | | | 431 | | | | | | 2,763 | | | | | | 5,012 | | | | | | — | | | | | | — | | |
2017
|
| | | | 9,115 | | | | | | — | | | | | | 371 | | | | | | 11,518 | | | | | | 2,110 | | | | | | — | | | | | | 5,807 | | | | | | — | | | | | | — | | |
2018
|
| | | | 2,107 | | | | | | — | | | | | | 780 | | | | | | 7,866 | | | | | | 3,939 | | | | | | — | | | | | | 6,728 | | | | | | — | | | | | | — | | |
2019
|
| | | | 4,214 | | | | | | | | | | | | 1,067 | | | | | | — | | | | | | 5,276 | | | | | | — | | | | | | 7,795 | | | | | | 20,227 | | | | | | 1,464 | | |
2020
|
| | | | — | | | | | | — | | | | | | 353 | | | | | | — | | | | | | 1,444 | | | | | | — | | | | | | 2,135 | | | | | | 7,023 | | | | | | 950 | | |
March 31, 2020 Balance
|
| | | $ | 15,436 | | | | | $ | — | | | | | $ | 2,571 | | | | | $ | 26,744 | | | | | $ | 13,201 | | | | | $ | 30,795 | | | | | $ | 28,271 | | | | | $ | 27,250 | | | | | $ | 2,414 | | |
Wolverine | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2015
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5,719 | | | | | $ | 162 | | | | | $ | — | | | | | $ | — | | |
2016
|
| | | | — | | | | | | — | | | | | | — | | | | | | 1,370 | | | | | | 80 | | | | | | — | | | | | | 933 | | | | | | — | | | | | | — | | |
2017
|
| | | | 1,700 | | | | | | — | | | | | | 69 | | | | | | 2,144 | | | | | | 393 | | | | | | — | | | | | | 1,081 | | | | | | — | | | | | | — | | |
2018
|
| | | | 392 | | | | | | — | | | | | | 145 | | | | | | 1,464 | | | | | | 733 | | | | | | — | | | | | | 1,253 | | | | | | — | | | | | | — | | |
2019
|
| | | | 785 | | | | | | | | | | | | 199 | | | | | | — | | | | | | 982 | | | | | | — | | | | | | 1,451 | | | | | | 3,766 | | | | | | 273 | | |
2020
|
| | | | — | | | | | | — | | | | | | 66 | | | | | | — | | | | | | 269 | | | | | | — | | | | | | 397 | | | | | | 1,308 | | | | | | 77 | | |
March 31, 2020 Balance
|
| | | $ | 2,877 | | | | | $ | — | | | | | $ | 479 | | | | | $ | 4,979 | | | | | $ | 2,458 | | | | | $ | 5,719 | | | | | $ | 5,278 | | | | | $ | 5,073 | | | | | $ | 449 | | |
| | | | | | | | | | | | | | |
After the Business Combination
|
| |||||||||||||||||||||
| | |
Before the Business
Combination(1) |
| |
No redemption
|
| |
With maximum redemption
|
| |||||||||||||||||||||||||||
Beneficial owners(2)
|
| |
Number of
Shares |
| |
% owned
|
| |
Number of Shares
|
| |
% owned
|
| |
Number of Shares
|
| |
% owned
|
| ||||||||||||||||||
Mudrick Capital Acquisition Holdings LLC(3)
|
| | | | 5,200,000 | | | | | | 42.9% | | | | | | 6,383,333 | | | | | | 12.8% | | | | | | 4,740,384 | | | | | | 9.5% | | |
Jason Mudrick(3)(9)
|
| | | | 5,200,000 | | | | | | 42.9% | | | | | | 20,024,050 | | | | | | 40.0% | | | | | | 21,478,010 | | | | | | 42.9% | | |
Victor Danh(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
David Kirsch(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Glenn Springer(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dennis Stogsdill(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Timothy Daileader(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Dr. Brian Kushner(4)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
All directors and executive
officers of MUDS as a group (7 individuals) |
| | | | 5,200,000 | | | | | | 42.9% | | | | | | 20,024,050 | | | | | | 40% | | | | | | 21,478,010 | | | | | | 42.9% | | |
Glazer Capital, LLC(5)
|
| | | | 2,001,857 | | | | | | 16.5% | | | | | | 2,001,857 | | | | | | 4.0% | | | | | | 0 | | | | | | 0% | | |
Bank of Montreal(6)
|
| | | | 1,150,000 | | | | | | 9.5% | | | | | | 1,150,000 | | | | | | 2.3% | | | | | | 0 | | | | | | 0% | | |
Karpus Investment Management(7)
|
| | | | 1,245,345 | | | | | | 10.3% | | | | | | 1,245,345 | | | | | | 2.5% | | | | | | 0 | | | | | | 0% | | |
Weiss Asset Management LP(8)
|
| | | | 940,199 | | | | | | 7.8% | | | | | | 940,199 | | | | | | 1.9% | | | | | | 0 | | | | | | 0% | | |
Mudrick Capital Management
L.P. and affiliated entities(9) |
| | | | — | | | | | | — | | | | | | 13,640,717 | | | | | | 27.3% | | | | | | 16,737,626 | | | | | | 33.4% | | |
Whitebox Advisors and affiliated entities(10)
|
| | | | — | | | | | | — | | | | | | 9,615,093 | | | | | | 19.2% | | | | | | 11,797,515 | | | | | | 23.6% | | |
Highbridge Capital Management LLC and affiliated entities(11)
|
| | | | — | | | | | | — | | | | | | 5,490,995 | | | | | | 11.0% | | | | | | 6,736,195 | | | | | | 13.5% | | |
Aristeia Capital, LLC and affiliated entities(12)
|
| | | | — | | | | | | — | | | | | | 3,684,606 | | | | | | 7.4% | | | | | | 4,521,788 | | | | | | 9.0% | | |
Wolverine Asset Management,
LLC and affiliated entities(13) |
| | | | — | | | | | | — | | | | | | 1,787,954 | | | | | | 3.6% | | | | | | 2,194,036 | | | | | | 4.4% | | |
Randy Buffington
|
| | | | — | | | | | | — | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | |
Stephen M. Jones
|
| | | | — | | | | | | — | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | |
All directors and executive
officers of HYMC as a group ([•] individuals) |
| | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | |
Total Shares
|
| | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | | | | | [•] | | |
| | | | | | | | |
Q2
2019 |
| |
Q3
2019 |
| |
Q4
2019 |
| |
Q1
2020 |
| ||||||||||||
Public unit
|
| | | | High | | | | | $ | 10.65 | | | | | $ | 10.85 | | | | | $ | 10.85 | | | | | $ | 13.49 | | |
| | | | | Low | | | | | $ | 10.45 | | | | | $ | 10.35 | | | | | $ | 10.63 | | | | | $ | 10.35 | | |
MUDS Class A common stock
|
| | | | High | | | | | $ | 10.20 | | | | | $ | 10.29 | | | | | $ | 10.34 | | | | | $ | 10.41 | | |
| | | | | Low | | | | | $ | 10.04 | | | | | $ | 10.17 | | | | | $ | 10.18 | | | | | $ | 9.80 | | |
MUDS Public Warrant
|
| | | | High | | | | | $ | 0.56 | | | | | $ | 2.19 | | | | | $ | 0.65 | | | | | $ | 0.35 | | |
| | | | | Low | | | | | $ | 0.40 | | | | | $ | 0.43 | | | | | $ | 0.45 | | | | | $ | 0.30 | | |
| | |
Existing Charter
|
| |
Proposed Charter
|
|
Number of Authorized Shares
(Proposal No. 2) |
| |
The existing charter provides that the total number of authorized shares of all classes of capital stock is 111,000,000 shares, consisting of (a) 110,000,000 shares of common stock, including (i) 100,000,000 shares of Class A common stock and (ii) 10,000,000 shares of Class B common stock, and (b) 1,000,000 shares of preferred stock.
See Section 4.1 of the existing charter.
|
| |
The proposed charter increases the total number of authorized shares of all classes of capital stock to 410,000,000, consisting of (a) 400,000,000 shares of Class A common stock and (b) 10,000,000 shares of preferred stock. The post-business combination company will not have Class B common stock.
See Section 4.1 of the proposed charter.
|
|
Board Declassification
(Proposal No. 3) |
| |
The existing charter requires that the board of directors be divided into three classes, with only one class of directors being elected each year and members of each class (except for those directors appointed prior to MUDS’ first annual meeting of stockholders) serving a three-year term.
See Article V of the existing charter.
|
| |
The proposed charter provides for annual board elections for all directors. Directors elected will hold office until the next annual meeting of stockholders.
See Article V of the proposed charter.
|
|
Corporate Opportunities
(Proposal No. 4) |
| | The existing charter provides that the “corporate opportunities” doctrine shall apply to any of the directors or officers, but only with respect to such opportunities that (i) the company is legally and contractually permitted to undertake and would otherwise be reasonable for the company to pursue and (ii) the director or | | | The proposed charter provides that certain transactions would not be considered “corporate opportunities” and that each Exempted Person (which shall include Mudrick Capital, Highbridge, Whitebox, Aristeia, Wolverine and their respective affiliates, directors and officers) is not subject to the doctrine of | |
|
Legal
|
| | | $ | [•] | | |
|
Consultants
|
| | | | [•] | | |
|
IT support
|
| | | | [•] | | |
|
Accounting fees
|
| | | | [•] | | |
|
Insurance
|
| | | | [•] | | |
|
Final payroll and related tax
|
| | | | [•] | | |
|
General operating
|
| | | | [•] | | |
| | | | | $ | [•] | | |
|
MUDRICK CAPITAL ACQUISITION CORPORATION — AUDITED FINANCIAL STATEMENTS
|
| | | | | | |
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | | |
|
HYCROFT MINING CORPORATION — AUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
| | | | | | |
| | | | | F-21 | | | |
| | | | | F-22 | | | |
| | | | | F-23 | | | |
| | | | | F-24 | | | |
| | | | | F-25 | | | |
| | | | | F-26 | | |
| | |
December 31,
2019 |
| |
December 31,
2018 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 208,536 | | | | | $ | 535,946 | | |
Prepaid income taxes
|
| | | | 95,275 | | | | | | — | | |
Prepaid expenses
|
| | | | 3,966 | | | | | | 52,295 | | |
Total Current Assets
|
| | | | 307,777 | | | | | | 588,241 | | |
Investments held in Trust Account
|
| | | | 215,385,757 | | | | | | 212,916,691 | | |
TOTAL ASSETS
|
| | | $ | 215,693,534 | | | | | $ | 213,504,932 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | | |
Accounts payable and accrued expenses
|
| | | $ | 334,619 | | | | | $ | 201,392 | | |
Income taxes payable
|
| | | | — | | | | | | 555,449 | | |
Total Current Liabilities
|
| | | | 334,619 | | | | | | 756,841 | | |
Deferred underwriting fees
|
| | | | 7,280,000 | | | | | | 7,280,000 | | |
Total Liabilities
|
| | | | 7,614,619 | | | | | | 8,036,841 | | |
Commitments and Contingencies | | | | | | | | | | | | | |
Common stock subject to possible redemption, $0.0001 par value; 20,106,823 and 19,848,325 shares as of December 31, 2019 and 2018, respectively (at redemption value of $10.10 per share)
|
| | | | 203,078,914 | | | | | | 200,468,083 | | |
Stockholders’ Equity: | | | | | | | | | | | | | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding as of December 31, 2019 and 2018
|
| | | | — | | | | | | — | | |
Class A Common stock, $0.0001 par value; 100,000,000 shares authorized;
693,177 and 951,675 shares issued and outstanding (excluding 20,106,823 and 19,848,325 shares subject to possible redemption) as of December 31, 2019 and 2018, respectively |
| | | | 69 | | | | | | 95 | | |
Class B Common stock, $0.0001 par value; 10,000,000 shares authorized; 5,200,000 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
| | | | 520 | | | | | | 520 | | |
Additional paid-in capital
|
| | | | 711,409 | | | | | | 3,322,214 | | |
Retained earnings
|
| | | | 4,288,003 | | | | | | 1,677,179 | | |
Total Stockholders’ Equity
|
| | | | 5,000,001 | | | | | | 5,000,008 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | $ | 215,693,534 | | | | | $ | 213,504,932 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
General and administrative expenses
|
| | | $ | 875,900 | | | | | $ | 609,581 | | |
Loss from operations
|
| | | | (875,900) | | | | | | (609,581) | | |
Other income: | | | | | | | | | | | | | |
Interest income
|
| | | | 6,634 | | | | | | 8,302 | | |
Interest earned on marketable securities held in Trust Account
|
| | | | 4,379,894 | | | | | | 2,836,691 | | |
Other income
|
| | | | 4,386,528 | | | | | | 2,844,993 | | |
Income before provision for income taxes
|
| | | | 3,510,628 | | | | | | 2,235,412 | | |
Provision for income taxes
|
| | | | (899,804) | | | | | | (555,449) | | |
Net income
|
| | | $ | 2,610,824 | | | | | $ | 1,679,963 | | |
Weighted average shares outstanding of Class A common stock
|
| | | | 20,800,000 | | | | | | 20,800,000 | | |
Basic and diluted income per common share, Class A
|
| | | $ | 0.16 | | | | | $ | 0.10 | | |
Weighted average shares outstanding of Class B common stock
|
| | | | 5,200,000 | | | | | | 5,200,000 | | |
Basic and diluted loss per common share, Class B
|
| | | $ | (0.13) | | | | | $ | (0.08) | | |
| | |
Class A
Common Stock |
| |
Class B
Common Stock |
| |
Additional
Paid-in Capital |
| |
Retained
Earnings |
| |
Total
Stockholders’ Equity |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balance – December 31, 2017
|
| | | | — | | | | | $ | — | | | | | | 5,750,000 | | | | | $ | 575 | | | | | $ | 24,425 | | | | | $ | (2,784) | | | | | $ | 22,216 | | |
Sale of 20,800,000 Units, net of
underwriting discounts and offering expenses |
| | | | 20,800,000 | | | | | | 2,080 | | | | |
|
—
|
| | | |
|
—
|
| | | | | 196,023,832 | | | | |
|
—
|
| | | | | 196,025,912 | | |
Sale of 7,740,000 Private Placement Warrants
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | 7,740,000 | | | | |
|
—
|
| | | | | 7,740,000 | | |
Forfeiture of founder shares
|
| | |
|
—
|
| | | | | — | | | | | | (550,000) | | | | | | (55) | | | | | | 55 | | | | |
|
—
|
| | | |
|
—
|
| |
Common stock subject to possible redemption
|
| | | | (19,848,325) | | | | | | (1,985) | | | | |
|
—
|
| | | |
|
—
|
| | | | | (200,466,098) | | | | |
|
—
|
| | | | | (200,468,083) | | |
Net income
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | 1,679,963 | | | | | | 1,679,963 | | |
Balance – December 31, 2018
|
| | | | 951,675 | | | | | | 95 | | | | | | 5,200,000 | | | | | | 520 | | | | | | 3,322,214 | | | | | | 1,677,179 | | | | | | 5,000,008 | | |
Change in value of common stock subject to possible redemption
|
| | | | (258,498) | | | | | | (26) | | | | |
|
—
|
| | | |
|
—
|
| | | | | (2,610,805) | | | | |
|
—
|
| | | | | (2,610,831) | | |
Net income
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | | | 2,610,824 | | | | | | 2,610,824 | | |
Balance – December 31, 2019
|
| | | | 693,177 | | | | | $ | 69 | | | | | | 5,200,000 | | | | | $ | 520 | | | | | $ | 711,409 | | | | | $ | 4,288,003 | | | | | $ | 5,000,001 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash Flows from Operating Activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 2,610,824 | | | | | $ | 1,679,963 | | |
Adjustments to reconcile net income to net cash used in operating activities:
|
| | | | | | | | | | | | |
Interest earned on marketable securities held in Trust Account
|
| | | | (4,379,894) | | | | | | (2,836,691) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Prepaid income taxes
|
| | | | (95,275) | | | | | | — | | |
Prepaid expenses
|
| | | | 48,329 | | | | | | (52,295) | | |
Accounts payable and accrued expenses
|
| | | | 133,227 | | | | | | 200,859 | | |
Income taxes payable
|
| | | | (555,449) | | | | | | 555,449 | | |
Net cash used in operating activities
|
| | | | (2,238,238) | | | | | | (452,715) | | |
Cash Flows from Investing Activities: | | | | | | | | | | | | | |
Cash withdrawn from Trust Account to pay franchise and income taxes
|
| | | | 1,910,828 | | | | | | — | | |
Investment of cash in Trust Account
|
| | | | — | | | | | | (210,080,000) | | |
Net cash provided by (used in) investing activities
|
| | | | 1,910,828 | | | | | | (210,080,000) | | |
Cash Flows from Financing Activities: | | | | | | | | | | | | | |
Proceeds from sale of Units, net of underwriting fees paid
|
| | | | — | | | | | | 203,840,000 | | |
Proceeds from sale of Private Placement Warrants
|
| | | | — | | | | | | 7,740,000 | | |
Repayment of promissory note – related party
|
| | | | — | | | | | | (242,331) | | |
Payment of offering costs
|
| | | | — | | | | | | (293,953) | | |
Net cash provided by financing activities
|
| | | | — | | | | |
|
211,043,716
|
| |
Net Change in Cash
|
| | | | (327,410) | | | | | | 511,001 | | |
Cash – Beginning of period
|
| | | | 535,946 | | | | | | 24,945 | | |
Cash – End of period
|
| | | $ | 208,536 | | | | | $ | 535,946 | | |
Supplementary cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 1,550,528 | | | | | $ | — | | |
Non-Cash investing and financing activities: | | | | | | | | | | | | | |
Initial classification of common stock subject to possible redemption
|
| | | $ | — | | | | | $ | 198,787,536 | | |
Change in value of common stock subject to possible redemption
|
| | | $ | 2,610,831 | | | | | $ | 1,680,547 | | |
Deferred underwriting fees charged to additional paid in capital
|
| | | $ | — | | | | | $ | 7,280,000 | | |
Payment of deferred offering costs and expenses by Sponsor
|
| | | $ | — | | | | | $ | 240,135 | | |
| | |
Year Ended
December 31, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||
Redeemable Common Stock | | | | | | | | | | | | | |
Numerator: Earnings allocable to Redeemable Common Stock
|
| | | | | | | | | | | | |
Interest Income
|
| | | $ | 4,379,894 | | | | | $ | 2,836,691 | | |
Income and Franchise Tax
|
| | | $ | (1,099,904) | | | | | $ | (744,449) | | |
Net Earnings
|
| | | $ | 3,279,990 | | | | | $ | 2,081,242 | | |
Denominator: Weighted Average Redeemable Common Stock
|
| | | | | | | | | | | | |
Redeemable Common Stock, Basic and Diluted
|
| | | | 20,800,000 | | | | | | 20,800,000 | | |
Earnings/Basic and Diluted Redeemable Common Stock
|
| | | $ | 0.16 | | | | | $ | 0.10 | | |
Non-Redeemable Common Stock | | | | | | | | | | | | | |
Numerator: Net Loss minus Redeemable Net Earnings
|
| | | | | | | | | | | | |
Net Income
|
| | | $ | 2,610,824 | | | | | $ | 1,679,963 | | |
Redeemable Net Earnings
|
| | | $ | (3,279,990) | | | | | $ | (2,081,242) | | |
Non-Redeemable Net Loss
|
| | | $ | (669,166) | | | | | $ | (401,279) | | |
Denominator: Weighted Average Non-Redeemable Common Stock
|
| | | | | | | | | | | | |
Non-Redeemable Common Stock, Basic and Diluted (1)
|
| | | | 5,200,000 | | | | | | 5,200,000 | | |
Loss/Basic and Diluted Non-Redeemable Common Stock
|
| | | $ | (0.13) | | | | | $ | (0.08) | | |
| | |
December 31,
2019 |
| |
December 31,
2018 |
| ||||||
Deferred tax asset | | | | | | | | | | | | | |
Organizational costs/Startup expenses
|
| | | $ | 227,930 | | | | | $ | 86,012 | | |
Total deferred tax assets
|
| | | | 227,930 | | | | | | 86,012 | | |
Valuation allowance
|
| | | | (227,930) | | | | | | (86,012) | | |
Deferred tax asset, net of allowance
|
| | | $ | — | | | | | $ | — | | |
| | |
Year Ended
December 31, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||
Federal | | | | | | | | | | | | | |
Current
|
| | | $ | 899,804 | | | | | $ | 555,449 | | |
Deferred
|
| | | | (141,918) | | | | | | (86,012) | | |
State | | | | | | | | | | | | | |
Current
|
| | | | — | | | | | | — | | |
Deferred
|
| | | | — | | | | | | — | | |
Change in valuation allowance
|
| | | | 141,918 | | | | | | 86,012 | | |
Income tax provision
|
| | | $ | 899,804 | | | | | $ | 555,449 | | |
| | |
Year Ended
December 31, 2019 |
| |
Year Ended
December 31, 2018 |
| ||||||
Statutory federal income tax rate
|
| | | | 21.0% | | | | | | 21.0% | | |
State taxes, net of federal tax benefit
|
| | | | 0.0% | | | | | | 0.0% | | |
True-ups
|
| | | | 0.6% | | | | | | 0.0% | | |
Change in valuation allowance
|
| | | | 4.0% | | | | | | 3.8% | | |
Income tax provision
|
| | | | 25.6% | | | | | | 24.8% | | |
Description
|
| |
Level
|
| |
December 31,
2019 |
| |
December 31,
2018 |
| |||||||||
Assets: | | | | | |||||||||||||||
Trust Account – U.S. Treasury Securities Money Market Fund
|
| | | | 1 | | | | | $ | 215,385,757 | | | | | $ | 212,916,691 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Assets: | | | | | | | | | | | | | |
Cash
|
| | | $ | 6,220 | | | | | $ | 9,138 | | |
Restricted cash – Note 5
|
| | | | 3,270 | | | | | | 5,030 | | |
Accounts receivable
|
| | | | 97 | | | | | | — | | |
Inventories – Note 3
|
| | | | 4,453 | | | | | | 2,060 | | |
Ore on leach pads – Note 3
|
| | | | 22,062 | | | | | | — | | |
Prepaids and other – Note 4
|
| | | | 2,648 | | | | | | 2,261 | | |
Current assets
|
| | | | 38,750 | | | | | | 18,489 | | |
Restricted cash – Note 5
|
| | | | 39,477 | | | | | | 38,693 | | |
Plant, equipment and mine development, net – Note 6
|
| | | | 51,207 | | | | | | 41,404 | | |
Other assets, non-current – Note 4
|
| | | | 5,203 | | | | | | 1,158 | | |
Total assets
|
| | | $ | 134,637 | | | | | $ | 99,744 | | |
Liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 10,746 | | | | | $ | 3,824 | | |
Interest payable
|
| | | | 846 | | | | | | 1,049 | | |
Other liabilities, current – Note 8
|
| | | | 3,939 | | | | | | 1,790 | | |
Debt, current – Notes 9 and 20
|
| | | | 553,965 | | | | | | 131,386 | | |
Current liabilities
|
| | | | 569,496 | | | | | | 138,049 | | |
Other liabilities, non-current – Note 8
|
| | | | 18 | | | | | | 18 | | |
Debt, non-current – Notes 9 and 20
|
| | | | — | | | | | | 296,201 | | |
Asset retirement obligation, non-current – Note 10
|
| | | | 4,374 | | | | | | 5,832 | | |
Total liabilities
|
| | | | 573,888 | | | | | | 440,100 | | |
Commitments and contingencies – Note 19 | | | | | | | | | | | | | |
Stockholders’ (Deficit) Equity: – Note 11 | | | | | | | | | | | | | |
Common stock, $0.001 par value; 400,000,000 shares authorized for both periods; 3,095,650 and 2,758,689 issued; and 2,897,568 and 2,598,035 outstanding at December 31, 2019 and 2018, respectively
|
| | | | 3 | | | | | | 3 | | |
Additional paid-in capital
|
| | | | 5,184 | | | | | | 5,184 | | |
Accumulated deficit
|
| | | | (444,438) | | | | | | (345,543) | | |
Total stockholders’ (deficit)
|
| | | | (439,251) | | | | | | (340,356) | | |
Total liabilities and stockholders’ (deficit)
|
| | | $ | 134,637 | | | | | $ | 99,744 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Revenues – Note 12
|
| | | $ | 13,709 | | | | | $ | — | | |
Cost of sales: | | | | | | | | | | | | | |
Production costs
|
| | | | 11,041 | | | | | | — | | |
Depreciation and amortization
|
| | | | 1,011 | | | | | | — | | |
Write-down of production inventories – Note 3
|
| | | | 18,617 | | | | | | — | | |
Total cost of sales
|
| | | | 30,669 | | | | | | — | | |
Operating expenses: | | | | | | | | | | | | | |
Project and development
|
| | | | 7,708 | | | | | | 4,916 | | |
Care and maintenance
|
| | | | 3,529 | | | | | | 8,961 | | |
Pre-production depreciation and amortization
|
| | | | 1,067 | | | | | | 3,472 | | |
Accretion – Note 10
|
| | | | 422 | | | | | | 1,271 | | |
General and administrative
|
| | | | 6,072 | | | | | | 5,342 | | |
Reduction in asset retirement obligation
|
| | | | (1,880) | | | | | | (16,987) | | |
Impairment of long-lived assets – Note 6
|
| | | | 63 | | | | | | — | | |
Write-down of supplies inventories
|
| | | | — | | | | | | 144 | | |
Write-down of mineral properties – Note 7
|
| | | | — | | | | | | 1,032 | | |
Loss from operations
|
| | | | (33,941) | | | | | | (8,151) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense, net of capitalized interest of $551 and $0, respectively – Notes 9 and 20
|
| | | | (64,844) | | | | | | (50,893) | | |
Interest income
|
| | | | 795 | | | | | | 464 | | |
Gain on retirement of debt – Note 9
|
| | | | — | | | | | | 3,321 | | |
Loss before reorganization items, net and income taxes
|
| | | | (97,990) | | | | | | (55,259) | | |
Reorganization items, net
|
| | | | (905) | | | | | | (399) | | |
Loss before income taxes
|
| | | | (98,895) | | | | | | (55,658) | | |
Income tax – Note 14
|
| | | | — | | | | | | (145) | | |
Net loss
|
| | | $ | (98,895) | | | | | $ | (55,803) | | |
Loss per share: | | | | | | | | | | | | | |
Basic – Note 15
|
| | | $ | (36.10) | | | | | $ | (21.10) | | |
Diluted – Note 15
|
| | | $ | (36.10) | | | | | $ | (21.10) | | |
Weighted average shares outstanding: | | | | | | | | | | | | | |
Basic – Note 15
|
| | | | 2,739,505 | | | | | | 2,645,194 | | |
Diluted – Note 15
|
| | | | 2,739,505 | | | | | | 2,645,194 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (98,895) | | | | | $ | (55,803) | | |
Adjustments to reconcile net loss for the period to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 2,078 | | | | | | 3,472 | | |
Accretion – Note 10
|
| | | | 422 | | | | | | 1,271 | | |
Stock-based compensation – Note 13
|
| | | | 1,102 | | | | | | — | | |
Non-cash portion of interest expense – Note 9
|
| | | | 54,810 | | | | | | 40,839 | | |
Write-down of production inventories – Note 3
|
| | | | 18,617 | | | | | | — | | |
Reduction in asset retirement obligation – Note 10
|
| | | | (1,880) | | | | | | (16,987) | | |
Change in value of phantom shares – Note 16
|
| | | | 181 | | | | | | (391) | | |
Impairment of long-lived assets – Note 6
|
| | | | 63 | | | | | | — | | |
Write-down of supplies inventories – Note 3
|
| | | | — | | | | | | 144 | | |
Write-down of mineral property – Note 7
|
| | | | — | | | | | | 1,032 | | |
Gain on retirement of debt – Note 9
|
| | | | — | | | | | | (3,321) | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (97) | | | | | | — | | |
Materials and supplies inventories
|
| | | | (977) | | | | | | (182) | | |
Production-related inventories
|
| | | | (38,627) | | | | | | (138) | | |
Prepaids and other
|
| | | | (387) | | | | | | 947 | | |
Income tax receivable
|
| | | | — | | | | | | 145 | | |
Other assets, non-current
|
| | | | (120) | | | | | | — | | |
Accounts payable
|
| | | | 3,384 | | | | | | 271 | | |
Interest payable
|
| | | | (203) | | | | | | 548 | | |
Other liabilities
|
| | | | 758 | | | | | | 1,228 | | |
Net cash used in operating activities
|
| | | | (59,771) | | | | | | (26,925) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Additions to plant and equipment
|
| | | | (12,296) | | | | | | (1,146) | | |
Net cash used in investing activities
|
| | | | (12,296) | | | | | | (1,146) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from debt issuances, net
|
| | | | 71,831 | | | | | | 27,881 | | |
Refinancing of First Lien
|
| | | | (762) | | | | | | — | | |
Refinancing issuance costs
|
| | | | (2,896) | | | | | | (133) | | |
Repayments of principal on capital lease obligations
|
| | | | — | | | | | | (47) | | |
Retirement of convertible notes – Note 11
|
| | | | — | | | | | | (106) | | |
Net cash provided by financing activities
|
| | | | 68,173 | | | | | | 27,595 | | |
Net decrease in cash
|
| | | | (3,894) | | | | | | (476) | | |
Cash, beginning of period
|
| | | | 52,861 | | | | | | 53,337 | | |
Cash, end of period
|
| | | $ | 48,967 | | | | | $ | 52,861 | | |
Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 6,220 | | | | | $ | 9,138 | | |
Restricted cash – current
|
| | | | 3,270 | | | | | | 5,030 | | |
Restricted cash – non-current
|
| | | | 39,477 | | | | | | 38,693 | | |
Total cash, cash equivalents and restricted cash
|
| | | $ | 48,967 | | | | | $ | 52,861 | | |
| | |
Common Stock
|
| |
Treasury Shares
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ (Deficit) Equity |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balance at January 1, 2018
|
| | | | 2,668,689 | | | | | $ | 3 | | | | | | 65,572 | | | | | $ | — | | | | | $ | 5,184 | | | | | $ | (289,740) | | | | | $ | (284,553) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (55,803) | | | | | | (55,803) | | |
Shares issued
|
| | | | 90,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Shares repurchased
|
| | | | — | | | | | | — | | | | | | 95,082 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance at December 31, 2018
|
| | | | 2,758,689 | | | | | | 3 | | | | | | 160,654 | | | | | | — | | | | | | 5,184 | | | | | | (345,543) | | | | | | (340,356) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (98,895) | | | | | | (98,895) | | |
Shares issued(1)
|
| | | | 336,961 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Shares repurchased
|
| | | | — | | | | | | — | | | | | | 37,428 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance at December 31, 2019
|
| | | | 3,095,650 | | | | | $ | 3 | | | | | | 198,082 | | | | | $ | — | | | | | $ | 5,184 | | | | | $ | (444,438) | | | | | $ | (439,251) | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||||||||||||||
| | |
Amount
|
| |
Gold Ounces
|
| |
Amount
|
| |
Gold Ounces
|
| ||||||||||||
Materials and supplies
|
| | | $ | 2,559 | | | | | | — | | | | | $ | 1,582 | | | | | | — | | |
Merrill-Crowe in process
|
| | | | 1,004 | | | | | | 691 | | | | | | — | | | | | | — | | |
Carbon column in-process
|
| | | | 478 | | | | | | 474 | | | | | | 478 | | | | | | 482 | | |
Doré finished goods
|
| | | | 412 | | | | | | 278 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 4,453 | | | | | | 1,443 | | | | | $ | 2,060 | | | | | | 482 | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||||||||||||||
| | |
Amount
|
| |
Gold Ounces
|
| |
Amount
|
| |
Gold Ounces
|
| ||||||||||||
Ore on leach pads
|
| | | $ | 22,062 | | | | | | 17,019 | | | | | $ | — | | | | | | — | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Prepaids and other | | | | | | | | | | | | | |
Prepaids
|
| | | $ | 2,109 | | | | | $ | 1,722 | | |
Deposits
|
| | | | 539 | | | | | | 539 | | |
Total
|
| | | $ | 2,648 | | | | | $ | 2,261 | | |
Other assets, non-current | | | | | | | | | | | | | |
Deferred future financing costs
|
| | | | 5,083 | | | | | | 1,158 | | |
Royalty – advance payment
|
| | | | 120 | | | | | | — | | |
Total
|
| | | $ | 5,203 | | | | | $ | 1,158 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
First Lien agreement restricted cash – Note 9
|
| | | | 3,270 | | | | | | 5,030 | | |
Asset retirement obligation surety bonds (collateralized obligation)
|
| | | | 39,477 | | | | | | 38,693 | | |
Total
|
| | | $ | 42,747 | | | | | $ | 43,723 | | |
|
| | |
Depreciation Life
of Method |
| |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| |||||||||
Process equipment
|
| |
5 – 13 years
|
| | | $ | 14,770 | | | | | $ | 6,759 | | |
Leach pads
|
| |
Units-of-production
|
| | | | 11,190 | | | | | | 11,190 | | |
Buildings and leasehold improvements
|
| |
10 years
|
| | | | 10,507 | | | | | | 10,507 | | |
Restart leach pads
|
| |
18 months
|
| | | | 6,229 | | | | | | — | | |
Mine equipment
|
| |
5 – 7 years
|
| | | | 4,716 | | | | | | 3,905 | | |
Vehicles
|
| |
3 – 5 years
|
| | | | 136 | | | | | | 41 | | |
Furniture and office equipment
|
| |
7 years
|
| | | | 129 | | | | | | 22 | | |
Mine development
|
| |
Units-of-production
|
| | | | 119 | | | | | | — | | |
Construction in progress and other
|
| | | | | | | 20,619 | | | | | | 20,750 | | |
| | | | | | | $ | 68,415 | | | | | $ | 53,174 | | |
Less: accumulated depreciation and amortization
|
| | | | | | | (17,208) | | | | | | (11,770) | | |
Total
|
| | | | | | $ | 51,207 | | | | | $ | 41,404 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Balance, beginning of year
|
| | | $ | — | | | | | $ | 1,093 | | |
Amortization of asset retirement cost asset
|
| | | | — | | | | | | (61) | | |
Write-down of mineral property
|
| | | | — | | | | | | (1,032) | | |
Balance, end of year
|
| | | $ | — | | | | | $ | — | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Other liabilities, current | | | | | | | | | | | | | |
Accrued compensation for phantom shares – Note 16
|
| | | $ | 1,590 | | | | | $ | 884 | | |
Restricted stock units – Note 13
|
| | | | 1,210 | | | | | | — | | |
Other accrued compensation
|
| | | | 1,139 | | | | | | 892 | | |
Other
|
| | | | — | | | | | | 14 | | |
Total
|
| | | $ | 3,939 | | | | | $ | 1,790 | | |
Other liabilities, non-current | | | | | | | | | | | | | |
Warrant liability – Notes 11 and 16
|
| | | $ | 18 | | | | | $ | 18 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Debt, current: | | | | | | | | | | | | | |
Convertible Notes
|
| | | $ | 208,411 | | | | | $ | — | | |
1.5 Lien Notes
|
| | | | 137,050 | | | | | | — | | |
First Lien Agreement
|
| | | | 125,468 | | | | | | 125,468 | | |
1.25 Lien Notes
|
| | | | 77,212 | | | | | | — | | |
Other note payable
|
| | | | 6,773 | | | | | | 5,989 | | |
Less debt issuance costs
|
| | | | (949) | | | | | | (71) | | |
Total
|
| | | $ | 553,965 | | | | | $ | 131,386 | | |
Debt, non-current: | | | | | | | | | | | | | |
Convertible Notes
|
| | | $ | — | | | | | $ | 179,874 | | |
1.5 Lien Notes
|
| | | | — | | | | | | 118,270 | | |
Less debt issuance costs
|
| | | | — | | | | | | (1,943) | | |
Total
|
| | | $ | — | | | | | $ | 296,201 | | |
Transaction Period
|
| |
Note Issuances
|
| |
Interest In-Kind
|
| |
Total
|
| |||||||||
Year ended December 31, 2016
|
| | | $ | 26,200 | | | | | $ | 1,535 | | | | | $ | 27,735 | | |
Year ended December 31, 2017
|
| | | | 41,000 | | | | | | 7,512 | | | | | | 48,512 | | |
Year ended December 31, 2018
|
| | | | 28,000 | | | | | | 14,023 | | | | | | 42,023 | | |
Year ended December 31, 2019
|
| | | | — | | | | | | 18,780 | | | | | | 18,780 | | |
Total
|
| | | $ | 95,200 | | | | | $ | 41,850 | | | | | $ | 137,050 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Second Lien Convertible Notes
|
| | | $ | 28,537 | | | | | $ | 24,923 | | |
1.5 Lien Notes
|
| | | | 18,763 | | | | | | 14,012 | | |
First Lien Agreement
|
| | | | 10,022 | | | | | | 9,589 | | |
1.25 Lien Notes
|
| | | | 5,241 | | | | | | — | | |
Amortization of debt issuance costs
|
| | | | 2,047 | | | | | | 1,802 | | |
Promissory Note
|
| | | | 785 | | | | | | 567 | | |
Capitalized interest
|
| | | | (551) | | | | | | — | | |
Total interest expense
|
| | | $ | 64,844 | | | | | $ | 50,893 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Balance, beginning of year
|
| | | $ | 5,832 | | | | | $ | 21,548 | | |
Accretion expense
|
| | | | 422 | | | | | | 1,271 | | |
Changes in estimates
|
| | | | (1,880) | | | | | | (16,987) | | |
Balance, end of year
|
| | | $ | 4,374 | | | | | $ | 5,832 | | |
| | |
Year Ended December 31,
|
| |||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Amount
|
| |
Ounces
Sold |
| |
Amount
|
| |
Ounces
Sold |
| ||||||||||||
Gold sales
|
| | | $ | 12,803 | | | | | | 8,593 | | | | | $ | 178 | | | | | | 145 | | |
Silver sales
|
| | | | 906 | | | | | | 52,036 | | | | | | 2 | | | | | | 124 | | |
Total gold and silver sales
|
| | | $ | 13,709 | | | | | | | | | | | $ | 180 | | | | | | | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Current: | | | | | | | | | | | | | |
Federal
|
| | | $ | — | | | | | $ | 145 | | |
Deferred: | | | | | | | | | | | | | |
Federal
|
| | | | (24,609) | | | | | | (18,842) | | |
Change in valuation allowance
|
| | | | 24,609 | | | | | | 18,842 | | |
Income tax benefit
|
| | | $ | — | | | | | $ | 145 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Loss before income taxes
|
| | | $ | (98,895) | | | | | $ | (55,658) | | |
United States statutory income tax rate
|
| | | | 21% | | | | | | 21% | | |
Income tax (benefit) at United States statutory income tax rate
|
| | | $ | (20,768) | | | | | $ | (11,688) | | |
Change in valuation allowance
|
| | | | 24,609 | | | | | | 18,842 | | |
Return to provision adjustment
|
| | | | (2,624) | | | | | | (7,029) | | |
Tax rate changes
|
| | | | (1,028) | | | | | | — | | |
State tax benefit
|
| | | | (195) | | | | | | — | | |
Other
|
| | | | 6 | | | | | | 20 | | |
Income tax benefit
|
| | | $ | — | | | | | $ | 145 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net operating loss
|
| | | $ | 146,382 | | | | | $ | 126,143 | | |
Plant, equipment, and mine development
|
| | | | 60,840 | | | | | | 65,760 | | |
Interest expense carryforward
|
| | | | 24,369 | | | | | | 10,590 | | |
Inventories
|
| | | | 12,289 | | | | | | 17,163 | | |
Reorganization costs
|
| | | | 7,701 | | | | | | 7,437 | | |
Assets held-for-sale
|
| | | | 3,149 | | | | | | 3,106 | | |
Asset retirement obligation
|
| | | | 927 | | | | | | 1,225 | | |
Other liabilities
|
| | | | 609 | | | | | | 490 | | |
Stock-based compensation
|
| | | | 257 | | | | | | — | | |
Credits and other
|
| | | | (6) | | | | | | (6) | | |
Valuation allowance
|
| | | | (256,517) | | | | | | (231,908) | | |
Total net deferred tax assets
|
| | | $ | — | | | | | $ | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net loss
|
| | | $ | (98,895) | | | | | $ | (55,803) | | |
Weighted average shares outstanding | | | | | | | | | | | | | |
Basic
|
| | | | 2,739,505 | | | | | | 2,645,194 | | |
Diluted
|
| | | | 2,739,505 | | | | | | 2,645,194 | | |
Basic earnings per common share
|
| | | $ | (36.10) | | | | | $ | (21.10) | | |
Diluted earnings per common share
|
| | | $ | (36.10) | | | | | $ | (21.10) | | |
| | |
Hierarchy
Level |
| |
December 31,
|
| ||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||
Liabilities | | | | | | | | | | | | | | | |||||
Accrued compensation for phantom shares
|
| | | | 3 | | | | | $ | 1,590 | | | | | $ | 884 | | |
Derivative instruments:
|
| | | | | | | | | | | | | | | | | | |
Warrant liability – Note 11
|
| | | | 2 | | | | | $ | 18 | | | | | $ | 18 | | |
| | |
December 31, 2019
|
| |
December 31, 2018
|
| ||||||||||||||||||
| | |
Carrying
Amount |
| |
Fair Value
|
| |
Carrying
Amount |
| |
Fair Value
|
| ||||||||||||
Total current and non-current debt
|
| | | $ | 553,965 | | | | | $ | 471,890 | | | | | $ | 427,587 | | | | | $ | 350,000 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash paid for interest
|
| | | $ | 10,239 | | | | | $ | 9,409 | | |
Significant non-cash financing and investing activities: | | | | | | | | | | | | | |
Increase in Second Lien convertible notes from in-kind interest
|
| | | $ | 28,537 | | | | | $ | 24,869 | | |
Increase in 1.5 Lien Notes from in-kind interest
|
| | | $ | 18,780 | | | | | $ | 14,023 | | |
Increase in 1.25 Lien Notes from in-kind interest
|
| | | $ | 5,212 | | | | | $ | — | | |
Increase in the Promissory Note from in-kind interest
|
| | | $ | 785 | | | | | $ | 117 | | |
Accrual of deferred future financing costs
|
| | | $ | 1,029 | | | | | $ | 1,025 | | |
Plant and equipment additions
|
| | | $ | 2,458 | | | | | $ | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Aristeia
|
| | | $ | 5,993 | | | | | $ | 4,394 | | |
Highbridge
|
| | | | 9,325 | | | | | | 6,934 | | |
Mudrick
|
| | | | 23,743 | | | | | | 17,766 | | |
Whitebox
|
| | | | 15,607 | | | | | | 11,444 | | |
Wolverine
|
| | | | 2,906 | | | | | | 2,130 | | |
Total related party interest expense
|
| | | $ | 57,574 | | | | | $ | 42,668 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Aristeia
|
| | | $ | 50,905 | | | | | $ | 35,939 | | |
Highbridge
|
| | | | 80,930 | | | | | | 58,709 | | |
Mudrick
|
| | | | 208,078 | | | | | | 152,757 | | |
Whitebox
|
| | | | 132,559 | | | | | | 93,583 | | |
Wolverine
|
| | | | 24,683 | | | | | | 23,998 | | |
Total related party debt
|
| | | $ | 497,155 | | | | | $ | 364,986 | | |
| | |
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| | | | A-46 | | | |
| | | | A-47 | | | |
| | | | A-47 | | | |
| | | | A-47 | | | |
| | | | A-47 | | | |
| | | | A-47 | | | |
| | | | A-48 | | | |
| | | | A-49 | | | |
| | | | A-50 | | | |
| | | | A-50 | | | |
| | | | A-51 | | | |
| | | | A-51 | | | |
| | | | A-51 | | | |
| | | | A-51 | | | |
| | | | A-52 | | | |
| | | | A-53 | | | |
| | | | A-53 | | | |
| | | | A-53 | | | |
| | | | A-53 | | | |
| | | | A-53 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-56 | | | |
| | | | A-56 | | |
| Exhibit A | | | Form of Seller Support Agreement | |
| Exhibit B | | | Form of Post-Closing Parent Charter | |
| Exhibit C | | | Form of Trust Termination Letter | |
| Exhibit D | | | Form of Registration Rights Agreement | |
| Exhibit E | | | Form of Sprott Royalty Agreement | |
| Exhibit F | | | Allocation Principles | |
| SCHEDULES | | |||
| Schedule A | | | A-Defined Terms | |
| “1.25 Lien Debt” | | | Schedule A, Section B(a) | |
| “1.25 Lien Exchange Agreement” | | | Recital 8 | |
| “1.25 Lien Note Purchase Agreement” | | | Schedule A, Section B(b) | |
| “1.25 Lien Notes” | | | Schedule A, Section B(c) | |
| “1.5 Lien Cash Payment Amount” | | | Schedule A, Section B(d) | |
| “1.5 Lien Debt” | | | Schedule A, Section B(e) | |
| “1.5 Lien Notes” | | | Schedule A, Section B(f) | |
| “1.5 Lien Share Payment” | | | Schedule A, Section B(g) | |
| “1.5 Lien Share Payment Value” | | | Schedule A, Section B(h) | |
| “Acquisition” | | | Recital 3 | |
| “Acquisition Sub” | | | Preamble | |
| “Acquisition Sub Assumed Liabilities” | | | Section 5.10 | |
| “Acquisition Sub Common Stock” | | | Section 3.3(b) | |
| “Affiliate” | | | Schedule A, Section B(i) | |
| “Aggregate Acquisition Consideration” | | | Schedule A, Section B(j) | |
| “Agreement” | | | Preamble | |
| “Allied Delaware” | | | Recital 2 | |
| “Allied VGH” | | | Recital 2 | |
| “Allocation” | | | Section 5.16(b) | |
| “Alternative Transaction” | | | Section 5.13(b) | |
| “Assignment and Assumption Agreement” | | | Section 1.4(b)(iv) | |
| “Assumed Benefit Plans” | | | Schedule A, Section B(k) | |
| “Assumed New Subordinated Notes” | | | Recital 8 | |
| “Business Combination” | | | Schedule A, Section B(l) | |
| “Business Day” | | | Schedule A, Section B(m) | |
| “Cash Available for Payment” | | | Schedule A, Section B(m) | |
| “Charter Documents” | | | Schedule A, Section B(o) | |
| “Chosen Courts” | | | Schedule A, Section B(p) | |
| “Closing” | | | Section 1.2 | |
| “Closing Date” | | | Section 1.2 | |
| “Closing Form 8-K” | | | Section 5.3(c) | |
| “Closing Press Release” | | | Section 5.3(c) | |
| “Code” | | | Schedule A, Section B(q) | |
| “Continental” | | | Section 3.14(a) | |
| “Contracts” | | | Schedule A, Section B(r) | |
| “Copyrights” | | | Schedule A, Section B(jj) | |
| “Crofoot Royalty Agreements” | | | Schedule A, Section 1.2(s) | |
| “Current 1.25 Lien Note Purchase Agreements” | | | Schedule A, Section B(b) | |
| “Data Room” | | | Section 8.2 | |
| “DGCL” | | | Recital 3 | |
| “DLLCA” | | | Schedule A, Section 1.2(t) | |
| “Direct Subsidiaries” | | | Recital B | |
| “Direct Subsidiary Equity Interests” | | | Recital 2 | |
| “Effective Time” | | | Section 1.2 | |
| “Emergence Date” | | | Section 2.5 | |
| “Employee Benefit Plans” | | | Section 2.10(a) | |
| “Employees” | | | Schedule A, Section 1.2(u) | |
| “Enforceability Exceptions” | | | Section 2.3(a) | |
| “Environmental Law” | | | Schedule A, Section 1.2(v) | |
| “Environmental Permits” | | | Section 2.15(a)(i) | |
| “ERISA” | | | Schedule A, Section 1.2(w) | |
| “ERISA Affiliate” | | | Schedule A, Section 1.2(x) | |
| “Excess Notes” | | | Recital 9 | |
| “Excess Notes Cash Payment Amount” | | | Schedule A, Section 1.2(y) | |
| “Excess Notes Share Payment” | | | Schedule A, Section 1.2(z) | |
| “Excess Notes Share Payment Value” | | | Schedule A, Section 1.2(aa) | |
| “Exchange Act” | | | Schedule A, Section 1.2(bb) | |
| “Exchange Agreement” | | | Recital 9 | |
| “Excluded Seller Contract” | | | Schedule A, Section 1.2(cc) | |
| “Extended Business Combination Date” | | | Section 5.33 | |
| “Extension” | | | Section 5.33 | |
| “First Lien Debt” | | | Schedule A, Section 1.2(dd) | |
| “Forward Purchase Contract” | | | Recital 13 | |
| “Governmental Entity” | | | Schedule A, Section 1.2(ee) | |
| “Hazardous Substance” | | | Schedule A, Section 1.2(ff) | |
| “HR&D” | | | Recital 16 | |
| “HSR Act” | | | Section 2.4(b) | |
| “Incentive Plan” | | | Section 5.1(b) | |
| “Indebtedness” | | | Schedule A, Section B(gg) | |
| “Indemnified Party” | | | Section 5.15(a) | |
| “Initial Subscribers” | | | Schedule A, Section B(hh) | |
| “Insider” | | | Schedule A, Section B(ii) | |
| “Insurance Policies” | | | Section 2.20 | |
| “Intellectual Property” | | | Schedule A, Section B(jj) | |
| “Intellectual Property License Agreement” | | | Section 2.17(b) | |
| “IPO” | | | Schedule A, Section B(kk) | |
| “IPO Prospectus” | | | Schedule A, Section B(ll) | |
| “Jacobs Note” | | | Schedule A, Section B(mm) | |
| “JOBS Act” | | | Section 5.22 | |
| “Knowledge” | | | Schedule A, Section B(nn) | |
| “Law” | | | Schedule A, Section B(oo) | |
| “Leased Real Property” | | | Section 2.13(b) | |
| “Legal Proceeding” | | | Schedule A, Section B(pp) | |
| “Licensed Intellectual Property” | | | Section 2.17(b) | |
| “Lien” | | | Schedule A, Section B(qq) | |
| “LLC Conversions” | | | Schedule A, Section B(rr) | |
| “Material Seller Contracts” | | | Section 2.18(a) | |
| “Mine” | | | Schedule A, Section B(ss) | |
| “Minerals” | | | Schedule A, Section B(tt) | |
| “Mining Restart Plan” | | | Schedule A, Section B(uu) | |
| “Nasdaq” | | | Section 3.13 | |
| “Nevada Gold” | | | Recital 2 | |
| “New Subordinated Notes” | | | Schedule A, Section B(vv) | |
| “Nonparty Affiliates” | | | Section 8.14 | |
| “Operating Equipment and Facilities” | | | Schedule A, Section B(ww) | |
| “Order” | | | Schedule A, Section B(xx) | |
| “Ordinary Course of Business” | | | Schedule A, Section B(yy) | |
| “Outside Date” | | | Section 7.1(b) | |
| “Outstanding Parent Expenses” | | | Schedule A, Section B(zz) | |
| “Owned Property” | | | Section 2.13(a) | |
| “Parent” | | | Preamble | |
| “Parent Assumed Liabilities” | | | Section 5.10 | |
| “Parent Audited Financial Statements” | | | Section 3.7(b) | |
| “Parent Board” | | | Recital 6 | |
| “Parent Business Combination” | | | Section 5.13(a) | |
| “Parent Class A Common Stock” | | | Section 3.3(a) | |
| “Parent Class B Common Stock” | | | Section 3.3(a) | |
| “Parent Common Stock” | | | Section 3.3(a) | |
| “Parent Contracts” | | | Section 3.11(a) | |
| “Parent Disclosure Letter” | | | Article III | |
| “Parent Financial Statements” | | | Section 3.7(b) | |
| “Parent Interim Financial Statements” | | | Section 3.7(b) | |
| “Parent Material Adverse Effect” | | | Schedule A, Section B(aaa) | |
| “Parent Preferred Stock” | | | Section 3.3(a) | |
| “Parent Recommendation” | | | Recital 6 | |
| “Parent SEC Reports” | | | Section 3.7(a) | |
| “Parent Special Meeting” | | | Section 5.1(b) | |
| “Parent Sponsor Letter Agreement” | | | Recital 14 | |
| “Parent Stock” | | | Section 3.3(a) | |
| “Parent Stockholder” | | | Schedule A, Section B(bbb) | |
| “Parent Stockholder Matters” | | | Section 5.1(b) | |
| “Parent Stockholder Redemption” | | | Schedule A, Section B(ccc) | |
| “Parent Stockholder Redemptions” | | | Schedule A, Section B(ddd) | |
| “Parent Units” | | | Schedule A, Section B(eee) | |
| “Parent Warrants” | | | Section 3.3(a) | |
| “Party” or “Parties” | | | Preamble | |
| “Patented Claims” | | | Section 2.23(a) | |
| “Patents” | | | Schedule A, Section B(jj) | |
| “Payoff Amounts” | | | Section 5.24 | |
| “Payoff Letters” | | | Section 5.24 | |
| “Permit” | | | Schedule A, Section B(fff) | |
| “Permitted Lien” | | | Schedule A, Section 1.2(ggg) | |
| “Person” | | | Schedule A, Section 1.2(hhh) | |
| “Personal Information” | | | Schedule A, Section 1.2(iii) | |
| “Personal Property” | | | Section 2.13(f) | |
| “Post-Closing Parent Charter” | | | Section 5.1(b) | |
| “Precious Metals” | | | Schedule A, Section 1.2(jjj) | |
| “Privacy Laws” | | | Schedule A, Section 1.2(kkk) | |
| “Private Investment” | | | Recital 12 | |
| “Private Investment Value” | | | Schedule A, Section 1.2(lll) | |
| “Private Placement Warrants” | | | Section 3.3(a) | |
| “Public Warrants” | | | Section 3.3(a) | |
| “Purchase Shares” | | | Schedule A, Section 1.2(mmm) | |
| “Real Property Leases” | | | Section 2.13(b) | |
| “Registration Statement” | | | Section 5.1(a) | |
| “Registration Rights Agreement” | | | Section 5.28 | |
| “Representatives” | | | Schedule A, Section 1.2(nnn) | |
| “Requisite Parent Stockholder Approval” | | | Schedule A, Section 1.2(ooo) | |
| “Requisite Seller Stockholder Approval” | | | Schedule A, Section 1.2(ppp) | |
| “Retained Cash” | | | Schedule A, Section 1.2(qqq) | |
| “Retained Employees” | | | Schedule A, Section 1.2(rrr) | |
| “Reviewable Document” | | | Section 5.4(a) | |
| “Sarbanes-Oxley Act” | | | Section 3.7(d) | |
| “SEC” | | | Schedule A, Section 1.2(sss) | |
| “Second Lien Conversion Agreement” | | | Recital 10 | |
| “Second Lien Notes” | | | Schedule A, Section 1.2(ttt) | |
| “Securities Act” | | | Schedule A, Section 1.2(uuu) | |
| “Seller” | | | Preamble | |
| “Seller Audited Financial Statements” | | | Section 2.6(a) | |
| “Seller Board” | | | Recital 4 | |
| “Seller Common Stock” | | | Recital 5 | |
| “Seller Contracts” | | | Section 2.18(a) | |
| “Seller Disclosure Letter” | | | Section 2.1(a) | |
| “Seller Financial Statements” | | | Section 2.6(b) | |
| “Seller Fundamental Representations” | | | Schedule A, Section 1.2(vvv) | |
| “Seller Intellectual Property” | | | Schedule A, Section 1.2(www) | |
| “Seller Interim Financial Statements” | | | Section 2.6(b) | |
| “Seller Material Adverse Effect” | | | Schedule A, Section 1.2(xxx) | |
| “Seller Registered Intellectual Property” | | | Section 2.17(a) | |
| “Seller Special Meeting” | | | Section 5.1(c) | |
| “Seller Stockholder” | | | Schedule A, Section 1.2(yyy) | |
| “Seller Subsidiaries” | | | Section 2.1(a) | |
| “Seller Support Agreement” | | | Recital 5 | |
| “Seller Systems” | | | Section 2.17(g) | |
| “Seller Warrant” | | | Schedule A, Section 1.2(zzz) | |
| “Signing Press Release” | | | Section 5.3(b) | |
| “Signing Form 8-K” | | | Section 5.3(a) | |
| “Sponsor” | | | Schedule A, Section 1.2(aaaa) | |
| “Sprott Credit Agreement” | | | Schedule A, Section 1.2(bbbb) | |
| “Sprott Royalty Agreement” | | | Schedule A, Section 1.2(cccc) | |
| “Stockholders Agreement” | | | Schedule A, Section 1.2(dddd) | |
| “Subsidiary” | | | Schedule A, Section 1.2(eeee) | |
| “Subsidiary Equity Interests” | | | Section 2.2(a) | |
| “Surrendered Shares” | | | Schedule A, Section 1.2(ffff) | |
| “Surrendered Shares Value” | | | Schedule A, Section 1.2(gggg) | |
| “Tax/Taxes” | | | Schedule A, Section 1.2(hhhh) | |
| “Tax Return” | | | Schedule A, Section 1.2(iiii) | |
| “Third-Party Private Investment Value” | | | Schedule A, Section 1.2(jjjj) | |
| “Third-Party Private Investors” | | | Schedule A, Section 1.2(kkkk) | |
| “Termination Fee” | | | Section 7.2(c) | |
| “Trademarks” | | | Schedule A, Section B(jj) | |
| “Transaction Agreements” | | | Schedule A, Section 1.2(llll) | |
| “Transaction Litigation” | | | Schedule A, Section 1.2(mmmm) | |
| “Transactions” | | | Schedule A, Section 1.2(nnnn) | |
| “Transferred Assets” | | | Section 2.1(a) | |
| “Transferred Employees” | | | Schedule A, Section 1.2(oooo) | |
| “Treasury Regulation” | | | Schedule A, Section 1.2(pppp) | |
| “Trust Account” | | | Section 3.14(a) | |
| “Trust Agreement” | | | Section 3.14(a) | |
| “Trust Termination Letter” | | | Section 5.6 | |
| “U.S. GAAP” | | | Section 2.6(a) | |
| “Unpatented Claims” | | | Section 2.23(b) | |
| “Waived 280G Benefits” | | | Section 5.17 | |
| “WARN” | | | Section 2.11(d) | |
| “Water Rights” | | | Section 2.23(o) | |
| | | | MUDRICK CAPITAL ACQUISITION CORPORATION | | |||
| | | | By: | | | /s/ Jason Mudrick | |
| | | | Name: | | | Jason Mudrick | |
| | | | Title: | | | Chief Executive Officer | |
| | | | MUDS ACQUISITION SUB, INC. | | |||
| | | | By: | | | /s/ Jason Mudrick | |
| | | | Name: | | | Jason Mudrick | |
| | | | Title: | | | President | |
| | | | HYCROFT MINING CORPORATION | | |||
| | | | By: | | | /s/ Stephen M. Jones | |
| | | | Name: | | | Stephen M. Jones | |
| | | | Title: | | | Executive Vice President and Chief Financial Officer | |
Noteholder
|
| |
Principal
Amount of 1.5 Lien Notes Beneficially Owned(1) |
| |||
Aristeia Master LP
|
| | | $ | 14,783,381 | | |
Highbridge MSF International Ltd.
|
| | | $ | 14,730,129 | | |
Highbridge Tactical Credit Master Fund, L.P.
|
| | | $ | 7,220,287 | | |
Mudrick Distressed Opportunity Drawdown Fund, L.P.
|
| | | $ | 4,195,671 | | |
Mudrick Distressed Opportunity Fund Global, L.P.
|
| | | $ | 32,182,464 | | |
Blackwell Partners LLC – Series A
|
| | | $ | 8,554,838 | | |
Boston Patriot Batterymarch St LLC
|
| | | $ | 6,833,737 | | |
Mudrick Distressed Opportunity Specialty Fund, L.P.
|
| | | $ | 1,689,612 | | |
Mercer QIF Fund PLC
|
| | | $ | 1,190,445 | | |
WBox 2015-5 Ltd.
|
| | | $ | 38,501,190 | | |
Wolverine Flagship Fund Trading Limited
|
| | | $ | 7,168,119 | | |
Noteholder
|
| |
Principal Amount of
New Subordinated Notes to be Beneficially Owned(2) |
| |
Principal Amount
of Assumed New Subordinated Notes to be Beneficially Owned(3) |
| |
Principal
Amount of Excess Notes to be Beneficially Owned(4) |
| |||||||||
Aristeia Master LP
|
| | | $ | 8,373,833 | | | | | $ | 8,373,833 | | | | | $ | 0 | | |
Highbridge MSF International Ltd.
|
| | | $ | 8,443,328 | | | | | $ | 8,443,328 | | | | | $ | 0 | | |
Highbridge Tactical Credit Master Fund, L.P.
|
| | | $ | 3,990,181 | | | | | $ | 3,990,181 | | | | | $ | 0 | | |
Mudrick Distressed Opportunity Drawdown Fund, L.P.
|
| | | $ | 4,968,629 | | | | | $ | 4,968,629 | | | | | $ | 0 | | |
Mudrick Distressed Opportunity Fund Global, L.P.
|
| | | $ | 12,140,130 | | | | | $ | 12,140,130 | | | | | $ | 0 | | |
Blackwell Partners LLC – Series A
|
| | | $ | 4,311,103 | | | | | $ | 4,311,103 | | | | | $ | 0 | | |
Boston Patriot Batterymarch St LLC
|
| | | $ | 5,691,316 | | | | | $ | 5,691,316 | | | | | $ | 0 | | |
Mudrick Distressed Opportunity Specialty Fund, L.P.
|
| | | $ | 1,176,016 | | | | | $ | 1,176,016 | | | | | $ | 0 | | |
Mercer QIF Fund PLC
|
| | | $ | 2,666,685 | | | | | $ | 2,666,685 | | | | | $ | 0 | | |
WBOX 2015-5 LTD.
|
| | | $ | 21,808,456 | | | | | $ | 21,808,456 | | | | | $ | 0 | | |
WFF Cayman II Ltd.
|
| | | $ | 4,060,278 | | | | | $ | 4,060,278 | | | | | $ | 0 | | |
Seller Stockholder Name
|
| |
Addresses for Notice
|
|
Aristeia Master LP | | |
c/o Aristeia Capital
One Greenwich Plaza, 3rd Floor Greenwich, CT 06830 Attn: Robert Lynch; Andrew David Email: lynch@aristeiacapital.com; andrew.david@aristeiacapital.com Fax: 212-842-8901 |
|
Highbridge MSF International Ltd. | | |
c/o Highbridge Capital Management LLC
277 Park Avenue, 23rd Floor New York, NY 100172 Attn: Glynnis Kelly Email:glynnis.kelly@highbridge.com; mo-us@highbridge.com |
|
Highbridge Tactical Credit Master Fund, L.P. | | |
c/o Highbridge Capital Management LLC
277 Park Avenue, 23rd Floor New York, NY 100172 Attn: Glynnis Kelly Email:glynnis.kelly@highbridge.com; mo-us@highbridge.com |
|
Mudrick Distressed Opportunity Drawdown Fund, L.P. | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Mudrick Distressed Opportunity Fund Global, L.P. | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Blackwell Partners LLC – Series A | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Boston Patriot Batterymarch St LLC | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Mudrick Distressed Opportunity Specialty Fund, L.P. | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Mercer QIF Fund PLC | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
|
Seller Stockholder Name
|
| |
Addresses for Notice
|
|
WBox 2015-5 Ltd. | | |
3033 Excelsior Boulevard, Suite 500
Minneapolis, MN 55416 Attn: Jacob Mercer, Andrew Thau Email: WHB_LoanDocsHedgeFund_Dist@Whiteboxadvisors.com; HS_WhiteboxBankDebt@hedgeserv.com Fax: 612-355-2198; 646-753-8167 |
|
Wolverine Flagship Fund Trading Limited | | |
c/o Wolverine Asset Management, LLC
175 W. Jackson Blvd., Suite 340 Chicago, IL 60604 Attn: Kenneth L. Nadel Email: notices@wolvefunds.com Fax: 312-884-4401 |
|
WFF Cayman II Ltd. | | |
c/o Wolverine Asset Management, LLC
175 W. Jackson Blvd., Suite 340 Chicago, IL 60604 Attn: Kenneth L. Nadel Email: notices@wolvefunds.com Fax: 312-884-4401 |
|
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Seller Stockholder Name
|
| |
Addresses for Notice
|
| |
Shares of
Seller Common Stock |
|
Whitebox Asymmetric Partners, LP | | |
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416 Attn: Jacob Mercer, Andrew Thau Email: jmercer@whiteboxadvisors.com, AThau@whiteboxadvisors.com Fax: 612-355-2004 |
| | 171,196 | |
Whitebox Credit Partners, LP | | |
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416 Attn: Jacob Mercer, Andrew Thau Email: jmercer@whiteboxadvisors.com, AThau@whiteboxadvisors.com Fax: 612-355-2004 |
| | 123,639 | |
Whitebox Multi-Strategy Partners, LP | | |
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416 Attn: Jacob Mercer, Andrew Thau Email: jmercer@whiteboxadvisors.com, AThau@whiteboxadvisors.com Fax: 612-355-2004 |
| | 125,664 | |
Whitebox Institutional Partners, LP | | |
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416 Attn: Jacob Mercer, Andrew Thau Email: jmercer@whiteboxadvisors.com, AThau@whiteboxadvisors.com Fax: 612-355-2004 |
| | 68,942 | |
Aristeia Master, L.P | | |
1140 Avenue of the Americas.
New York, NY 10036 Attn: Robert Lynch Email: lynch@aristeiacapital.com Fax: 212-842-8901 |
| | 116,608 | |
Windermere Ireland Fund PLC | | |
1140 Avenue of the Americas.
New York, NY 10036 Attn: Robert Lynch Email: lynch@aristeiacapital.com Fax: 212-842-8901 |
| | 5,437 | |
Wolverine Flagship Fund Trading Limited | | |
175 W. Jackson Blvd., Suite 340
Chicago, IL 60604 Attn: Bruce Mygatt Email: bmygatt@wolvefunds.com Fax: 312-884-4401 |
| | 71,534 | |
Highbridge MSF International Ltd. | | |
40 West 57th Street, 32nd Floor
New York, NY 10019 Attn: Glynnis Kelly Email:glynnis.kelly@highbridge.com |
| | 258,791 | |
Highbridge Tactical Credit Master Fund, L.P. | | |
40 West 57th Street, 32nd Floor
New York, NY 10019 Attn: Glynnis Kelly Email:glynnis.kelly@highbridge.com |
| | 98,002 | |
Seller Stockholder Name
|
| |
Addresses for Notice
|
| |
Shares of
Seller Common Stock |
|
Mudrick Distressed Opportunity Fund Global, L.P. | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email: dkirsch@mudrickcapital.com |
| | 525,250 | |
Blackwell partners LLC — Series A | | |
527 Madison Avenue, 6th Floor
New York, NY 10022 Attn: David Kirsch Email:dkirsch@mudrickcapital.com |
| | 111,075 | |
Total
|
| |
N/A
|
| | 1,676,138 | |
| | |
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Schedules
|
| | | |
1.1 | | | Exchanging Holders | |
1.3 | | | Wire Transfer Instructions | |
Exchanging Holder
|
| |
Principal amount of
Existing Notes(1) |
| |
Principal amount of
Notes to be issued on closing(2) |
| ||||||
Aristeia Master LP
|
| | | $ | 8,328,719 | | | | | $ | 8,373,833 | | |
Highbridge MSF International Ltd.
|
| | | $ | 8,397,839 | | | | | $ | 8,443,328 | | |
Highbridge Tactical Credit Master Fund, L.P.
|
| | | $ | 3,968,684 | | | | | $ | 3,990,181 | | |
Mudrick Distressed Opportunity Drawdown Fund, L.P.
|
| | | $ | 4,941,860 | | | | | $ | 4,968,629 | | |
Mudrick Distressed Opportunity Fund Global LP
|
| | | $ | 12,074,725 | | | | | $ | 12,140,130 | | |
Blackwell Partners LLC – Series A
|
| | | $ | 4,287,877 | | | | | $ | 4,311,103 | | |
Boston Patriot Batterymarch St LLC
|
| | | $ | 5,660,654 | | | | | $ | 5,691,316 | | |
Mudrick Distressed Opportunity Specialty Fund, L.P.
|
| | | $ | 1,169,680 | | | | | $ | 1,176,016 | | |
Mercer QIF Fund PLC
|
| | | $ | 2,652,318 | | | | | $ | 2,666,685 | | |
WBOX 2015-5 LTD.
|
| | | $ | 21,690,963 | | | | | $ | 21,808,456 | | |
WFF Cayman II Ltd.
|
| | | $ | 4,038,404 | | | | | $ | 4,060,278 | | |
| Account Name: | | |
Hycroft Mining Corporation
8181 East Tufts Avenue, Suite 510 Denver, CO 80237 |
|
| Bank: | | | Wells Fargo Bank, NA | |
| | | | San Francisco, CA | |
| ABA # | | | 121000248 | |
| Account Number | | | 4126096528 | |
Exhibit
Number |
| |
Description
|
|
99.6 | | | Consent of [•] to be named as a director† | |
99.7 | | | Consent of [•] to be named as a director† | |
99.8 | | | Consent of [•] to be named as a director† | |
99.9 | | | Consent of Duff & Phelps, LLC* | |
99.10 | | | Form of Proxy Card for Hycroft Mining Corporation Special Meeting* | |
101.INS | | | XBRL Instance Document* | |
101.SCH | | | XBRL Taxonomy Extension Schema* | |
101.CAL | | | XBRL Taxonomy Calculation Linkbase* | |
101.LAB | | | XBRL Taxonomy Label Linkbase* | |
101.PRE | | | XBRL Definition Linkbase Document* | |
101.DEF | | | XBRL Definition Linkbase Document* | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Jason Mudrick
Jason Mudrick
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| | April 7, 2020 | |
|
/s/ Glenn Springer
Glenn Springer
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| | April 7, 2020 | |
|
*
David Kirsch
|
| | Vice President and Director | | | April 7, 2020 | |
|
*
Dennis Stogsdill
|
| | Director | | | April 7, 2020 | |
|
*
Timothy Daileader
|
| | Director | | | April 7, 2020 | |
|
*
Dr. Brian Kushner
|
| | Director | | | April 7, 2020 | |
| *By: | | | /s/ Jason Mudrick | |
| | | | Name: Jason Mudrick, Attorney-in-Fact | |
Exhibit 3.2
Final Form
AMENDED AND RESTATED BY LAWS
OF
HYCROFT MINING HOLDING CORPORATION
(THE “CORPORATION”)
ARTICLE I
OFFICES
Section 1.1. Registered Office. The registered office of the Corporation within the State of Delaware shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in the State of Delaware.
Section 1.2. Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.1. Annual Meetings. The annual meeting of stockholders shall be held at such place and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders entitled to vote on such matters shall elect those directors of the Corporation to fill any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.
Section 2.2. Special Meetings. Subject to the rights of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairperson of the Board, Chief Executive Officer, or the Board pursuant to a resolution adopted by a majority of the Board. Special meetings of stockholders shall be held at such place and time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).
Section 2.3. Notices. Notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat by the Corporation not less than 10 nor more than 60 days before the date of the meeting. If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any special meeting of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting.
Section 2.4. Quorum. Except as otherwise provided by applicable law, the Corporation’s Second Amended and Restated Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”) or these By-Laws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairperson of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.
Section 2.5. Voting of Shares.
(a) Voting Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer or agent who has charge of the stock ledger of the Corporation to prepare, at least 10 calendar days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting and showing the mailing address and the number and class of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any meeting of stockholders.
(b) Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by the stockholder or proxy holder. The Board, in its discretion, or the chairperson of the meeting of stockholders, in such person’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(c) Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as it is, coupled with an interest. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the Corporation’s stock or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing with the Secretary either an instrument in writing revoking the proxy or another duly executed proxy bearing a later date. Proxies need not be filed with the Secretary until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a valid means by which a stockholder may grant such authority. No stockholder shall have cumulative voting rights.
(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
2
(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.
(d) Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Certificate of Incorporation, these By-Laws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter.
(e) Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities, to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may appoint one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by the Board, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each; determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election. Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.
Section 2.6. Adjournments. Any meeting of stockholders, annual or special, may be adjourned by the chairperson of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the stockholders or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 2.7. Advance Notice for Business.
(a) Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.7(a) and on the record date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election to succeed a director whose term expires on the date of the annual meeting pursuant to Section 3.2 will be considered for election at such meeting.
3
(i) In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary of the date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 45 days before or after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder’s notice as described in this Section 2.7(a).
(ii) To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend these By-Laws, the language of the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (E) any material direct or indirect interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.
(iii) The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.7(a), provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.7(a) shall be deemed to preclude discussion by any stockholder of any such business. If the Board or the chairperson of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have been received by the Corporation.
(iv) In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.
(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting only pursuant to Section 3.2.
4
(c) Public Announcement. For purposes of these By-Laws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
Section 2.8. Conduct of Meetings. The chairperson of each annual and special meeting of stockholders shall be the Chairperson of the Board or, in the absence (or inability or refusal to act) of the Chairperson of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairperson of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these By-Laws or such rules and regulations as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairperson of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairperson of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairperson of the meeting may appoint any person to act as secretary of the meeting.
Section 2.9. Action by Written Consent. Any action required or permitted to be taken at any meeting of stockholders may, except as otherwise required by law or the Certificate of Incorporation, be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of record of the issued and outstanding capital stock of the Corporation having not less than the minimum number of votes (determined as of the record date of such consent) that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereat were present and voted. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 3.1. Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders. Directors need not be stockholders of the Corporation or residents of the State of Delaware.
Section 3.2. Board Composition. The number, election and term of the directors of the Corporation shall be set forth in the Certificate of Incorporation.
5
Section 3.3. Chairperson of the Board. The Board may elect a Chairperson of the Board (the “Chairperson”) from among the members of the Board. If elected, the Board shall designate the Chairperson as either a non-executive Chairperson or an executive Chairperson. The Chairperson shall not be deemed an officer of the Corporation, unless the Board shall determine otherwise. Subject to the control vested in the Board by statute, by the Certificate of Incorporation, or by these By-Laws, the Chairperson shall, if present, preside over all meetings of the stockholders and of the Board and shall have such other duties and powers as from time to time may be assigned to him or her by the Board, the Certificate of Incorporation or these By-Laws. In the absence (or inability or refusal to act) of the Chairperson, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairperson shall not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation as a member of the Board). The position of Chairperson and Chief Executive Officer may be held by the same person.
Section 3.4. Advance Notice for Nomination of Directors.
(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect directors. Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving of the notice provided for in this Section 3.2 and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who complies with the notice procedures set forth in this Section 3.2.
(b) In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 45 days before or after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting or special meeting commence a new time period for the giving of a stockholder’s notice as described in this Section 3.2.
(c) Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is greater than the number of directors whose terms expire on the date of such annual meeting and there is no public announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on the 90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice required by this Section 3.2 shall also be considered timely, but only with respect to nominees for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement was first made by the Corporation.
(d) To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the person and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner, if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed nominee and any other person or persons (including their names), (D) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
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(e) If the Board or the chairperson of the meeting of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.2, then such nomination shall not be considered at such meeting. Notwithstanding the foregoing provisions of this Section 3.2, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been received by the Corporation.
(f) In addition to the provisions of this Section 3.2, a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.2 shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.
Section 3.5. Fees and Expenses. The Board shall have authority to fix the amount of compensation of directors. Directors shall receive such reasonable fees for their services on the Board and any committee thereof and reimbursement of their expenses associated with their attendance at meetings of the Board and any committee thereof. No payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. The Board shall also have the power and discretion to provide for and pay fair compensation to directors for rendering services to the Corporation not ordinarily rendered by directors.
Section 3.6. Newly Created Directorships and Vacancies. Unless otherwise restricted by the Certificate of Incorporation, newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled solely by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office until the next annual meeting of stockholders and until such director’s successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
Section 3.7. Resignation. Any director may resign at any time by giving written notice of resignation (including by electronic transmission) to the Chairperson, the Chief Executive Officer, or the Secretary. Unless otherwise specified in the written notice, the resignation shall take effect upon receipt thereof and unless otherwise specified in it, the acceptance of the resignation shall not be necessary to make it effective.
Section 3.8. Removal. Subject to the Certificate of Incorporation and Section 3.9 hereof, and except as otherwise required by law, any or all of the directors may be removed from office at any time by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.
Section 3.9. Preferred Stock – Directors. Notwithstanding any other provision of this Article III, and except as otherwise required by law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Second Amended and Restated Certificate (including any Preferred Stock Designation).
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Section 3.10. Reliance on Accounts, Reports, Etc. A director, or a member of any committee designated by the Board of Directors under Article V of these By-Laws, shall, in the performance of such director’s or committee member’s duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees designated by the Board, or by any other person as to the matters the director or the member reasonably believes are within such other person’s professional or expert competence and who the director or member reasonably believes or determines has been selected with reasonable care by or on behalf of the Corporation.
ARTICLE IV
BOARD MEETINGS
Section 4.1. Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.
Section 4.2. Regular Meetings. The Board by resolution may provide for the holding of regular meetings, which meetings of the Board may be held without notice at such times, dates and places as shall from time to time be determined by the Board.
Section 4.3. Special Meetings. Special meetings of the Board (a) may be called by the Chairperson of the Board or President and (b) shall be called by the Chairperson of the Board, President or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these By-Laws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 9.4.
Section 4.4. Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these By-Laws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 4.5. Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
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Section 4.6. Organization. The chairperson of each meeting of the Board shall be the Chairperson of the Board or, in the absence (or inability or refusal to act) of the Chairperson of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, a chairperson elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairperson of the meeting may appoint any person to act as secretary of the meeting.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 5.1. Establishment. The Board may by resolution passed by a majority of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.
Section 5.2. Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it, but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the General Corporation Law of the State of Delaware (the “DGCL”) to be submitted to stockholders for approval; or (b) adopting, amending or repealing any bylaw of the Corporation.
Section 5.3. Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section 5.4. Resignation. Any member (and any alternate member) of any committee may resign at any time by submitting an electronic transmission or by delivering a written notice of resignation, signed by such member, to the Board or the Chairperson. Unless otherwise specified therein, such resignation shall take effect upon delivery.
Section 5.5. Removal. Any member (and any alternate member) of any committee may be removed at any time, either for or without cause, by resolution adopted by a majority of the total authorized number of directors.
Section 5.6. Vacancies. If any vacancy shall occur in any committee, by reason of disqualification, death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board.
Section 5.7. Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these By-Laws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these By-Laws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article III and Article IV of these By-Laws.
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ARTICLE VI
OFFICERS
Section 6.1. Officers. The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, one or more Presidents, Vice Presidents, Assistant Secretaries and Treasurers) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these By-Laws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.
(a) Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall (i) have general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board, (ii) shall be responsible for the execution of the policies of the Board with respect to such matters, (iii) appoint and remove subordinate officers, agents and employees, except those appointed by the Board, and (iv) possess such other powers and perform such other duties as may be assigned by the Board and as may be incident to the office of the Chief Executive Officer of the Corporation. In the absence (or inability or refusal to act) of the Chairperson of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person.
(c) President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of the Chairperson of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated by the Board. The position of President and Chief Executive Officer may be held by the same person.
(d) Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.
(e) Secretary.
(i) The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairperson of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.
(ii) The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates issued for the same and the number and date of certificates cancelled.
(f) Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.
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(g) Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office (including, without limitation, (i) having the custody of the corporate funds and securities, except as otherwise provided by the Board, (ii) keeping full and accurate accounts of receipts and disbursements in books belonging to the Corporation, (iii) depositing all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board, (d) disbursing the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and (e) rendering to the Chief Executive Officer and the Board, whenever they may require it, an account of all his or her transactions as Chief Financial Officer and of the financial condition of the Corporation).
(h) Treasurer. The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial Officer, perform the duties and exercise the powers of the Chief Financial Officer.
Section 6.2. Term of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified by the Board or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.
Section 6.3. Other Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.
Section 6.4. Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these By-Laws otherwise provide; provided, however, that no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required by law, the Second Amended and Restated Certificate of Incorporation or these By-Laws to be executed, acknowledged or verified by two or more officers. Officers need not be stockholders or residents of the State of Delaware.
ARTICLE VII
SHARES
Section 7.1. Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.
Section 7.2. Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.
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Section 7.3. Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by (a) the Chairperson of the Board, Chief Executive Officer, the President or a Vice President and (b) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.
Section 7.4. Consideration and Payment for Shares.
(a) Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of any tangible or intangible property or any benefit to the Corporation including cash, promissory notes, services performed, contracts for services to be performed or other securities, or any combination thereof.
(b) Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.
Section 7.5. Lost, Destroyed or Wrongfully Taken Certificates.
(a) If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.
(b) If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares before receiving notification, the owner shall be precluded from asserting against the Corporation any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form.
Section 7.6. Transfer of Stock.
(a) If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement requesting the registration of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer as requested if:
(i) in the case of certificated shares, the certificate representing such shares has been surrendered;
(ii) (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C) with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate person or by an agent who has actual authority to act on behalf of the appropriate person;
(iii) the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable assurance that the endorsement or instruction is genuine and authorized as the Corporation may request;
(iv) the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in accordance with Section 7.8(a); and
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(v) such other conditions for such transfer as shall be provided for under applicable law have been satisfied.
(b) Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.
Section 7.7. Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.
Section 7.8. Effect of the Corporation’s Restriction on Transfer.
(a) A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated shares, contained in a notice, offering circular or prospectus sent by the Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares, may be enforced against the holder of such shares or any successor or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility for the person or estate of the holder.
(b) A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless: (i) the shares are certificated and such restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated and such restriction was contained in a notice, offering circular or prospectus sent by the Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares.
Section 7.9. Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Right to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided, however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board.
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Section 8.2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VIII or otherwise.
Section 8.3. Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation.
Section 8.4. Non-Exclusivity of Rights; Other Sources. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these By-Laws, an agreement, a vote of stockholders or disinterested directors, or otherwise. The Corporation hereby acknowledges that Indemnitees may have certain rights to indemnification, advancement of expenses and/or insurance provided by sources other than the Corporation (hereinafter the “Third Party Indemnitors”). The Corporation hereby agrees that it (a) is the indemnitor of first resort (i.e., its obligations to the Indemnitees are primary and any obligation of the Third Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Indemnitees are secondary), (ii) shall be required to advance the full amount of expenses incurred by the Indemnitees and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this paragraph and these By-Laws from time to time (or any other agreement between the Corporation and the Indemnitees), without regard to any rights the Indemnitees may have against the Third Party Indemnitors, and (iii) irrevocably waives, relinquishes and releases the Third Party Indemnitors from any and all claims against the Third Party Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Third Party Indemnitors on behalf of the Indemnitees with respect to any claim for which the Indemnitees have sought indemnification from the Corporation shall affect the foregoing and the Third Party Indemnitors shall have a right of contribution and/or to be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnitees against the Corporation. The Corporation and the Indemnitees agree that the Third Party Indemnitors are express third party beneficiaries of the terms of this paragraph.
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Section 8.5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Section 8.6. Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.
Section 8.7. Exceptions to Rights of Indemnification and Advancement. Notwithstanding any provision in this Article VIII, the Corporation shall not be obligated by this Article VIII to make any indemnity or advancement in connection with any claim made against an Indemnitee:
(a) subject to Section 8.4, for which payment has actually been made to or on behalf of such Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by such Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;
(c) for reimbursement to the Corporation of any bonus or other incentive-based or equity based compensation or of any profits realized by Indemnitee from the sale of securities of the Corporation in each case as required under the Exchange Act; or
(d) in connection with any proceeding (or any part of any Proceeding) initiated by such Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by such Indemnitee against the Corporation or its directors, officers, employees or other Indemnitees, unless (i) the Corporation has joined in or, prior to such Proceeding’s initiation, the Board of Directors authorized such Proceeding (or any part of such Proceeding), (ii) the Corporation provides the indemnification or advancement, in its sole discretion, pursuant to the powers vested in the Corporation under applicable law, or (iii) the Proceeding is one to enforce such Indemnitee’s rights under this Article VI, Article VII of the Certificate of Incorporation or any other indemnification, advancement or exculpation rights to which Indemnitee may at any time be entitled under applicable law or any agreement.
Section 8.8. Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these By-Laws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided further, that any amendment or repeal of this Article VIII shall require the affirmative vote of the stockholders holding at least 66 2/3% of the voting power of all outstanding shares of capital stock of the Corporation.
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Section 8.9. Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” for purposes of Section 145 of the DGCL.
Section 8.10. Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.
Section 8.11. Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these By-Laws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held at any place.
Section 9.2. Fixing Record Dates.
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section 9.3. Means of Giving Notice.
(a) Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these By-Laws notice is required to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing on the records of the Corporation.
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(b) Notice to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these By-Laws notice is required to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. A notice to a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder, (ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written notice of such revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(c) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by telex, facsimile telecommunication, electronic mail, telegram and cablegram.
(d) Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these By-Laws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented to receiving such single written notice.
(e) Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these By-Laws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
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Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these By-Laws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Section 9.4. Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these By-Laws, a written waiver of such notice, signed before or after the date of such meeting by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.5. Meeting Attendance via Remote Communication Equipment.
(a) Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(i) participate in a meeting of stockholders; and
(ii) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and, if entitled to vote, to vote on matters submitted to the applicable stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.
(b) Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these By-Laws, members of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.6. Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.
Section 9.7. Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
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Section 9.8. Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these By-Laws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairperson of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairperson of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.
Section 9.9. Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.
Section 9.10. Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 9.11. Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.
Section 9.12. Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairperson of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairperson of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.
Section 9.13. Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairperson of the Board, Chief Executive Officer, President, any Vice President or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.
Section 9.14. Amendments. The Board shall have the power to adopt, amend, alter or repeal these By-Laws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal these By-Laws. These By-Laws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power (except as otherwise provided in Section 8.7) of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, shall be required for the stockholders to adopt, amend, alter or repeal these By-Laws.
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Exhibit 8.1
767 Fifth Avenue
New York,NY 10153-0119
+1 212 310 8000 tel
+1 212 310 8007 fax
April 7, 2020
Mudrick Capital Acquisition Corporation
527 Madison Avenue, 6th Fl.
New York, NY 10022
Ladies and Gentlemen:
We have acted as counsel to Mudrick Capital Acquisition Corporation, a Delaware corporation (the “Company”), in connection with the preparation and filing with the U.S. Securities and Exchange Commission (the “Commission”) of a Registration Statement on Form S-4 (File No. 333-236460), originally filed by the Company with the Commission on February 14, 2020 (and as amended or supplemented through the date hereof together with all exhibits thereto, the “Registration Statement”), under the Securities Act of 1933, as amended (the “Act”), relating to, that certain Purchase Agreement, dated as of January 13, 2020 and amended on February 26, 2020 (as it may be further amended from time to time, the “Purchase Agreement”), by and among the Company, MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of the Company, and Hycroft Mining Corporation, a Delaware corporation (“Seller”), and the proposal of the Company to consummate the transactions set forth in the Purchase Agreement and related agreements, including the acquisition by the Company of substantially all of the assets, and assumption by the Company of substantially all of the liabilities, of Seller (the “Business Combination”). Any capitalized terms used but not defined herein have the meaning given to such terms in the Registration Statement.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of: (i) the Registration Statement, (ii) the Purchase Agreement and related agreements and (iii) such other corporate records, agreements, documents and other instruments, and such other certificates or comparable documents of public officials and of officers and representatives of the Company, as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. In addition, we have obtained such additional information as we deemed relevant and necessary through consultation with various officers and representatives of the Company.
Our opinion set forth below assumes, with your consent: (1) the accuracy and completeness of the statements and facts concerning the Business Combination set forth in the Purchase Agreement and related agreements and the Registration Statement (and that no transaction or condition described therein and affecting this opinion will be waived by any party), (2) the consummation of the Business Combination in the manner contemplated by, and in accordance with the terms set forth in, the Purchase Agreement and related agreements and the Registration Statement and (3) that there will be no change in applicable U.S. federal income tax law from the date hereof through the effective time of each transaction included in the Business Combination.
Mudrick Capital
Acquisition Corporation
April 7, 2020 Page 2
Based upon the facts and statements set forth above, our examination and review of the documents referred to above and subject to the assumptions set forth above and qualifications set forth below, we hereby confirm that the discussion contained in the Registration Statement under the caption “MATERIAL TAX CONSIDERATIONS—MUDS Material U.S. Federal Income Tax Considerations,” insofar as such discussion constitutes statements of U.S. federal income tax law or legal conclusions, and subject to the assumptions, limitations and conditions set forth therein, represents our opinion as to the material U.S. federal income tax consequences for the holders of MUDS Class A common stock that elect to have their shares of MUDS Class A common stock redeemed for cash if the Business Combination is completed.
Our opinion is based on current provisions of the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service and case law, in each case as in effect on the date hereof and any of which may be changed at any time with retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Business Combination, or any inaccuracy in the facts or assumptions on which we have relied, may affect the continuing validity of the opinion set forth herein. We assume no responsibility to inform you of any such change or inaccuracy that may occur or come to our attention. No opinion is expressed as to any transactions other than the Business Combination or any matter other than that specifically covered by the foregoing opinion.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Commission thereunder.
Very truly yours, | |
/s/ Weil, Gotshal & Manges LLP |
Exhibit 10.11
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (as amended, restated, amended and restated or otherwise modified from time to time, this “Agreement”) is made as of the 22 day of October, 2015, between Hycroft Mining Corporation, a Delaware corporation (herein called the “Company”), and Computershare Inc., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent (together with their respective successors and assigns, the “Warrant Agent”).
WHEREAS, on March 10, 2015, the Company and certain of its domestic direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”);
WHEREAS, the Company proposes to issue shares of New Common Stock (as defined below) pursuant to the order of the Bankruptcy Court, Case No. 15-110503, and under the Plan of Reorganization (as defined below) in connection with the reorganization of the Debtors under the Bankruptcy Code;
WHEREAS, the Company proposes to issue under the Plan of Reorganization, on the Effective Date (as defined below), warrants (the “Warrants”) to purchase, in the aggregate, that number of shares of New Common Stock equal to the Warrant Share Number, which number initially equals 12,727,273 shares of New Common Stock (such number being the “Initial Warrant Share Number” referred to herein), each Warrant initially entitling the Holder (as defined below) thereof to purchase one (1) share of New Common Stock, at the Exercise Price (as defined below), such Warrants being issued under the Plan of Reorganization to all holders of Subordinated Securities Claims (as defined below) and Existing Common Stock (as defined below) on a Pro Rata (as defined below) basis;
WHEREAS, the Warrants are being issued under, and upon the terms and conditions set forth in, the Plan of Reorganization in an offering in reliance on the exemption afforded by section 1145 of the Bankruptcy Code from the registration and prospectus delivery requirements of the Securities Act and of any applicable states securities or “blue sky” laws;
WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights and immunities of the Company, the Warrant Agent and the holders of the Warrants;
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, exercise and cancellation of the Warrants; and
WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms. As used in this Agreement, the following capitalized terms shall have the following respective meanings:
(a) “Accredited Investor” shall mean an “accredited investor” as such term is defined in Rule 501 under the Securities Act
(b) “Adjusted Equity Value” shall mean, on any Exercise Date, the sum of (i) the product of (A) all of the outstanding unsecured debt of the Debtors immediately prior to the Effective Date (including, but not limited to, (x) all principal and accrued and unpaid interest (including post-petition interest at the default rate) on the Notes, and (y) all other Unsecured Claims) and (B) 1.10, plus (ii) the aggregate amount of New Second Lien Convertible Notes (including all PIK Interest and accrued and unpaid interest) that were converted into shares of New Common Stock prior to 5:00 p.m. (New York City time) on such Exercise Date plus (iii) the aggregate amount of New Second Lien Convertible Notes (including all PIK Interest and accrued and unpaid interest) that is outstanding as of 5:00 p.m. (New York City time) on such Exercise Date. The Adjusted Equity Value with respect to any Exercise Date during any Liquidity Event Exercise Period shall be determined by treating any conversion, repayment or retirement of New Second Lien Convertible Notes that takes place in connection with such Liquidity Event as having occurred prior to 5:00 p.m. (New York City time) on such Exercise Date. As of the date of this Agreement, the Adjusted Equity Value is $504,200,000, which amount was calculated utilizing an estimated amount of Allowed Capital Lease Deficiency Claims equal to $10,200,000. After the amount of any estimated Allowed Capital Lease Deficiency Claim becomes known to the Reorganized Debtors, the Company shall recalculate the Adjusted Equity Value as of the date such amount becomes known based upon the actual amount of such Allowed Capital Lease Deficiency Claim and shall notify the Warrant Agent of the Adjusted Equity Value calculated utilizing such actual amount; provided, that until such time as the actual amount of a particular estimated Allowed Capital Lease Deficiency Claim becomes known to the Reorganized Debtors, the Adjusted Equity Value will be calculated utilizing the estimated amount of such Allowed Capital Lease Deficiency Claim included as part of the $10,200,000 amount referred to in the immediately preceding sentence.
(c) “Affiliate” shall mean, with respect to any Person, any other Person that (either directly or indirectly) controls, is controlled by, or is under direct or indirect common control with the specified Person. The term “control” includes the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(d) “Beneficial Holder” shall mean any Person that holds beneficial interests in a Global Warrant Certificate.
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(e) “Board” shall mean the Board of Directors of the Company.
(f) “Business Day” shall mean any day other than a Saturday, Sunday or other day on which the New York Stock Exchange is closed.
(g) “Certificate of Incorporation” shall mean the Second Amended and Restated Certificate of Incorporation of the Company, as amended, amended and restated, supplemented or otherwise modified and in effect from time to time,
(h) “Cheap Stock Factor” shall mean, on any Exercise Date, one (1), as the same may be adjusted from time to time pursuant to Section 5.1(c) prior to 5:00 p.m. (New York City time) on such Exercise Date.
(i) “Company” shall have the meaning set forth in the preamble until a successor Person shall have become such pursuant to the applicable provisions of this Agreement and thereafter “Company” shall mean such successor Person.
(j) “Consenting Noteholders” shall have the meaning set forth in the Plan of Reorganization.
(k) “Conversion Share Number” shall mean, on any Exercise Date, with respect to any conversion of the New Second Lien Convertible Notes, the number of shares of New Common Stock that were issued upon conversion of such New Second Lien Convertible Notes prior to 5:00 p.m. (New York City time) on such Exercise Date, as such number may be adjusted from time to time pursuant to Article V prior to 5:00 p.m. (New York City time) on such Exercise Date.
(l) “Converted Share Number” shall mean, on any Exercise Date, the sum of the respective Conversion Share Numbers as of such Exercise Date with respect to each conversion of New Second Lien Convertible Notes that has occurred prior to 5:00 p.m. (New York City time) on such Exercise Date.
(m) “Convertible Securities” shall mean any securities (directly or indirectly) convertible into or exchangeable for New Common Stock, but excluding Options.
(n) “Delivery Deadline” shall mean, with respect to exercise of any Warrant, the date that is five (5) Business Days after the applicable Exercise Date.
(o) “Effective Date” shall mean the date upon which all conditions precedent to the effectiveness of the Plan of Reorganization have been satisfied or are expressly waived in accordance with the terms thereof, as the case may be, and on which the transactions to occur on the Effective Date pursuant to the Plan of Reorganization become effective or are consummated.
(p) “Eligible Party” shall mean any entity in which, as of immediately after the corresponding Liquidity Event transaction, either (i) the Company’s stockholders as of immediately prior to such transaction and their Affiliates own, directly or indirectly (including by or through the Company or any other entity), an aggregate of 10% or less of the total voting power of the Voting Securities of such entity, or (ii) an aggregate of 90% or more of the total voting power of the Voting Securities of such entity is owned, directly or indirectly, by Persons that owned in the aggregate 5% or less of the total voting power of the Voting Securities of the Company as of immediately prior to such transaction or Affiliates of such Persons; provided, however, that this clause (ii) shall not apply if any of the Persons described in this clause (ii) are Liquidity Event Restricted Persons.
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(q) “Equity Committee” shall have the meaning set forth in the Plan of Reorganization.
(r) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(s) “Excluded Issuance” shall mean (i) issuances of the New Second Lien Convertible Notes and issuances of Securities upon conversion of the New Second Lien Convertible Notes, (ii) issuances of stock, Options and Convertible Securities to any Person in connection with the refinancing or repayment of the New Second Lien Convertible Notes (or of any indebtedness, debt securities or equity securities issued pursuant to any initial or successive refinancing of the New Second Lien Convertible Notes) so long as such stock, Options or Convertible Securities that are issued to such Person(s) are no more dilutive to the Warrants than the indebtedness, debt securities or equity securities being refinanced (except for increased dilution that results from (x) the principal or stated amount of the refinancing indebtedness, debt securities or equity securities being greater than the principal or stated amount of the indebtedness, debt securities or equity securities being refinanced on account of the repayment of accrued interest or dividends, premiums and fees and expenses in connection with such refinancing and (y) the refinancing indebtedness, debt securities or equity securities having a later maturity date than the indebtedness, debt securities or equity securities being refinanced), (iii) issuances of stock, Options and Convertible Securities upon exercise, conversion or exchange of any stock, Options and Convertible Securities that were issued in any issuance described in clause (i) or (ii) above, and (iv) issuances of any Securities pursuant to the Plan of Reorganization.
(t) “Exercise Date” shall mean, in connection with the exercise of any Warrant, any Business Day on or prior to the Expiration Date on which all conditions to due exercise of such Warrant specified in Article IV have been satisfied.
(u) “Exercise Deadline” shall mean 5:00 p.m. New York City time on the earlier of (i) the seven (7) year anniversary of the Effective Date and (ii) if a Liquidity Event occurs prior to the date specified in clause (i), the date that is the later of (x) the date that is twenty (20) Business Days after the Company delivers a Liquidity Event Notice in respect of such Liquidity Event to each Registered Holder at such Registered Holder’s address appearing on the Warrant Registrar in accordance with Section 10.2 and (y) the date that is three (3) Business Days prior to the date of consummation of such Liquidity Event.
(v) “Exercise Period” shall mean the period commencing on the Effective Date and ending at the Exercise Deadline.
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(w) “Exercise Price” shall mean, on any Exercise Date, the price per Warrant Share at the time of exercise of the Warrants, equal to the product of (i) the amount obtained by dividing (A) the Adjusted Equity Value on such Exercise Date by (B) the Total Share Number on such Exercise Date multiplied by (ii) the Cheap Stock Factor on such Exercise Date. Upon any adjustment from time to time to the Initial Share Number or any Conversion Share Number in accordance with Article V, the Exercise Price shall adjust automatically by virtue of, and in accordance with, the definition of Total Share Number.
(x) “Existing Common Stock” shall mean the common stock, par value $0.001 per share, of the Company outstanding immediately prior to the Effective Date.
(y) “Expiration Date” shall mean the day on which the Exercise Deadline occurs.
(z) “Fair Market Value” shall mean, on any date, the fair market value per share of New Common Stock as determined by the Board in good faith. In determining Fair Market Value of the New Common Stock, an orderly sale transaction between a willing buyer and a willing seller shall be assumed, without regard to the lack of liquidity of the New Common Stock due to any restrictions (contractual or otherwise) applicable thereto or any discount for minority interests and assuming full disclosure to the buyer of all relevant information and a reasonable period of time for effectuating such sale and assuming the sale of all of the issued and outstanding New Common Stock (including fractional interests) calculated on a fully diluted basis to include the conversion or exchange of all Securities then outstanding that are convertible into or exchangeable for New Common Stock and the exercise of all rights and warrants then outstanding and exercisable to purchase shares of New Common Stock or Securities convertible into or exchangeable for shares of New Common Stock; provided, that such assumption shall not include those Securities, rights and warrants (i) owned or held by or for the account of the Company or any of its direct or indirect subsidiaries, or (ii) convertible or exchangeable into New Common Stock where the conversion, exchange or exercise price per share is greater than the Fair Market Value. The Company shall not be required to obtain a fairness, valuation or other opinion in connection with any determination of Fair Market Value.
(aa) “Family Member” shall mean, with respect to any individual, (i) any Related Person of such individual or (ii) any trust the sole beneficiaries of which are such individual or one or more of such individual’s Related Persons.
(bb) “Governmental Authority” shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(cc) “Initial Share Number” shall mean, on any Exercise Date, the number of shares of New Common Stock that were issued and outstanding as of the Effective Date to the holders of Unsecured Claims (or 3,000,000 shares), as the same may be adjusted from time to time pursuant to Article V prior to 5:00 p.m. (New York City time) on such Exercise Date.
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(dd) “Initial Warrant Share Number” shall mean the product of (i) 60,000,000 (i.e., the Total Share Number on the Effective Date) multiplied by: (ii) the quotient of (A) 17.5 divided by (B) 82.5.
(ee) “Joinder Agreement” shall mean a joinder agreement to the Stockholders Agreement, the form of which is attached as an exhibit to the Stockholders Agreement.
(ff) “Liquidity Event” shall mean the consummation of:
(i) a sale, conveyance or disposition of all or substantially all of the assets of the Reorganized Debtors and any direct and/or indirect subsidiaries of the Company taken as a whole (including by or through the sale or other disposition of the outstanding capital stock or other outstanding equity interests of, or reorganization, merger, share exchange, consolidation or other business combination involving, any direct and/or indirect subsidiary or subsidiaries of the Company, if (A) substantially all of the assets of the Reorganized Debtors and any direct and/or indirect subsidiaries of the Company, taken as a whole, are held by such subsidiary or subsidiaries and (B) immediately after any such transaction either (1) the Company’s stockholders as of immediately prior to such transaction and their Affiliates own, directly or indirectly (including by or through the Company or any other entity), an aggregate of 10% or less of the total voting power of the Voting Securities of such subsidiary or subsidiaries, or (2) an aggregate of 90% or more of the total voting power of the Voting Securities of such subsidiary or subsidiaries is owned, directly or indirectly, by Persons that owned in the aggregate 5% or less of the total voting power of the Voting Securities of the Company as of immediately prior to such transaction or Affiliates of such Persons; provided, however, that this clause (2) shall not apply if any of the Persons described in this clause (2) are Liquidity Event Restricted Persons), in any case under this clause (i), to or with an Eligible Party;
(ii) a reorganization, merger, share exchange, consolidation or other business combination of the Company with or into any other entity in which transaction either (A) the Company’s stockholders as of immediately prior to such transaction and their Affiliates own, directly or indirectly, immediately after such transaction an aggregate of 10% or less of the total voting power of the Voting Securities of the Company or, if the Company is not the acquiring, resulting or surviving entity in such transaction, such other entity, or (B) Persons that owned in the aggregate 5% or less of the total voting power of the Voting Securities of the Company as of immediately prior to such transaction, or Affiliates of such Persons, own immediately after such transaction an aggregate of 90% or more of the total voting power of the Voting Securities of the Company or, if the Company is not the acquiring, resulting or surviving entity in such transaction, such other entity; provided, however, that this clause (B) shall not apply if any of the Persons described in this clause (B) are Liquidity Event Restricted Persons; or
(iii) the sale or other disposition (in one transaction or a series of related transactions) of outstanding Voting Securities of the Company representing in the aggregate 90% or more of the total voting power of the Voting Securities of the Company (after giving effect to such sale or other disposition) to any Person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) of Persons, but only if as of immediately following such sale or other disposition the Company would constitute an Eligible Party.
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For purposes of determining the Company’s stockholders as of immediately prior to any transaction that is described in clause (i), (ii) or (iii) above, if any such transaction is consummated through a series of related transactions (including a combination of different types or forms of transactions described in any of clauses (i), (ii) or (iii) above), then such determination shall be made as of immediately prior to the first transaction in such series of related transactions.
(gg) “Liquidity Event Exercise Period” shall mean, for any Liquidity Event, the period commencing on the date the Liquidity Event Notice in respect thereof is given pursuant to Section 4.2(c) and ending on the Exercise Deadline.
(hh) “Liquidity Event Restricted Person” shall mean any Person who is (i) a member, or has the right to appoint or designate a member, of the board of directors (or similar governing body) of the Reorganized Debtors or of any direct and/or indirect subsidiary of the Company, (ii) a member of management of the Reorganized Debtors or of any direct and/or indirect subsidiary of the Company, (iii) a Consenting Noteholder who owned Notes as of immediately prior to the Effective Date, or (iv) any Affiliate of any Person described in clause (i), (ii), or (iii).
(ii) “Management Incentive Plan” shall mean any management incentive plan that the Board implements that provides for the issuance of Options and/or other equity-based compensation to the management and directors of the Company.
(jj) “National Securities Exchange” shall mean any national securities exchange that is registered with the Securities Exchange Commission under Section 6(a) of the Exchange Act.
(kk) “New Common Stock” shall mean the class of common stock, $0.001 par value per share, authorized for issuance by the Company on the Effective Date.
(ll) “New Second Lien Convertible Note Indenture” shall mean the Indenture, dated as of the Effective Date, between the Company, as issuer, and Wilmington Trust, National Association, as trustee and collateral agent, as amended, supplemented or otherwise modified from time to time.
(mm) “New Second Lien Convertible Notes” shall mean those notes issued by the Company pursuant to the New Second Lien Convertible Note Indenture, as such notes may be amended, supplemented, amended and restated, modified, increased, replaced, reissued or extended from time to time.
(nn) “Notes” shall mean the 8.75% senior unsecured notes due 2019 issued by the Company pursuant to that certain indenture, dated as of May 25, 2012, between the Company and Computershare Trust Company of Canada, as trustee.
(oo) “Options” shall mean any warrants or other rights or options to subscribe for or purchase New Common Stock or Convertible Securities.
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(pp) “Person” shall mean any individual, firm, corporation, limited liability company, partnership, trust or other entity, and shall include any successor (by merger or otherwise) thereof or thereto.
(qq) “Per Warrant Share Number” shall mean, on any Exercise Date, the product of (i) the quotient of (A) the Warrant Share Number on such Exercise Date divided by (B) the Initial Warrant Share Number on such Exercise Date, multiplied by (ii) the quotient of (x) one (1) divided by (y) the Cheap Stock Factor on such Exercise Date. Upon any adjustment from time to time to the Initial Share Number or any Conversion Share Number in accordance with Article V, the Per Warrant Share Number shall adjust automatically by virtue of, and in accordance with, the definition of Total Share Number and, thus, the definition of Warrant Share Number.
(rr) “Petition Date” shall mean March 10, 2015.
(ss) PIK Interest” shall mean the interest on the New Second Lien Convertible Notes that is paid in kind.
(tt) “Plan of Reorganization” shall mean the Debtors’ joint chapter 11 plan of reorganization, as may be altered, amended, modified or supplemented from time to time in accordance with its terms, the Bankruptcy Code, the Bankruptcy Rules, the Amended and Restated Restructuring Support Agreement and the Exit Facility Commitment Letter (each as defined in the Plan of Reorganization), as finally approved by the Bankruptcy Court.
(uu) “Pro Rata” shall have the meaning set forth in the Plan of Reorganization.
(vv) “Qualified Institutional Buyer” shall mean a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
(ww) “Related Person” shall mean, with respect to any individual, any of such individual’s parents, spouse, siblings, children and grandchildren.
(xx) “Reorganized Debtors” shall mean, collectively, (i) the Company, (ii) Allied Nevada Gold Holdings LLC, (iii) Allied VGH Inc., (iv) Allied VNC Inc., (v) ANG Central LLC, (vi) ANG Cortez LLC, (vii) ANG Eureka LLC, (viii) ANG North LLC, (ix) ANG Northeast LLC, (x) ANG Pony LLC, (xi) Hasbrouck Production Company LLC, (xii) Hycroft Resources & Development, Inc., (xiii) Victory Exploration Inc., and (xiv) Victory Gold Inc., in each case, as reorganized under the Plan of Reorganization.
(yy) “Requisite Consenting Noteholders” shall have the meaning set forth in the Plan of Reorganization.
(zz) “Requisite Exit Facility Lenders” shall have the meaning set forth in the Plan of Reorganization.
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(aaa) “Restricted Person” shall mean (i) a holder of a Note as of immediately prior to the Effective Date (for so long as such Person continues to hold any equity securities or debt securities of the Reorganized Debtors), (ii) an Affiliate of any holder of a Note as of immediately prior to the Effective Date or of the Reorganized Debtors; provided, however, that any Person that acquires stock, Options or Convertible Securities at different times as part of a series of related transactions shall not be deemed an Affiliate of the Reorganized Debtors for purposes of any issuance of such stock, Options or Convertible Securities if such Person was not an Affiliate of the Reorganized Debtors immediately prior to the first transaction in such series of related transactions, and (iii) an employee, officer or director of any holder of a Note as of immediately prior to the Effective Date or of the Reorganized Debtors.
(bbb) “Securities” shall mean any instruments that constitute such under Section 2(a)(1) of the Securities Act, including the New Common Stock.
(ccc) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ddd) “Stockholders Agreement” shall mean the Stockholders Agreement, dated as of the date hereof, by and among the Company and the stockholders of the Company, as amended, supplemented, amended and restated, or otherwise modified from time to time.
(eee) “Subordinated Securities Claims” shall have the meaning set forth in the Plan of Reorganization.
(fff) “Total Share Number” shall mean, on any Exercise Date, the sum of (without duplication) (i) the Initial Share Number as of such Exercise Date, (ii) the Converted Share Number as of such Exercise Date and (iii) the number of shares of New Common Stock that are issuable upon full conversion of the amount of New Second Lien Convertible Notes outstanding as of 5:00 p.m. (New York City time) on such Exercise Date. The Total Share Number with respect to any Exercise Date (x) during any Liquidity Event Exercise Period shall be determined by treating any conversion, repayment or retirement of New Second Lien Convertible Notes that takes place during such Liquidity Event Exercise Period as having occurred prior to 5:00 p.m. (New York City time) on such Exercise Date and (y) shall be determined after giving effect to any adjustment to the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor pursuant to Sections 5.l(a), (b) or (c) the effective time for which is prior to or immediately after the open of business on such Exercise Date. For the avoidance of doubt, the Total Share Number shall not include any Warrant Shares. As of the date of this Agreement, the Total Share Number is 60,000,000.
(ggg) “Transfer” shall mean any direct or indirect sale, transfer, gift, hypothecation, pledge, assignment, devise or other disposition of Warrants (including the granting of any option or entering into any agreement for the future sale, transfer or other disposition of Warrants), whether voluntary or involuntary, whether of record, constructively or beneficially and whether by operation of law or otherwise.
(hhh) “Unsecured Claims” shall have the meaning set forth in the Plan of Reorganization.
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(iii) “Voting Securities” shall mean, with respect to any Person, the Securities of such Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person.
(jjj) “Warrant Share Number” shall mean, on any Exercise Date, the product of (i) the Total Share Number on such Exercise Date multiplied by (ii) the quotient of (A) 17.5 divided by (B) 82.5.
(kkk) “Warrant Shares” shall mean shares of New Common Stock or such other securities or property as shall be issuable upon exercise of Warrants as provided in Section 5.1(d).
Section 1.2 Table of Defined Terms.
Term | Section | |
Additional Shares of New Common Stock Agreement Appropriate Officer Bankruptcy Code Bankruptcy Court Cashless Exercise Company Debtors Delivery Deadline Depositary Exercise Amount Exercise Form Fundamental Change Funds Global Warrant Certificates Individual Warrants Individual Warrant Certificates Holder Liquidity Event Notice Recipient Registered Holder Warrants Warrant Agent Warrant Certificates Warrant Register Warrant Representative Compensation
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Section 5.1(c)(ii) Preamble Section 3.3(a) Recitals Recitals Section 4.4(b) Preamble Recitals Section 4.5(d) Section 3 .2(b) Section 4.5(a) Section 4.3(a) Section 5.1(d) Section 4.3(e) Section 3.2(a) Section 3.1 Section 3.2(a) Section 4.1 Section 4.2(d) Section 4.4(b) Section 3.4(d) Recitals Preamble Section 3.2(a) Section 3.4(b)
Section 9.2 |
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ARTICLE II
APPOINTMENT OF WARRANT AGENT
Section 2.1 Appointment. The Company hereby appoints the Warrant Agent to act as agent for the Company in respect of the Warrants upon the express terms and subject to the conditions herein set forth (and no implied terms), and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
ARTICLE III
WARRANTS
Section 3.1 Issuance of Warrants. On the terms and subject to the conditions of this Agreement and in accordance with the terms of the Plan of Reorganization, on the Effective Date the Company will issue Warrants to purchase Warrant Shares in an aggregate number equal to the Warrant Share Number, which number is subject to adjustment in accordance with the terms of this Agreement, to holders of Subordinated Securities Claims as of the Distribution Record Date (as defined in the Plan of Reorganization) and holders of Existing Common Stock as of the Distribution Record Date on a Pro Rata basis. As of the date of this Agreement, the Pro Rata portion of the Warrant Share Number of each holder of Subordinated Securities Claims or Existing Common Stock, expressed as a percentage, is as set forth on Appendix I hereto. On the Effective Date, the Company will deliver, or cause to be delivered to the Depositary, one or more Global Warrant Certificates evidencing a portion of the Warrants. On the Effective Date, the Company will deliver, or cause to be delivered, to the Registered Holders of the remainder of the Warrants (“Individual Warrants”) Individual Warrant Certificates evidencing such Individual Warrants. The Company shall promptly notify the Warrant Agent in writing upon the occurrence of the Effective Date and, if such notification is given orally, the Company shall confirm the same in writing on or prior to the Business Day next following. Until such notice is received by the Warrant Agent, the Warrant Agent may presume conclusively for all purposes that the Effective Date has not occurred.
Section 3.2 Form of Warrant.
(a) Subject to Section 6.1 of this Agreement, the Warrants shall be issued either (i) in certificated form in the form of one or more individual certificates (the “Individual Warrant Certificates”), with the forms of election to exercise and of assignment printed on the reverse thereof, in substantially the form set forth in Exhibit A-1 attached hereto, or (ii) in certificated form in the form of one or more global certificates (the “Global Warrant Certificates”), with the forms of election to exercise and of assignment printed on the reverse thereof, in substantially the form set forth in Exhibit A-2 attached hereto. The Individual Warrant Certificates and Global Warrant Certificates (collectively, the “Warrant Certificates”) may bear such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement, may have such letters, numbers or other marks of identification if required to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange.
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(b) The Global Warrant Certificates shall be deposited on or after the Effective Date with the Warrant Agent and registered in the name of Cede & Co., as the nominee of The Depository Trust Company (the “Depositary”), and held for the benefit of the Beneficial Holders thereof. Each Warrant Certificate shall represent such number of the outstanding Warrants as specified therein, and each shall provide that it shall represent the aggregate amount of outstanding Warrants from time to time endorsed thereon and that the aggregate amount of outstanding Warrants represented thereby may from time to time be reduced or increased, as appropriate, in accordance with the terms of this Agreement.
(c) Warrant Certificates shall represent, only whole numbers of Warrants.
Section 3.3 Execution of Warrant Certificates.
(a) The Warrant Certificates shall be signed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its Chief Financial Officer, any Vice President, its Treasurer or any other officer approved by the Board (each, an “Appropriate Officer”). Each such signature upon the Warrant Certificates may be in the form of a facsimile signature of any such Appropriate Officer and may be imprinted or otherwise reproduced on the Warrant Certificates and for that purpose the Company may adopt and use the facsimile signature of any Appropriate Officer.
(b) If any Appropriate Officer who shall have signed any of the Warrant Certificates shall cease to be such Appropriate Officer before the Warrant Certificates so signed shall have been countersigned by manual or facsimile signature of the Warrant Agent or delivered or disposed of by the Company, such Warrant Certificates nevertheless may be countersigned and delivered or disposed of as though such Appropriate Officer had not ceased to be such Appropriate Officer; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be an Appropriate Officer, although at the date of the execution of this Agreement any such person was not an Appropriate Officer.
Section 3.4 Registration and Countersignature.
(a) Upon receipt of a written order of the Company, the Warrant Agent shall, upon receipt of the Warrant Certificates duly executed on behalf of the Company, either manually or by facsimile signature countersign one or more Warrant Certificates evidencing Warrants and deliver such Warrant Certificates to or upon the written order of the Company. Such written order of the Company shall specifically state the number of Warrants that are to be issued as one or more Individual Warrant Certificates and the number of Warrants that are to be issued as one or more Global Warrant Certificates, and the Company is delivering such a written order to the Warrant Agent contemporaneously with its execution and delivery of this Agreement. A Warrant Certificate shall be, and shall remain, subject to the provisions of this Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been cancelled in accordance with the terms hereof.
(b) No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been either manually or by facsimile signature countersigned by the manual or facsimile signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that such Warrant Certificate so countersigned has been duly issued hereunder.
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(c) The Warrant Agent shall keep, at an office designated for such purpose, books (the “Warrant Register”) in which, subject to such reasonable regulations as it may prescribe, it shall register the Warrant Certificates and exchanges and transfers of outstanding Warrants in accordance with the procedures set forth in Section 6.1 of this Agreement, all in form satisfactory to the Company and the Warrant Agent. Subject to Section 8.1, no service charge shall be made for any exchange or registration of transfer of the Warrants, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other charge that may be imposed on the Registered Holder in connection with any such exchange or registration of transfer. Notwithstanding anything in this Agreement to the contrary, the Warrant Agent shall have no obligation to take any action whatsoever with respect to an exchange or registration of transfer of Warrants unless and until it is reasonably satisfied that all such payments required by the immediately preceding sentence have been made.
(d) Prior to due presentment for registration of transfer or exchange of any Warrant Certificate evidencing any Warrant in accordance with the procedures set forth in this Agreement, the Company and the Warrant Agent may deem and treat the Person in whose name any Warrant is registered upon the Warrant Register (the “Registered Holder” of such Warrant) as the absolute owner of such Warrant (notwithstanding any notation of ownership or other writing on a Warrant Certificate made by anyone), for the purpose of any exercise thereof, any distribution in respect thereof and for all other purposes, and neither the Warrant Agent nor the Company shall be affected by notice to the contrary.
Section 3.5 Legends. Each Warrant Certificate originally issued to a Holder, or issued upon registration of transfer of, or upon exchange for or in lieu of, any Warrant Certificate shall bear or shall be deemed to bear (even if such certificate does not actually bear such legends) (and the Warrants evidenced thereby shall be subject to the restrictions set forth in) the following legends:
“THIS WARRANT HAS BEEN, AND THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 1145 OF CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”). THE WARRANTS AND SUCH WARRANT SHARES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(B) OF THE BANKRUPTCY CODE. IF THE HOLDER IS DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(B) OF THE BANKRUPTCY CODE, THEN THE SECURITIES MAY ONLY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UPON REGISTRATION UNDER THE SECURITIES ACT OR RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO HYCROFT MINING CORPORATION (THE “COMPANY”) AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, AND OF ANY APPLICABLE STATE SECURITIES LAWS.
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THIS WARRANT IS SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THAT CERTAIN WARRANT AGREEMENT, DATED AS OF OCTOBER 22, 2015 (THE “WARRANT AGREEMENT”), BETWEEN THE COMPANY AND THE WARRANT AGENT NAMED THEREIN. NO REGISTRATION OF TRANSFER OF THIS WARRANT WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS WARRANT A COPY OF THE WARRANT AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF THIS WARRANT, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT ARE SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THE COMPANY’S CERTIFICATE OF INCORPORATION AND A STOCKHOLDERS AGREEMENT MADE AS OF OCTOBER 22, 2015, TO WHICH THE COMPANY AND ALL STOCKHOLDERS ARE PARTY. NO REGISTRATION OF TRANSFER OF THESE WARRANT SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF RECORD OF THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT A COPY OF THE CERTIFICATE OF INCORPORATION AND THE STOCKHOLDERS AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF STOCK, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.”
Each Holder shall be deemed to have actual knowledge of the terms, provisions, restrictions and conditions set forth in this Agreement (including, without limitation, the restrictions on Transfer set forth in Article VI hereof) for all purposes of this Warrant Agreement and applicable law (including, without limitation, the Delaware General Corporation Law and the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction), whether or not any certificate evidencing Warrants owned or held by such Holder bears the legends set forth in this Section 3.5 or whether or not any such Holder received a separate notice of such terms, provisions, restrictions and conditions.
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ARTICLE IV
TERMS AND EXERCISE OF WARRANTS
Section 4.1 Exercise Price. From time to time on any Business Day during the Exercise Period, each Warrant shall entitle (i) in the case of Individual Warrants, the Registered Holder thereof and (ii) in the case of Warrants held through the book-entry facilities of the Depositary or by or through Persons that are direct participants in the Depositary, the Beneficial Holder thereof (any Registered Holder or Beneficial Holder described in clause (i) or clause (ii), a “Holder”), subject to the provisions of such Warrant and of this Agreement, to purchase from the Company (and the Company shall issue and sell to each Holder) a number of Warrant Shares equal to the Per Warrant Share Number on such Exercise Date at a purchase price per Warrant Share equal to the Exercise Price on such Exercise Date.
Section 4.2 Exercise Period; Expiration Date; Liquidity Event.
(a) All or any whole number of Warrants may be exercised in accordance with Section 4.3 below by the Holder thereof at any time and from time to time during the Exercise Period. Any Warrant not exercised prior to the Exercise Deadline shall (i) not be exercisable after the Exercise Deadline (such right to exercise being deemed permanently and irrevocably waived following the Exercise Deadline), (ii) become permanently and irrevocably null and void at the Exercise Deadline, and all rights thereunder and all rights in respect thereof under this Agreement shall cease and terminate at such time, and (iii) not entitle the Holder thereof to any distribution, payment or other amount on or in respect thereof.
(b) Any solicitation, negotiation or closing of a Liquidity Event shall be subject to the sole and absolute discretion of the Company and the holders of New Common Stock. The Company and/or holders of New Common Stock will determine in their sole discretion whether to effect or consummate a Liquidity Event.
(c) The Company shall use commercially reasonable efforts to provide at least ten (10) Business Days prior written notice to all Registered Holders in accordance with Section 10.2 of any Liquidity Event (a “Liquidity Event Notice”) (and that Cashless Exercise may be elected with respect thereto). If the Company uses commercially reasonable efforts to deliver such notice, then any failure of the Company to deliver such notice shall not in any way impair or affect the validity of any Liquidity Event or the expiration of Warrants on the Expiration Date. Any Liquidity Event Notice may (but shall not be required to) specify conditions to which consummation of the Liquidity Event is subject and, in any event, shall not give rise to any obligation of the Company or any holders of New Common Stock to consummate, or assist in the consummation of, such Liquidity Event.
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Section 4.3 Method of Exercise.
(a) Subject to the provisions of the Warrants and this Agreement, a Holder may exercise such Holder’s right to purchase the Warrant Shares as to all or any whole number of Warrants, no later than the Exercise Deadline, by (i)(x) in the case of Persons who hold Individual Warrants, providing an exercise form for the election to exercise such Warrant (“Exercise Form”) substantially in the form of Exhibit B-1 hereto, properly completed and duly executed by the Registered Holder thereof, and, in the case of an exercise for cash pursuant to Section 4.5(a), providing payment of the Exercise Amount, to the Warrant Agent, and (y) in the case of Warrants evidenced by a Global Warrant Certificate held through the book-entry facilities of the Depositary or by or through Persons that are direct participants in the Depositary, providing an Exercise Form substantially in the form of Exhibit B-2 hereto, properly completed and duly executed by the Beneficial Holder thereof, and, in the case of an exercise for cash pursuant to Section 4.5(a), providing payment of the Exercise Amount, to its broker for further distribution to the Warrant Agent, and causing the exercising participant whose name appears on a securities position listing of the Depositary as the holder of such interest in such Warrants held through the Depositary to comply with the Depositary’s procedures relating to the exercise of such interest in such Warrants held through the Depositary, and (ii) delivering to the Warrant Agent a Joinder Agreement that has been duly executed and delivered by the Recipient of the Warrant Shares issuable upon exercise of such Warrants.
Upon any exercise of Warrants held through the Depositary as specified in clause (y) of the preceding paragraph, the Warrant Agent shall cause, in accordance with the standing instructions and procedures existing between the Depositary and the Warrant Agent, the number of Warrants represented by the Global Warrant Certificate to be reduced by the number of Warrants so exercised.
(b) Any exercise of a Warrant pursuant to the terms of this Agreement shall be irrevocable and shall constitute a binding agreement between the Holder and the Company, enforceable in accordance with its terms; provided, however, that if such exercise is made in connection with a Liquidity Event, such exercise shall be deemed conditioned on the consummation of such Liquidity Event.
(c) The Warrant Agent shall:
(i) examine all Exercise Forms and all other documents delivered to it by or on behalf of Holders as contemplated hereunder to ascertain whether or not, on their face, such Exercise Forms and any such other documents have been executed and completed in accordance with their terms and the terms hereof;
(ii) where an Exercise Form or other document appears on its face to have been improperly completed or executed or some other irregularity in connection with the exercise of the Warrants exists, endeavor to inform the appropriate parties (including the Person submitting such Exercise Form or other document) of the need for fulfillment of all requirements, specifying those requirements which appear to be unfulfilled;
(iii) inform the Company of and cooperate with and assist the Company in resolving any reconciliation problems between Exercise Forms received and the delivery of Warrants to the Warrant Agent’s account;
(iv) advise the Company, no later than five (5) Business Days after receipt of an Exercise Form, of (A) the receipt of such Exercise Form and the number of Warrants exercised in accordance with the terms and conditions of this Agreement, (B) the instructions with respect to delivery of the Warrant Shares deliverable upon such exercise, subject to timely receipt from the Depositary of the necessary information and (C) such other information as the Company shall reasonably require;
(v) if requested by the Company and provided with the Warrant Shares and all other necessary information, liaise with the Depositary and endeavor to deliver the Warrant Shares to the relevant accounts at the Depositary in accordance with its customary requirements; and
(vi) account promptly to the Company with respect to Warrants exercised and promptly deposit all monies received by the Warrant Agent for the purchase of Warrant Shares through the exercise of Warrants in the account of the Company maintained with the Warrant Agent for such purpose.
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(d) The Company reserves the right to reasonably reject any and all Exercise Forms that are not in proper form in any material respect (including if an Exercise Form specifies delivery of Warrant Shares to an Improper Recipient) and the Company shall not incur any liability for any such rejection. Such determination by the Company shall be final and binding on the Holders, absent manifest error. Moreover, the Company reserves the absolute right to waive any of the conditions to the exercise of Warrants or defects in Exercise Forms with regard to any particular exercise of Warrants. The Company shall give prompt written notice of rejection to each Holder whose Exercise Form is rejected in accordance with the first sentence of this Section 4.3(d). Subject to the immediately preceding sentence, neither the Company nor the Warrant Agent shall be under any duty to give notice to the Holders of any irregularities in any exercise of Warrants, nor shall it incur any liability for the failure to give such notice.
(e) All funds received by Computershare under this Agreement that are to be distributed or applied by Computershare in the performance of its services and obligations hereunder (the “Funds”) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to the terms of this Agreement, Computershare will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. Any interest, dividends or other earnings in connection with such deposits shall be held in such bank accounts and shall constitute and form a part of the Funds.
(f) The Warrant Agent shall forward Funds received for Warrant exercises in a given month by the 5th Business Day of the following month by wire transfer to an account designated by the Company.
(g) In the event of a cash exercise of Warrants, the Company hereby instructs the Warrant Agent to record cost basis for Warrant Shares issued pursuant to such cash exercise at the time of such exercise.
(h) In the event of a Cashless Exercise, the Company s hall provide cost basis for Warrant Shares issued pursuant to such Cashless Exercise at the time the Company provides the Cashless Exercise ratio to the Warrant Agent pursuant to this Article IV.
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Section 4.4 Issuance of Shares of New Common Stock.
(a) Upon exercise of any Warrants pursuant to Section 4.3, the delivery to the Warrant Agent of a Joinder Agreement that has been duly executed and delivered by the applicable Recipient and, if applicable, clearance of the funds in payment of the Exercise Amount, the Company shall promptly at its expense, and in no event later than the applicable Delivery Deadline, calculate and cause to be issued to or upon the order of the Holder of such Warrants the total number of whole Warrant Shares for which such Warrants are being exercised:
(i) in the case of a Beneficial Holder who holds the Warrants being exercised through the Depositary’s book-entry transfer facilities, by same-day or next-day credit to the Depositary for the account of such Beneficial Holder or for the account of a participant in the Depositary the number of Warrant Shares to which such Person is entitled, in each case registered in such name and delivered to such account as directed in the Exercise Form by such Beneficial Holder or by the direct participant in the Depositary through which such Beneficial Holder is acting, or
(ii) in the case of a Registered Holder who holds the Warrants being exercised, a book-entry interest in the shares of New Common Stock registered on the books of the Company’s transfer agent or, at the Registered Holder’s option, by delivery to the address designated by such Registered Holder on its Exercise Form of a physical certificate representing the number of Warrant Shares to which such Registered Holder is entitled, in fully registered form, registered in such name or names as may be directed by such Registered Holder; provided, however, that (x) no Exercise Form shall specify that Warrant Shares be delivered to, or for the account of, any Person to whom the Holder would not have been permitted to sell or otherwise transfer Warrants pursuant to Section 6.1(g) (any such Person, an “Improper Recipient”) and (y) if any exercise of a Warrant is made during a Liquidity Event Exercise Period and all shares of New Common Stock are to be cancelled, terminated or exchanged in connection with the applicable Liquidity Event, then the Company may, at its option, elect not to issue Warrant Shares to the Recipient so long as appropriate 16 provision is made such that the Recipient receives the cash, securities or other property that the Recipient would have received in connection with such Liquidity Event if it held the Warrant Shares for which such Warrants are being exercised (but the Recipient shall be deemed to be bound by the terms and provisions of the Stockholders Agreement and the Certificate of Incorporation, including the terms and provisions set forth in Article III of the Stockholders Agreement and Section 7 of the Certificate of Incorporation).
(b) As to any Warrant that has been properly and timely exercised, the Holder of such Warrant or the Person directed by such Holder as specified in Section 4.4(a) (which shall not be an Improper Recipient) (the “Recipient”) shall be deemed to be the holder of record of the Warrant Shares issuable upon exercise of such Warrant as of immediately prior to 5:00 p.m. (New York City time) on the applicable Exercise Date. At such time, subject to Section 5.1(i), the Warrant Shares issuable upon such exercise as provided in Section 4.5 shall be deemed to have been issued and, for all purposes of this Agreement, the Recipient shall, as between such Person and the Company, be deemed to be and entitled to all rights of the holder of record of such Warrant Shares, subject to the terms of the Stockholders Agreement and the Certificate of Incorporation. Warrants may not be exercised by, or securities issued to, any Holder in any state in which such exercise or issuance would be unlawful.
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Section 4.5 Exercise of Warrant
(a) Right to Exercise by Cash Payment. Warrants may be exercised by the Holders thereof at any time and from time to time during the Exercise Period by delivery of payment to the Warrant Agent, for the account of the Company, in cash by personal check payable to the order of the Company (or as otherwise agreed to by the Company), in lawful money of the United States of America, of the full Exercise Price for the number of Warrant Shares specified in the Exercise Form (which shall be equal to the Exercise Price on the Exercise Date multiplied by the product of the number of Warrants being exercised and the Per Warrant Share Number on such Exercise Date and, to the extent required by Section 8.1 hereof, any and all applicable taxes and charges due in connection with the exercise of Warrants and the exchange of Warrants for Warrant Shares (the “Exercise Amount”)).
(b) Cashless Exercise. In lieu of exercising Warrants by cash payment pursuant to Section 4.5(a), Holders may exercise Warrants for Warrant Shares as provided in this Section 4.5(b) (a “Cashless Exercise”) at any time and from time to time prior to the Exercise Deadline only (i) during a Liquidity Event Exercise Period; provided, however, that any such Cashless Exercise during a Liquidity Event Exercise Period shall be subject to, and conditioned upon, the consummation of such Liquidity Event, or (ii) if on the applicable Exercise Date the Warrant Shares are then listed for trading on a National Securities Exchange, by the surrender in the case of each of clause (i) and clause (ii), to the Warrant Agent of a duly executed and properly completed Exercise Form marked to reflect election of a Cashless Exercise with respect to a specified number of Warrants. Upon a Cashless Exercise with respect to a particular number of Warrants and elected on the Exercise Form, the Company shall calculate and, subject to the terms of Section 4.4, deliver or cause to be delivered to the Holder (without delivery by the Holder of any Exercise Amount or any cash or other consideration (except to the extent set forth in Section 8.1)) that number of fully paid and non-assessable Warrant Shares (subject to the provisions of Section 4.7) equal to the quotient obtained by dividing (x) the value of such Warrants on the Exercise Date to which the Exercise Form relates, which value shall be determined by subtracting (A) the aggregate Exercise Amount of the Warrant Shares immediately prior to the Cashless Exercise from (B) the aggregate Fair Market Value of the Warrant Shares issuable upon exercise of such Warrants on the Exercise Date to which the Exercise Form relates by (y) the Fair Market Value of one Warrant Share on the Exercise Date to which the Exercise Form relates. Expressed as a formula, such Cashless Exercise shall be computed as follows:
Where: | X = | the number of Warrant Shares issuable to the Holder in respect of such Cashless Exercise |
Y = | the Fair Market Value of one Warrant Share on the Exercise Date to which the Exercise Form relates |
A = | the aggregate Exercise Amount for the Warrants as to which Cashless Exercise has been elected (i.e., the Exercise Price on the applicable Exercise Date multiplied by the product of the number of such Warrants as to which Cashless Exercise has been elected and the Per Warrant Share Number on the applicable Exercise Date, plus, to the extent required by Section 8.1 hereof, any and all applicable taxes and charges due in connection with the exercise of the applicable Warrants and the exchange of such Warrants for Warrant Shares) |
B = | the aggregate Fair Market Value of the Warrant Shares as to which Cashless Exercise has been elected (i.e., Fair Market Value of one Warrant Share on the applicable Exercise Date multiplied by the product of the number of Warrants as to which Cashless Exercise has been elected and the Per Warrant Share Number on the applicable Exercise Date) |
If the foregoing calculation results in a negative number, then no Warrant Shares shall be issuable upon Cashless Exercise by the applicable Holder.
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(c) Determination of the Number of Shares of New Common Stock to be Issued. The number of Warrant Shares to be issued on each Cashless Exercise of Warrants will be determined by the Company (with written notice thereof to the Warrant Agent) using the formula set forth in this Section 4.5. The Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company’s determination of the number of Warrant Shares to be issued on such exercise, pursuant to this Section 4.5, is accurate or correct.
Section 4.6 Reservation of Shares. The Company covenants that, prior to the Exercise Deadline, the Company will at all times reserve and keep available, from its authorized and unissued New Common Stock solely for issuance and delivery upon the exercise of the Warrants and free of preemptive rights, such number of Warrant Shares and other securities, cash or property as from time to time shall be issuable upon the exercise in full of all outstanding Warrants. The Company further covenants that it shall, from time to time, use commercially reasonable efforts to take all steps necessary to increase the authorized number of shares of New Common Stock if at any time the authorized number of shares of New Common Stock remaining unissued would otherwise be insufficient to allow delivery of all the Warrant Shares then deliverable upon the exercise in full of all outstanding Warrants. The Company covenants that all Warrant Shares issuable upon exercise of the Warrants will, upon issuance, be validly issued, fully paid and non-assessable, free and clear of all taxes (subject to Section 8.1), liens, security interests, charges and other encumbrances or restrictions of any kind (other than (x) restrictions set forth in the Stockholders Agreement, (y) restrictions set forth in the Certificate of Incorporation and (z) any applicable restrictions under federal and state securities laws) and free and clear of all preemptive rights or similar rights of stockholders, and the Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue all Warrant Shares in compliance with this sentence. The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic stock exchange upon which Warrant Shares may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). The Company covenants that all Warrant Shares will, at all times that Warrants are exercisable, be duly approved for listing subject to official notice of issuance on each securities exchange, if any, on which the Warrant Shares are then listed. The Company covenants that the stock certificates, if any, issued to evidence any Warrant Shares issued upon exercise of Warrants will comply with applicable law.
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Section 4.7 Fractional Shares. If any exercise of a Warrant results in a fraction of a share of New Common Stock, the Company shall have the option, in its sole discretion, to elect to make a cash payment in respect of such fractional share in lieu of issuing such fractional share. If the Company elects to make such a cash payment, the Company shall notify the Warrant Agent in writing of the amount to be paid in lieu of the fraction of a share of New Common Stock and concurrently pay or provide to the Warrant Agent for payment to the Holder of the Warrant an amount in cash equal to the product of (a) such fraction of a share of New Common Stock and (b) the Fair Market Value of a share of New Common Stock on the applicable Exercise Date. All shares of New Common Stock issuable upon exercise of more than one Warrant by a Holder thereof shall be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. Computershare shall have no obligation to make any cash payments in respect of fractional shares under this Section unless the Company shall have provided the necessary funds to pay in full all amounts due and payable with respect thereto.
Section 4.8 Redemption. The Warrants shall not be redeemable by the Company or any other Person.
ARTICLE V
ADJUSTMENT OF WARRANT SHARES AND OF EXERCISE PRICE
The Initial Share Number and any Conversion Share Number and the Cheap Stock Factor (and, thus, by virtue of and in accordance with the definitions thereof, the Exercise Price and the Per Warrant Share Number) shall be subject to adjustment from time to time upon the happening of certain events as provided in this Article V.
Section 5.1 Mechanical Adjustments.
(a) If at any time prior to the exercise in full of the Warrants, the Company shall pay or declare a dividend or make a distribution on the New Common Stock payable in shares of New Common Stock (other than a dividend or distribution upon a Fundamental Change to which Section 5.1(d) applies), then the Initial Share Number and any Conversion Share Number in effect at the open of business on the day after the record date of such event shall be adjusted upward by multiplying (i) the Initial Share Number or such Conversion Share Number, as applicable, in effect at the open of business on the day after the record date of such event by (ii) a fraction the numerator of which is the total number of shares of New Common Stock a holder of one share of New Common Stock would hold immediately after such event as a result of such event and the denominator of which is one, such that the resulting adjustment reflects a proportionate increase to the Initial Share Number or any Conversion Share Number, as applicable. Any adjustment required by this Section 5.1(a) shall be made immediately after the open of business on the day after the record date of such event, whenever any event in this Section 5.1(a) shall occur. If any dividend or distribution of the type described in this Section 5.1(a) is declared or authorized but not so paid or made, the Initial Share Number and any Conversion Share Number shall again be adjusted to the Initial Share Number and the Conversion Share Number that would then be in effect if such dividend or distribution had not been so declared or authorized.
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(b) If at any time prior to the exercise in full of the Warrants, the Company shall (i) subdivide, split, reclassify or recapitalize its outstanding New Common Stock into a greater number of shares of New Common Stock, or (ii) combine, reclassify or recapitalize its outstanding New Common Stock into a smaller number of shares of New Common Stock, then the Initial Share Number and any Conversion Share Number in effect at the open of business on the day after the record date of such event shall be adjusted (either upward or downward, as the case may be) by multiplying (x) the Initial Share Number or such Conversion Share Number, as applicable, in effect at the open of business on the day after the record date of such event by (y) a fraction the numerator of which is the total number of shares of New Common Stock a holder of one share of New Common Stock would hold immediately after such event as a result of such event and the denominator of which is one, such that the resulting adjustment reflects a proportionate increase or decrease, as applicable, to the Initial Share Number or Conversion Share Number, as applicable. Any adjustment required by this Section 5.1(b) shall be made immediately after the open of business on the day after the record date of such event, whenever any event in this Section 5.1(b) shall occur. If any subdivision, split, reclassification, recapitalization or combination of the type described in this Section 5.1(b) is declared or authorized but not so paid or effected, the Initial Share Number or Conversion Share Number, as applicable, shall again be adjusted to the Initial Share Number or Conversion Share Number, as applicable, that would then be in effect if such subdivision, split, reclassification, recapitalization or combination had not been so declared or authorized.
(c) (i) In the event the Company at any time or from time to time after the Effective Date shall issue Additional Shares of New Common Stock (including Additional Shares of New Common Stock deemed to be issued pursuant to Section 5.1(c)(iv)) without consideration or for consideration per share less than the Fair Market Value of the New Common Stock on the date of, and immediately prior to, such issuance or, if such Additional Shares of New Common Stock are issued (or, pursuant to Section 5.1(c)(iv), deemed to be issued) to a Restricted Person, the Exercise Price in effect on the date of, and immediately prior to, such issuance, then the Cheap Stock Factor shall be reduced, concurrently with such issuance, by multiplying (x) the Cheap Stock Factor then in effect by (y) a fraction, (A) the numerator of which shall be the sum of (I) the number of shares of New Common Stock outstanding immediately prior to such issuance plus (II) the number of shares of New Common Stock which the aggregate consideration received by or payable to the Company for the total number of Additional Shares of New Common Stock so issued would purchase at the Fair Market Value of the New Common Stock on the date of, and immediately prior to, such issuance or, if such Additional Shares of New Common Stock are issued (or, pursuant to Section 5.1(c)(iv), deemed to be issued) to a Restricted Person, the Exercise Price in effect on the date of, and immediately prior to, such issuance, and (B) the denominator of which shall be the sum of (I) number of shares of New Common Stock outstanding immediately prior to such issuance plus (II) the number of Additional Shares of New Common Stock so issued. For purposes of the above calculation, the number of shares of New Common Stock outstanding immediately prior to such issuance shall be calculated on a fully diluted basis, as if all outstanding Convertible Securities had been fully converted into shares of New Common Stock and any outstanding Options had been fully exercised (and the resulting securities fully converted into shares of New Common Stock, if so convertible) as of such date; provided, that any stock, Convertible Securities or Options owned or held by or for the account of the Company or any of its direct or indirect subsidiaries shall not be included in such calculation.
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(ii) For purposes of this Section 5.1(c), the “Additional Shares of New Common Stock” shall mean all shares of New Common Stock issued (or, pursuant to Section 5.1(c)(iv), deemed to be issued) by the Company after the Effective Date, other than:
(A) Shares of New Common Stock or other Securities issued or issuable upon exercise of Warrants; or
(B) shares of New Common Stock issued or issuable in a dividend or distribution to which Section 5.1(a) applies, in a subdivision, split, reclassification or recapitalization to which Section 5.1(b) applies, or a merger, consolidation or sale of substantially all assets to which Section 5.1(d) applies;
(C) any Excluded Issuance; or
(D) shares of New Common Stock issued or issuable in an issuance for which adjustment of the Cheap Stock Factor has previously been made pursuant to Section 5.1(c)(i).
(iii) Notwithstanding any provision herein to the contrary, no adjustment in the Cheap Stock Factor shall be made in respect of the issuance of Additional Shares of New Common Stock unless the consideration per share (determined pursuant to Section 5.1(c)(v) hereof) for an Additional Share of New Common Stock issued or deemed to be issued by the Company is less than either (x) the Fair Market Value of the New Common Stock on the date of such issuance or (y) if, and only if, such Additional Shares of New Common Stock are issued (or, pursuant to Section 5.1(c)(iv), deemed to be issued) to a Restricted Person, the Exercise Price in effect on the date of, and immediately prior to, such issuance.
(iv) In the event the Company at any time or from time to time after the Effective Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities then entitled to receive any such Options or Convertible Securities, then the maximum number of shares (as set forth in the instrument relating thereto without regard to any provisions contained therein designed to protect against dilution) of New Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of New Common Stock issued (x) as of the time of such issuance or, in case such a record date shall have been fixed, as of the close of business on such record date and (y) to the Persons to which such Options or Convertible Securities are issued or, in case such a record date shall have been fixed, such holders of record; provided, that in any such case in which Additional Shares of New Common Stock are deemed to be issued:
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(A) no further adjustments in the Cheap Stock Factor shall be made upon the subsequent issue of shares of New Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities (or, in the case of Options for the purchase of Convertible Securities, the subsequent issue of the Convertible Securities or the shares of New Common Stock issuable upon conversion or exchange thereof);
(B) if such Options or Convertible Securities by their terms (other than terms designed to protect against dilution) provide, with the passage of time or otherwise, for any increase or decrease in the consideration payable to the Company, or increase or decrease in the number of shares of New Common Stock issuable, upon the exercise, conversion or exchange thereof, the Cheap Stock Factor computed upon the original issuance thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; provided, however, that no such adjustment of the Cheap Stock Factor shall apply to New Common Stock previously issued upon exercise of any Warrants;
(C) on the expiration, termination or surrender of any such Options or Convertible Securities, any previous adjustment to the Cheap Stock Factor shall be rescinded and annulled and the Cheap Stock Factor shall be readjusted to the Cheap Stock Factor that would have been obtained had the adjustment made upon the issuance of such Options or Convertible Securities (or upon the occurrence of a record date with respect thereto) been made upon the basis of the issuance of only the number of shares of New Common Stock actually issued upon the exercise, conversion or exchange of such Options or Convertible Securities; provided, however, that no such adjustment of the Cheap Stock Factor shall apply to shares of New Common Stock previously issued upon exercise of any Warrants; and
(D) no readjustment pursuant to clause (B) or clause (C) above shall have the effect of increasing the Cheap Stock Factor to an amount that exceeds the initial Cheap Stock Factor on the Effective Date.
(v) For purposes of this Section 5.1(c), the consideration received by or payable to the Company in connection with the issuance of any Additional Shares of New Common Stock shall be computed as follows:
(A) Such consideration shall:
(1) insofar as it consists of cash, be computed at the aggregate amount of cash received by or payable to the Company therefor prior to deducting therefrom any discounts, commissions or other expenses allowed, paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof;
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(2) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issuance, as determined in good faith by the Board (irrespective of any accounting treatment), except where such consideration consists of securities that are listed on a National Securities Exchange or quoted on the Nasdaq Stock Market in which case the amount of consideration received by or payable to the Company shall be the daily volume-weighted average price of such securities (as reflected on such National Securities Exchange or quoted by the Nasdaq Stock Market) for the ten (10) consecutive Business Days immediately preceding the date of receipt of such securities; and
(3) in the event Additional Shares of New Common Stock are issued together with other securities or property of the Company for consideration which covers both the Additional Shares of New Common Stock and such other securities or property, be the proportion of such consideration so received in respect of the Additional Shares of New Common Stock, computed as provided in clauses (1) and (2) above, as determined in good faith by the Board (irrespective of any accounting treatment).
(B) The consideration per share received by or payable to the Company for Additional Shares of New Common Stock deemed to have been issued pursuant to Section 5.1(c)(iv) relating to Options and Convertible Securities shall be determined by dividing:
(1) the total amount, if any, received by or payable to the Company as consideration for the issuance of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein designed to protect against dilution) received by or payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by
(2) the maximum number of shares of New Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein designed to protect against dilution) issuable upon the exercise of such Options or conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.
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(d) If (i) the Company shall be a party to or otherwise engage in any transaction or series of related transactions constituting (x) a merger of the Company into, a consolidation of the Company with, or a sale of all or substantially all of the Company’s assets to, any other Person, or (y) any merger of another Person into the Company in which, in the case of clause (x) or clause (y), the previously outstanding shares of New Common Stock shall be cancelled, reclassified or converted or changed into or exchanged for securities of the Company or other property (including cash) or any combination of the foregoing; and (ii) such transaction or series of related transactions is not a Liquidity Event (any such transaction or series of related transactions, a “Fundamental Change”), the Holder of each Warrant outstanding immediately prior to the occurrence of such Fundamental Change will have the right upon any subsequent exercise (and payment of the applicable Exercise Price) to receive (but only out of legally available funds, to the extent required by applicable law) the kind and amount (subject to the proviso of this sentence) of stock, other securities, cash and assets that such Holder would have received if such Warrant had been exercised pursuant to the terms hereof immediately prior thereto (assuming such Holder failed to exercise his rights of election, if any, as to the kind or amount of stock, securities, cash or other property receivable upon such Fundamental Change); provided, however, that the amount of such stock, other securities, cash and assets that would be received upon exercise of a Warrant following the consummation of such Fundamental Change shall be calculated on the applicable Exercise Date in a manner consistent with, and on terms as nearly as equivalent as practicable to, the provisions of Section 1.1(qq) and Section 4.1 with respect to the aggregate consideration received by the holders of shares of New Common Stock in such Fundamental Change. Upon each Fundamental Change, appropriate adjustment shall be deemed to be made with respect to the Holders’ rights under this Agreement, including, without limitation, with respect to the kind and amount of stock, securities, cash or assets thereafter acquirable upon exercise of each Warrant, such that the provisions of this Agreement shall thereafter be applicable, as nearly as possible, to any shares of stock, securities, cash or assets thereafter acquirable upon exercise of each Warrant, and the Company shall notify the Warrant Agent of any such adjustments promptly following the consummation of such Fundamental Change. The provisions of this Section 5.1(d) shall similarly apply to successive Fundamental Changes. The Company shall not effect any Fundamental Change unless, prior to the consummation thereof, the successor Person (if the Company is not the surviving or resulting Person from such Fundamental Change) shall assume, by written instrument substantially similar in form and substance to this Agreement, the obligation to deliver to the Holders such shares of stock, securities, cash or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of each Warrant.
(e) Whenever (i) the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor is adjusted pursuant to Section 5.1(a), (b) or (c) (but subject to the provisions of such Sections relating to readjustment) or (ii) any New Second Lien Convertible Notes are repaid or otherwise become no longer outstanding, the Exercise Price and the Per Warrant Share Number (i.e., the number of shares of New Common Stock issuable upon exercise of each Warrant) shall simultaneously be adjusted by virtue of and in accordance with the provisions of the respective definitions thereof in Section 1.1.
(f) If, at any time after the issuance of the Warrants on the Effective Date, any adjustment is made to the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor pursuant to this Section 5.1, such adjustment to the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor (and, thus, the Exercise Price and the Per Warrant Share Number) will be applicable with respect to all then outstanding Warrants and all Warrants issued in exchange or substitution therefor on or after the date of the adjustment to the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor, but no such adjustment shall apply to any Warrants that were exercised prior to such adjustment or any Warrant Shares issued upon exercise of such Warrants.
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(g) All calculations under this Section 5.1 shall be made to the nearest cent ($0.01) (with $0.005 being rounded upward) or to the nearest one-hundredth of a share (with 0.005 of a share being rounded upward), as the case may be. Notwithstanding anything in this Section 5.1 to the contrary, the Initial Share Number or any Conversion Share Number shall not be increased, and the Cheap Stock Factor shall not be decreased, so as to result in the Exercise Price being reduced to less than the then existing par value of the New Common Stock as a result of any adjustment made hereunder; provided, that the Company shall not increase the par value of the New Common Stock above the Exercise Price then in effect and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of New Common Stock upon the exercise of any Warrant.
(h) The Company will not take any action specified in Section 5.1(a), (b) or (c) that would otherwise result in any adjustment in the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor (and, thus, the Exercise Price or the Per Warrant Share Number) hereunder if the total number of shares of New Common Stock issuable after such action upon exercise in full of the Warrants, together with all shares of New Common Stock then outstanding and all shares of New Common Stock then issuable upon exercise of all Options and upon conversion of all Convertible Securities then outstanding (other than the Warrants), would exceed the total number of shares of New Common Stock authorized for issuance by the Company’s then effective Certificate of Incorporation.
(i) In any case in which Section 5.1(a) or Section 5.1(b) shall result in an adjustment to the Per Warrant Share Number and the Exercise Price becoming effective prior to the occurrence of a specified event and any Warrant is exercised after the time at which the adjustment becomes effective but prior to the occurrence of such specified event, the Company may elect to defer until the occurrence of such specified event (A) the issuance to the Holder of such Warrant (or other Person entitled thereto) of, and the registration of such Holder (or other Person) as the record holder of, the Warrant Shares over and above the Warrant Shares issuable upon such exercise on the basis of the number of Warrant Shares obtainable upon exercise of such Warrant immediately prior to such adjustment and to require payment in respect of such number of Warrant Shares the issuance of which is not deferred on the basis of the Exercise Price in effect immediately prior to such adjustment and (B) the corresponding reduction in the Exercise Price; provided, however, that the Company shall deliver to such Holder or other Person a due bill or other appropriate instrument that meets any applicable requirements of the principal national securities exchange or other market on which the Warrant Shares are then traded and evidences the right of such Holder or other Person to receive, and to become the record holder of, such additional Warrant Shares, upon the occurrence of such specified event requiring such adjustment (without payment of any additional Exercise Price in respect of such additional Warrant Shares).
(j) The Company may at its option, at any time during the term of the Warrants, increase the number of Warrant Shares into which each Warrant is exercisable, or decrease the Exercise Price, in addition to those changes required by Section 5.1(a), (b) or (c) as deemed advisable by the Board, in order that any event treated for Federal income tax purposes as a dividend of stock or stock rights shall not be taxable to the recipients.
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(k) [Intentionally deleted.]
(l) The Initial Share Number and any Conversion Share Number and the Cheap Stock Factor (and, thus, the Exercise Price and the Per Warrant Share Number) shall not be adjusted as a result of any issuance of any shares of New Common Stock, Options, or Convertible Securities or any other securities (whether pursuant to the Management Incentive Plan or otherwise) except as expressly specified in Section 5.1(a), (b) or (c) .
(m) The Company shall cause any record of persons entitled to participate in an event specified in Section 5.1(a), (b) or (c) to be taken only as of the close of business on the record date for such event.
(n) Notwithstanding anything to the contrary contained herein, there shall be no adjustment to the Initial Share Number, any Conversion Share Number or the Cheap Stock Factor with respect to any Excluded Issuance.
(o) In the event that at any time, as a result of any adjustment made pursuant to Section 5.1(d), each Holder thereafter shall become entitled to receive any securities or property other than New Common Stock, thereafter the number of such other securities or property so receivable upon exercise of any Warrant and the Exercise Price shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the New Common Stock contained in this Section 5.1 and this Agreement shall be amended so to provide.
Section 5.2 Notices of Adjustment. Whenever the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor (and, thus, the Per Warrant Share Number and the Exercise Price) is adjusted, or the kind of securities or property constituting Warrant Shares is changed as herein provided, the Company shall (i) prepare and deliver, or cause to be prepared and delivered, forthwith to the Warrant Agent a certificate signed by an Appropriate Officer setting forth the Initial Share Number or the Converted Share Number or the Cheap Stock Factor (and, thus, the Per Warrant Share Number and the Exercise Price) as so adjusted, and any change in the kind of securities or property constituting Warrant Shares, the facts requiring such adjustment or change and the computation by which such adjustment or change was made, and (ii) direct the Warrant Agent to give written notice to each Registered Holder in the manner provided in Section 10.2, which notice shall state the Initial Share Number or the Converted Share Number or the Cheap Stock Factor (and, thus, the Per Warrant Share Number and the Exercise Price) as so adjusted, and any change in the kind of securities or property constituting Warrant Shares, the facts requiring such adjustment or change and the computation by which such adjustment or change was made and a description of the procedures and method of payment in respect thereof. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. The Warrant Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have knowledge of, any adjustments, unless and until the Warrant Agent shall have received such a certificate. Notwithstanding anything contained herein to the contrary, the Warrant Agent shall have no obligation under any Section of this Agreement to determine whether any adjustment is required to be made to (or to calculate any adjustments to) the Initial Share Number or any Conversion Share Number or the Cheap Stock Factor (and, thus, the Per Warrant Share Number and the Exercise Price), or whether there shall be any change in the kind of securities or property constituting Warrant Shares.
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Section 5.3 Form of Warrant Certificates After Adjustments. Irrespective of any adjustment in the Initial Share Number and any Conversion Share Number (and, thus, by virtue of and in accordance with the definitions thereof, the Exercise Price and the Per Warrant Share Number) or the amount or kind of Warrant Shares into which the Warrants are exercisable, Warrant Certificates theretofore or thereafter issued may continue to express the same Initial Share Number and any Conversion Share Number (and, thus, by virtue of and in accordance with the definitions thereof, the Exercise Price and the Per Warrant Share Number) initially applicable or the amount or kind of Warrant Shares initially issuable upon exercise of the Warrants evidenced thereby pursuant to this Agreement. The Company, however, may at any time in its sole discretion make any change in the forms of Warrant Certificates that it may deem appropriate to give effect to such adjustments and that does not affect the substance of the Warrant Certificates (including the rights, duties, immunities or obligations of the Warrant Agent), and any Warrant Certificate thereafter issued, whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in the form so changed.
ARTICLE VI
TRANSFER AND EXCHANGE OF WARRANTS
Section 6.1 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrant Certificates or Beneficial Interests Therein. The transfer and exchange of Global Warrant Certificates or beneficial interests therein shall be effected through the Depositary, in accordance with this Agreement and the procedures of the Depositary therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant Certificate for an Individual Warrant.
(i) Any Holder of a beneficial interest in any whole number of Warrants represented by a Global Warrant Certificate may, upon request, exchange such beneficial interest for an Individual Warrant. Upon receipt by the Warrant Agent from the Depositary or its nominee of written instructions or such other form of instructions as is customary for the Depositary on behalf of any Person having a beneficial interest in a Global Warrant Certificate, and all other necessary information, the Warrant Agent shall cause, in accordance with the standing instructions and procedures existing between the Depositary and the Warrant Agent, the number of Warrants represented by the Global Warrant Certificate to be reduced by the number of Warrants to be represented by the Individual Warrants to be issued in exchange for the beneficial interest of such Person in the Global Warrant Certificate and, following such reduction, (x) the Company shall issue and the Warrant Agent shall either manually or by facsimile countersign an Individual Warrant Certificate representing the appropriate number of Warrants, and (y) the Warrant Agent shall deliver such Individual Warrant Certificate to the Registered Holder thereof.
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(ii) Individual Warrants issued in exchange for a beneficial interest in a Global Warrant Certificate pursuant to this Section 6.1(b) shall be issued in such names as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Warrant Agent; provided, that such name shall not be that of a Person to whom the Holder would not have been permitted to sell or otherwise transfer Warrants pursuant to Section 6.1(g) if such exchange was a transfer of Warrants. The Warrant Agent shall deliver Individual Warrant Certificates evidencing such issuance to the Persons in whose names such Individual Warrant Certificates are so issued.
(c) Transfer and Exchange of Individual Warrants. When the Registered Holder of Individual Warrants has presented to the Warrant Agent a written request:
(i) to register the transfer of any Individual Warrants; or
(ii) to exchange any Individual Warrants for an equal number of Individual Warrants of other authorized denominations, the Warrant Agent shall register the transfer or make the exchange as requested if (x) its customary requirements for such transactions are met and (y) such transfer or exchange otherwise satisfies the provisions of this Agreement (including, without limitation, Section 6.1(g)); provided, however, that the Warrant Agent has received a written instruction of transfer or exchange, as applicable, in form satisfactory to the Warrant Agent, properly completed and duly executed by the Registered Holder thereof or by his attorney, duly authorized in writing. A party requesting transfer of Warrants must provide any evidence of authority that may be required by the Warrant Agent, including but not limited to, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association.
(d) Restrictions on Exchange or Transfer of an Individual Warrant for a Beneficial Interest in a Global Warrant Certificate. An Individual Warrant may not be exchanged for a beneficial interest in a Global Warrant Certificate except upon satisfaction of the requirements set forth below. Upon receipt by the Warrant Agent of appropriate instruments of transfer with respect to an Individual Warrant, in form satisfactory to the Warrant Agent, together with written instructions directing the Warrant Agent to make, or to direct the Depositary to make, an endorsement on the Global Warrant Certificate to reflect an increase in the number of Warrants represented by the Global Warrant Certificate equal to the number of Warrants represented by such Individual Warrant, and all other necessary information, then the Warrant Agent shall cancel such Individual Warrant on the Warrant Register and cause, or direct the Depositary to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Warrant Agent, the number of Warrants represented by the Global Warrant Certificate to be increased accordingly. If no Global Warrant Certificates are then outstanding, the Company shall issue and the Warrant Agent shall either manually or by facsimile countersign a new Global Warrant Certificate rep resenting the appropriate number of Warrants.
(e) Restrictions on Transfer and Exchange of Global Warrant Certificates. Notwithstanding any other provisions of this Agreement (other than the provisions set forth in Section 6.1(f)), unless and until it is exchanged in whole for an Individual Warrant, a Global Warrant Certificate may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary with the prior written consent of the Company.
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(f) Individual Warrants. If at any time, (i) the Depositary for the Global Warrant Certificates notifies the Company that the Depositary is unwilling or unable to continue as Depositary for the Global Warrant Certificates and a successor Depositary for the Global Warrant Certificates is not appointed by the Company within 90 days after delivery of such notice or (ii) the Company, in its sole discretion, notifies the Warrant Agent in writing that it elects to exclusively cause the issuance of Individual Warrants under this Agreement, then the Company shall issue and the Warrant Agent shall either manually or by facsimile countersign Individual Warrant Certificates representing Warrants in an aggregate number equal to the number of Warrants represented by the Global Warrant Certificates, in exchange for such Global Warrant Certificates in such names and in such amounts as directed by the Depositary or, in the absence of instructions from the Depositary, by the Company, and (y) the Warrant Agent shall deliver such Individual Warrant Certificates to the Registered Holders thereof.
(g) Restrictions on Transfer. No Warrants shall be Transferred if;
(i) such Transfer would result in any violation of the Securities Act or any state securities laws or regulations, or any other applicable federal or state laws or order of any Governmental Authority having jurisdiction over the Company;
(ii) such Transfer would, if consummated (after taking into account any other proposed Transfers or transfers of New Second Lien Convertible Notes or shares of New Common Stock for which a notice thereof has been previously delivered to the Board, but not yet consummated), result in the Company having, in the aggregate, 450 or more holders of record (as such concept is understood for purposes of Section 12(g) of the Exchange Act) of shares of New Common Stock, New Second Lien Convertible Notes and Warrants, unless at the time of such Transfer the Company is already subject to the reporting obligations under Sections 13 or 15(d) of the Exchange Act; provided, that (x) the number 450 as used in this Section 6.1(g)(ii) shall be increased by the number of such holders that acquire shares of New Common Stock from the Company other than on account of an exercise or conversion of New Second Lien Convertible Notes or Warrants and (y) the provisions of this Section 6.1(g)(ii) shall not apply to a Transfer to a transferee that is a Qualified Institutional Buyer and an Accredited Investor so long as (A) the transferor certifies in writing to the Company that such transferee is a Qualified Institutional Buyer and an Accredited Investor, (B) the transferee certifies in writing to the Company that it is a Qualified Institutional Buyer and an Accredited Investor and (C) such Transfer would, if consummated (after taking into account any other proposed Transfers or transfers of New Second Lien Convertible Notes or shares of New Common Stock for which a notice thereof has been previously delivered to the Board, but not yet consummated), not result in the Company having, in the aggregate, 1,900 or more holders of record (as such concept is understood for purposes of Section 12(g) of the Exchange Act) of shares of New Common Stock, New Second Lien Convertible Notes and Warrants, unless at the time of such Transfer the Company is already subject to the reporting obligations under Sections 13 or 15(d) of the Exchange Act; provided, further that any such transferee that is a Qualified Institutional Buyer and an Accredited Investor described in the foregoing clause (y) shall not be counted for purposes of determining whether any Transfer made after the date the Transfer is made to such transferee would, if consummated (after taking into account any other proposed Transfers or transfers of New Second Lien Convertible Notes or shares of New Common Stock for which a notice thereof has been previously delivered to the Board, but not yet consummated), result in the Company having, in the aggregate, 450 or more holders of record (as such concept is understood for purposes of Section 12(g) of the Exchange Act) of shares of New Common Stock, New Second Lien Convertible Notes and Warrants (unless the Company obtains knowledge that such transferee ceases to be an Accredited Investor); or
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(iii) such Transfer would, if consummated (after taking into account any other proposed Transfers or transfers of New Second Lien Convertible Notes or shares of New Common Stock for which a notice thereof has been previously delivered to the Board, but not yet consummated), require the Company to register the New Common Stock or any other equity securities of the Company under the Exchange Act (as a result of the number of stockholders or otherwise), unless at the time of such Transfer, the Company is already subject to the reporting obligations under Sections 13 or 15(d) of the Exchange Act.
Any purported Transfer of Warrants in violation of this Section 6.1(g) shall be void ab initio and shall not be recognized by the Company or the Warrant Agent.
(h) Cancellation of Global Warrant Certificate. At such time as all beneficial interests in Global Warrant Certificates have been exchanged for Individual Warrants, repurchased or cancelled, all Global Warrant Certificates shall be returned to, or retained and cancelled by, the Warrant Agent, upon written instructions from the Company satisfactory to the Warrant Agent.
Section 6.2 Obligations with Respect to Transfers and Exchanges of Warrants.
(i) To permit registrations of transfers and exchanges, the Company shall execute Warrant Certificates, if applicable, and the Warrant Agent is hereby authorized, in accordance with the provisions of Section 3.4 and this Article VI, to countersign such Warrant Certificates as required pursuant to the provisions of this Article VI and for the purpose of any distribution of new Warrant Certificates contemplated by Section 7.2 or additional Warrant Certificates contemplated by Article V.
(ii) All Warrant Certificates issued upon any registration of transfer or exchange of Warrant Certificates shall be the valid obligations of the Company, entitled to the same benefits under this Agreement as the Warrant Certificates surrendered upon such registration of transfer or exchange.
(iii) Subject to Section 8.1, no service charge shall be made to a Holder for any registration, transfer or exchange of Warrants, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other charge that may be imposed on the Holder in connection with any such transfer, exchange or registration of transfer.
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(iv) So long as the Depositary, or its nominee, is the Registered Holder of a Global Warrant Certificate, the Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Warrants represented by such Global Warrant Certificate for all purposes under this Agreement. Except as provided in Section 6.1(b) and Section 6.1(f) upon the exchange of a beneficial interest in a Global Warrant Certificate for Individual Warrants, Beneficial Holders will not be entitled to have any Warrants registered in their names, and will under no circumstances be entitled to receive physical delivery of any such Warrants and will not be considered the Registered Holder thereof under the Warrants or this Agreement. Neither the Company nor the Warrant Agent, in its capacity as registrar for such Warrants, will have any responsibility or liability for any aspect of the records relating to beneficial interests in a Global Warrant Certificate or for maintaining, supervising or reviewing any records relating to such beneficial interests.
(v) Subject to Section 6.1(b), Section 6.1(c), Section 6.1(d), Section 6.1(g), and this Section 6.2, the Warrant Agent shall, upon receipt of all information required to be delivered hereunder, from time to time register the transfer of any outstanding Warrants in the Warrant Register, upon delivery to the Warrant Agent, at its office designated for such purpose, of a properly completed form of assignment substantially in the form of Exhibit C-1 or Exhibit C-2 hereto, duly signed by the Registered Holder thereof or by the duly appointed legal representative thereof or by a duly authorized attorney, such signature to be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program and, in the case of a transfer of a Warrant Certificate pursuant to Section 6.1(c) or Section 6.1(e), upon surrender to the Warrant Agent of such Warrant Certificate, duly endorsed. Upon any such registration of transfer, a new Warrant Certificate shall be delivered to the transferee.
Section 6.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a Warrant Certificate for a fraction of a Warrant.
ARTICLE VII
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS
Section 7.1 No Rights or Liability as Stockholder; Notice to Registered Holders. Except as provided in Section 7.4, nothing contained in the Warrants or this Agreement shall be construed as conferring upon any Holder or his, her or its transferees the right to vote or to receive dividends or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Company or of any other matter, or any rights whatsoever as stockholders of the Company (including appraisal rights, dissenters rights, subscription rights or otherwise), or be deemed the holder of capital stock of the Company. No provision of the Warrants or this Agreement and no mere enumeration therein or herein of the rights or privileges of any Holder shall give rise to any liability of such Holder for the Exercise Price hereunder or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. A Warrant does not entitle any Holder thereof to any of the rights of a stockholder or any other securities of the Company. To the extent not covered by any statement delivered pursuant to Section 5.2, the Company shall give notice to Registered Holders in accordance with Section 10.2 if at any time prior to the expiration or exercise in full of the Warrants:
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(a) any dividend or distribution payable in shares of New Common Stock upon the New Common Stock shall be proposed;
(b) an offer for subscription pro rata to the holders of New Common Stock of any additional shares of stock of any class or other securities or rights shall be proposed; or
(c) any Fundamental Change or a dissolution, liquidation or winding up of the Company shall be proposed.
The Company shall use commercially reasonable efforts to provide such notice at least ten (10) Business Days prior to the date fixed as a record date or effective date or the date of closing of the Company’s stock transfer books for the determination of the stockholders entitled to vote on any of the events described in clauses (a)-(c) immediately above. Such notice shall specify such record date or the date of closing the stock transfer books or the anticipated date the relevant event shall take place, as the case may be, a reasonably detailed description of such event, and the anticipated timing thereof (provided, that, with respect to any Fundamental Change, the Company may elect to omit from such notice any such terms and conditions of such Fundamental Change if (x) the Company determines that the disclosure thereof to the Holders would have an adverse effect on such Fundamental Change or the consummation thereof or (y) the disclosure of either or both terms and conditions would violate any confidentiality obligations to which the Company is bound; provided, however, that the Company may not omit any information that relates to any election that a holder of New Common Stock is entitled to make prior to the consummation of such Fundamental Change that relates to the consideration that can be received by such holder in connection with such Fundamental Change). If the Company uses commercially reasonable efforts to deliver such notice, then failure to provide such notice shall not affect the validity of any action taken in connection with such proposed event. For the avoidance of doubt, no such notice shall supersede or limit any adjustment called for by Section 5.1 by reason of any event as to which notice is required by this Section 7.1.
Section 7.2 Lost, Stolen, Mutilated or Destroyed Warrants. If any Warrant Certificate is lost, wrongfully taken, mutilated or destroyed, the Company shall issue, and the Warrant Agent shall countersign and deliver, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for such Warrant Certificate lost, wrongfully taken or destroyed, a new Warrant Certificate of like tenor and representing an equivalent number of Warrants, but only upon receipt of evidence and an affidavit reasonably satisfactory to the Company and the Warrant Agent of the loss, wrongful taking or destruction of such Warrant Certificate and the posting of an open-penalty surety bond, indemnifying the Company and the Warrant Agent for any losses in connection therewith.
Applicants for such substitute Warrant Certificates shall also comply with such other reasonable regulations and pay such other reasonable charges as the Warrant Agent may prescribe and as required by Section 8-405 of the Uniform Commercial Code as in effect in the State of Delaware.
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Upon the issuance of any new Warrant Certificate under this Section 7.2, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and other expenses (including the fees and expenses of the Warrant Agent and of counsel to the Company) in connection therewith.
Every new Warrant Certificate issued pursuant to this Section 7.2 in lieu of any lost, wrongfully taken, mutilated or destroyed Warrant Certificate shall constitute an additional contractual obligation of the Company, whether or not the allegedly lost, wrongfully taken, mutilated or destroyed Warrant Certificate shall be at any time enforceable by anyone, and the Warrants evidenced thereby shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrants evidenced by Warrant Certificates duly issued hereunder.
The provisions of this Section 7.2 are exclusive and shall preclude (to the extent lawful) all other rights or remedies with respect to the replacement of mutilated, lost, wrongfully taken, or destroyed Warrant Certificates.
Section 7.3 Cancellation of Warrants. The Warrant Agent shall cancel all Warrant Certificates surrendered for exchange, substitution, transfer or exercise in whole or in part. Such cancelled Warrant Certificates shall thereafter be disposed of in a manner satisfactory to the Company provided in writing to the Warrant Agent.
Section 7.4 Purchase Rights.
(a) If, after the Effective Date, the Company issues or sells equity securities to any Person who was a stockholder of the Company on the Effective Date for consideration per share that is greater than the Exercise Price, then each Registered Holder of Individual Warrants and Beneficial Holder of Warrants evidenced by a Global Warrant Certificate that, in each case, is an Accredited Investor (any such holder, an “Eligible Holder”) shall have the right (such right, the “Purchase Right”), for a period of twenty (20) days after the Company delivers notice of such issuance or sale to such Eligible Holder, to participate in such issuance or sale on a pro rata basis (based on such Eligible Holder’s percentage ownership of shares of New Common Stock assuming full conversion, exercise or exchange of the Warrants, the New Second Lien Convertible Notes (and all indebtedness, debt securities or equity securities issued pursuant to any initial or successive refinancing of the New Second Lien Convertible Notes), and all other outstanding options, warrants, or convertible securities that also have a pro rata right to participate in such issuance or sale). A Registered Holder of Individual Warrants and Beneficial Holder of Warrants evidenced by a Global Warrant Certificate shall be permitted to transfer such holder’s Purchase Rights to any Affiliate or Family Member of such Holder so long as (x) such Affiliate or Family Member is an Accredited Investor, and (y) such transfer of Purchase Rights would not violate Section 6.1(g) if such transfer was a transfer of Warrants. Eligible Holders shall not be entitled to Purchase Rights with respect to any of the following exempted issuances: (i) issuances of the New Second Lien Convertible Notes and issuances of equity securities upon conversion of the New Second Lien Convertible Notes, (ii) issuances of equity securities in connection with the refinancing or repayment of any indebtedness or debt securities of the Company or any of its subsidiaries, (iii) issuances of equity securities to employees, directors, consultants and other service providers pursuant to an equity compensation plan approved by the Board, (iv) issuances of equity securities by means of a pro rata distribution to all holders of New Common Stock, (v) issuances of equity securities in a public offering, and (vi) issuances of equity securities upon exercise, conversion or exchange of any equity securities that were issued in any issuance described in any of the foregoing exempted issuances.
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(b) In the event that the sale of equity securities by the Company triggers the Purchase Rights, the Company shall be permitted to sell all of such equity securities to one or more stockholders of the Company without first offering to sell such equity securities to the Eligible Holders pursuant to their respective Purchase Rights so long as, within a reasonable period of time following the sale of such equity securities to such stockholder(s), the Company offers to sell to the Eligible Holders their respective pro rata shares (as determined above) of such equity securities pursuant to their respective Purchase Rights.
Section 7.5 Listing on National Securities Exchange. If the New Common Stock is listed for trading on a National Securities Exchange, then the Company will use commercially reasonable efforts to list the Warrants for trading on such National Securities Exchange (subject to the listing requirements for such National Securities Exchange).
Section 7.6 Piggyback Registration Rights. If any holder of shares of New Common Stock is granted piggy-back registration rights, the holders of New Common Stock issued upon exercise of the Warrants will also be granted piggyback registration rights on substantially the same terms as such other holder,
ARTICLE VIII
CONCERNING THE WARRANT AGENT AND OTHER MATTERS
Section 8.1 Payment of Taxes. The Company will from time to time promptly pay all transfer taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of the Warrant Shares upon the exercise of Warrants, but any such taxes or charges in connection with the issuance or registration of Warrants or Warrant Shares in (or payment of cash or other property to) any name other than that of the Holder of the Warrants shall be paid by such Holder; and in any such case, the Company and the Warrant Agent shall not be required to issue or deliver any Warrants or Warrant Shares (or pay any cash or other property) until such taxes or charges shall have been paid or it is established to the Company’s and the Warrant Agent’s reasonable satisfaction that no tax or charge is due. Notwithstanding any other provision of this Agreement, the Company and any applicable withholding agent, as defined under the Internal Revenue Code of 1986, as amended, shall be permitted to comply with applicable law regarding withholding taxes, if any, and any amounts so withheld shall be treated as being paid or transferred to the Person against whom such withholding is made for all purposes of this Agreement.
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Section 8.2 Resignation, Consolidation or Merger of Warrant Agent.
(a) Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving thirty (30) days’ notice in writing to the Company. The Company may remove the Warrant Agent at any time after giving thirty (30) days’ notice in writing to the Warrant Agent. If the office of the Warrant Agent becomes vacant by resignation or removal, the Company shall appoint in writing a successor Warrant Agent in place of the resigned or removed Warrant Agent. In the case of a resignation, if the Company shall fail to make such appointment within a period of thirty (30) calendar days after it has been notified in writing of such resignation by the Warrant Agent or by the Registered Holder of a Warrant (who shall, with such notice, submit his Warrant for inspection by the Company), then the Registered Holder of any Warrant may apply to any court of competent jurisdiction located in the State of Delaware for appointment of a successor Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a Person organized and existing under the laws of any state or of the United States of America, and shall be authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, rights, immunities, duties and obligations of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent, the Company shall make, execute, acknowledge and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties and obligations. For the avoidance of doubt, any predecessor Warrant Agent shall deliver and transfer to its successor Warrant Agent any property at the time held by it hereunder and execute and deliver, at the expense of the Company, any further assurance, conveyance, act or deed necessary for the purpose of delivering and transferring such property.
(b) Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall (i) give notice thereof to the predecessor Warrant Agent and the transfer agent for the New Common Stock not later than the effective date of any such appointment, and (ii) cause the successor Warrant Agent to deliver written notice thereof to each Registered Holder at such holder’s address appearing on the Warrant Register. Failure to give any notice provided for in this Section 8.2(b) or any defect therein shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of a successor Warrant Agent, as the case may be.
(c) Merger, Consolidation or Name Change of Warrant Agent.
(i) Any Person or other entity into which the Warrant Agent may be merged or converted or with which it may be consolidated or any Person resulting from any merger, conversion, or consolidation to which the Warrant Agent shall be a party or any Person succeeding to the shareholder services business of the Warrant Agent or any successor Warrant Agent, shall be the successor Warrant Agent under this Agreement, without any further act or deed, if such Person would be eligible for appointment as a successor Warrant Agent under the provisions of Section 8.2(a). If any of the Warrant Certificates have been countersigned but not delivered at the time such successor to the Warrant Agent succeeds under this Agreement, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent; and if at that time any of the Warrant Certificates shall not have been countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.
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(ii) If at any time the name of the Warrant Agent is changed and at such time any of the Warrant Certificates have been countersigned but not delivered, the Warrant Agent whose name has changed may adopt the countersignature under its prior name; and if at that time any of the Warrant Certificates have not been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.
Section 8.3 Fees and Expenses of Warrant Agent.
(a) Remuneration. The Company agrees to pay the Warrant Agent the fees for its services as Warrant Agent hereunder set forth on Appendix II hereto and will reimburse the Warrant Agent upon demand for all out-of-pocket third party expenses (including reasonable outside counsel fees and expenses) that the Warrant Agent may reasonably incur in the preparation, delivery, administration, execution and amendment of this Agreement and the exercise and performance of its duties hereunder.
(b) Further Assurances. The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.
Section 8.4 Liability of Warrant Agent.
(a) Reliance on Company Statement. Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter may be deemed to be conclusively proved and established by a certificate signed by any Appropriate Officer and delivered to the Warrant Agent; and such certificate will be full authorization to the Warrant Agent for any action taken, suffered or omitted by it under the provisions of this Agreement in reliance upon such certificate. The Warrant Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any Appropriate Officer, and to apply to any Appropriate Officer for advice or instructions in connection with its duties, and it may rely upon such advice and instructions and will not be liable, and will be indemnified and held harmless by the Company in accordance with Section 8.4(b), for any action taken, suffered or omitted to be taken by it in accordance therewith or pursuant to the provisions of this Agreement.
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(b) Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith (which gross negligence, willful misconduct or bad faith must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The Company agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability, suit, action, proceeding, judgment, claim, settlement, cost or expense (including reasonable counsel fees and expenses), incurred without gross negligence, willful misconduct or bad faith on the part of the Warrant Agent (which gross negligence, willful misconduct or bad faith must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) as a result of a third party claim against the Warrant Agent for any action taken, suffered or omitted by the Warrant Agent in connection with the preparation, delivery, acceptance, administration, execution and amendment of this Agreement and the exercise and performance of its duties hereunder. No provision in this Agreement shall be construed to relieve the Warrant Agent from liability for its own gross negligence, willful misconduct or bad faith (which gross negligence, willful misconduct or bad faith must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Notwithstanding anything contained herein to the contrary, the Warrant Agent’s aggregate liability during any term of this Agreement with respect to, arising from, or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to the Warrant Agent as fees and charges, but not including reimbursable expenses.
(c) Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible or have any duty to make any calculation or adjustment, or to determine when any calculation or adjustment required under the provisions of Article IV or Article V hereof should be made, how it should be made or what it should be, or have any responsibility or liability for the manner, method or amount of any such calculation or adjustment or the ascertaining of the existence of facts that would require any such calculation or adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Warrant Shares will, when issued, be valid and fully paid and non-assessable.
Section 8.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the express terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for and pay to the Company all moneys received by the Wan-ant Agent for the purchase of Warrant Shares through the exercise of Warrants.
Section 8.6 Agent for the Company. In acting in the capacity of Warrant Agent under this Agreement, the Warrant Agent is acting solely as agent of the Company and does not assume any obligation or relationship of agency or trust with any of the owners or holders of the Warrants.
Section 8.7 Counsel. The Warrant Agent may consult with counsel satisfactory to it (which may be counsel to the Company), and the advice of such counsel shall be full and complete authorization to and protection of the Warrant Agent in respect of any action taken, suffered or omitted by it hereunder in accordance with the advice of such counsel.
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Section 8.8 Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in reliance upon any notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.
Section 8.9 Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, any Warrant, with the same rights that it or they would have were it not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as a depositary, trustee or agent for, any committee or body of holders of Warrants, or other securities or obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under an indenture.
Section 8.10 No Liability for Interest. The Warrant Agent shall not be under any liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement.
Section 8.11 No Liability for Invalidity. The Warrant Agent shall not be under any responsibility with respect to the validity or sufficiency of this Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Warrant Agent) or with respect to the validity or execution of the Warrant Certificates (except its countersignature thereon).
Section 8.12 No Responsibilities for Recitals. The recitals contained herein and in the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon) shall be taken as the statements of the Company and the Warrant Agent assumes no responsibility hereby for the correctness of the same.
Section 8.13 No Implied Obligations. The Warrant Agent shall be obligated to perform such duties as are explicitly set forth herein and no implied duties or obligations shall be read into this Agreement against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder that may involve it in any expense or liability, the payment of which within a reasonable time is not, in its opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any Warrant Certificate authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the issue and sale, or exercise, of the Warrants. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in any Warrant Certificate or in the case of the receipt of any written demand from a Holder with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, to make any demand upon the Company.
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Section 8.14 Agents. The Warrant Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys-in-fact, and the Warrant Agent shall not be responsible for any loss or expense arising out of, or in connection with, the actions or omissions to act of its agents or attorneys-in-fact, so long as the Warrant Agent acts without gross negligence, willful misconduct or bad faith (which gross negligence, willful misconduct or bad faith must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) in connection with the selection of, and assignment of tasks to, such agents or attorneys-in-fact; provided, that this provision shall not permit the Warrant Agent to assign all or substantially all of its primary record-keeping responsibilities hereunder to any third party provider without the Company’s prior written consent.
Section 8.15 Force Majeure. In no event shall the Warrant Agent be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.
ARTICLE IX
WARRANT REPRESENTATIVE
Section 9.1 Appointment. The Equity Committee shall be entitled to appoint a representative for the holders of the Warrants, which representative shall be acceptable to the Debtors, the Requisite Consenting Noteholders and the Requisite Exit Facility Lenders (such representative, the “Warrant Representative”).
Section 9.2 Warrant Representative Rights. The Warrant Representative shall have the right to monitor any sale process the Company or its direct or indirect subsidiaries may commence in seeking to sell substantially all of their business and operations after the Effective Date solely in an observer capacity (it being understood that the Warrant Representative (i) may monitor, observe, attend, and, if requested by the Board, participate in any discussions or meetings of the Board or stockholders relating to, any aspect of such sale process or any terms or conditions of any related sale, but shall have no right to vote on any matter relating to any such sale process or such related sale, and (ii) shall not have any right to monitor, observe, vote on, participate in any discussions or meetings of the Board or stockholders relating to, or otherwise be involved with, any other transaction, decision or other matter relating to the Company or any of its subsidiaries). The Warrant Representative shall be required to enter into a confidentiality and non-use agreement that is acceptable to the Company, the Requisite Consenting Noteholders, the Requisite Exit Facility Lenders and, with respect to any confidentiality and non-use agreement that will be entered into by the Warrant Representative on the Effective Date, the Equity Committee. The Company shall pay the Warrant Representative the Warrant Representative Compensation within 30 days following the Company’s receipt of an invoice therefor. For the purposes of this Section 9.2, “Warrant Representative Compensation” shall mean the actual expenses (but not fees) incurred by the Warrant Representative, which shall be limited to (x) $50,000 minus (y) the amount of fees and expenses that the Company pays to Gordian Group LLC in its capacity as investment banker to the Equity Committee.
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Section 9.3 Notices of Issuance, Adjusted Equity Value, and Total Share Number. Promptly following each issuance (or, pursuant to Section 5.1(c)(iv), deemed issuance in respect of any issuance of Options or Convertible Securities) of Additional Shares of New Common Stock, the Company shall deliver to the Warrant Representative a writing signed by an executive officer of the Company (solely in such officer’s capacity as a duly authorized officer of the Company and not in his or her individual capacity and without personal liability) certifying the Board’s determination of (i) the consideration per share received by the Company in connection with such issuance of Additional Shares of New Common Stock (as computed pursuant to Section 5.1(c)(v)) and (ii) the Fair Market Value per share of the New Common Stock immediately prior to such issuance, as determined by the Board (it being understood that (1) the Company shall not be required to obtain a fairness, valuation or other opinion in connection with any such issuance and (2) any determination certified to by the executive officer of the Company would be a determination of the Board and not a determination of such executive officer). In addition, (x) within 15 days after the end of each calendar quarter and (y) on a date that is between 10 and 15 days prior to the Expiration Date, the Company shall deliver to the Warrant Representative a writing signed by an executive officer of the Company (solely in such officer’s capacity as a duly authorized officer of the Company and not in his or her individual capacity and without personal liability) certifying to the Adjusted Equity Value and the Total Share Number as of, in the case of clause (x), such calendar quarter end or, in the case of clause (y), a date specified in such writing that is within 15 days prior to the Expiration Date, as applicable, and containing a calculation of the Adjusted Equity Value and the Total Share Number as of such date.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Binding Effects; Benefits. This Agreement shall inure to the benefit of and shall be binding upon the Company, the Warrant Agent and the Holders and their respective heirs, legal representatives, successors and permitted assigns, subject to the terms of this Agreement (including Article VI and Section 7.4). Nothing in this Agreement, expressed or implied, is intended to or shall confer on any Person other than the Company, the Warrant Agent and the Holders, or their respective heirs, legal representatives, successors or permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
Section 10.2 Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be sent by certified or registered mail, by private national courier service (return receipt requested, postage prepaid), by personal delivery or by electronic or facsimile transmission. Such notice or communication shall be deemed given, delivered, provided or received (a) if mailed, two Business Days after the date of mailing, (b) if sent by national courier service, one Business Day after being sent, (c) if delivered personally, when so delivered, or (d) if sent by electronic or facsimile transmission, on the Business Day such transmission is sent if such transmission is sent prior to 5:00 p.m. (New York City time) on the Business Day it is sent (and if such transmission is sent after 5:00 p.m. (New York City time), such transmission shall be deemed sent on the Business Day immediately following the Business Day on which such transmission is sent), in each case as follows:
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if to the Warrant Agent, to:
Computershare Inc
250 Royall Street
Canton MA 02021
Tel: 781-575-3400
Facsimile: 781-575-3146
if to the Warrant Representative, to:
John Connor
531 Main St., Box #234
El Segundo, CA 90245-3060
E-mail: jemcyl@gmail.com
if to the Company, to:
Hycroft Mining Corporation
9790 Gateway Drive, Suite 200
Reno, NV 89521
Attention: Stephen M. Jones
Facsimile: 775-358-4458
E-mail: Steve.Jones@AlliedNevada.com
with a copy (which shall not constitute notice) to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038-4982
Attention: Jayme Goldstein and Matthew Schwartz
Facsimile: 212-806-6006
E-mail: jgoldstein@stroock.com and mschwartz@stroock.com
if to Registered Holders, at their addresses as they appear in the Warrant Register.
The Company shall not have any obligation to deliver any notice of any event or matter to any Beneficial Holder, whether or not any notice thereof is required to be given to any Registered Holder.
In any case where notice is given to Registered Holders, neither the failure to give such notice, nor any defect in any notice so given, to any particular Registered Holder shall affect the sufficiency of such notice with respect to other Registered Holders.
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Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.
If the Company fails to maintain such office or agency or fails to give such notice of any change in the location thereof, presentation may be made and notices and demands may be served at the office of the Warrant Agent designated for such purpose.
Section 10.3 Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any Person other than the parties hereto and the Registered Holders (and, solely as and to the extent specified herein, the Beneficial Holders), any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto, their successors and assigns and the Holders.
Section 10.4 Examination of this Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent designated for such purpose, for examination by the Holder of any Warrant. Prior to such examination, the Warrant Agent may require any such Holder to submit his Warrant for inspection by it.
Section 10.5 Counterparts. This Agreement may be executed in any number of original, facsimile, PDF or electronic counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
Section 10.6 Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation hereof.
Section 10.7 Amendments.
(a) Subject to Section 10.7(b) below, this Agreement may not be amended except in writing signed by the Company and the Warrant Agent.
(b) Subject to the terms of Sections 5.1(d) and 5.1(o) (it being understood that adjustments made to this Agreement and the Warrants described in Sections 5.1(d) and 5.1(o) are not subject to the provisions of this Section 10.7), the Company and the Warrant Agent may from time to time supplement or amend this Agreement or the Warrants with the prior written consent of the Registered Holders of a majority of the Warrants then outstanding; provided, however, that the consent of each Registered Holder affected thereby shall be required for any supplement or amendment to this Agreement or the Warrants that would: (i) increase the Exercise Price or change how the Exercise Price is payable; (ii) decrease the Warrant Share Number or the Per Warrant Share Number; (iii) shorten the Exercise Deadline; (iv) waive the application of the adjustment provisions contained in Article V in connection with any events to which such provisions apply or otherwise modify the adjustment provisions contained in Article V in a manner adverse in any material respect to the Holders; (v) change the type of stock, other securities, cash, or assets issuable upon exercise of the Warrants; (vi) change the definitions of Eligible Party, Liquidity Event, Liquidity Event Exercise Period, Liquidity Event Restricted Persons, or Restricted Persons; (vii) change Sections 4.2(c), 4.7, 7.4, 7.5, 7.6 or 10.7 or Article IX, or (viii) treat such Holder differently in an adverse way from any other Holder of Warrants (without regard to any effect resulting from (A) the individual circumstances of any such Holder or (B) the differences in the respective percentages of ownership of Warrants of the Holders); provided, further that any adjustments to this Agreement or any of the Warrants made pursuant to the provisions of Article V shall not be deemed to be a supplement or amendment to this Agreement or the Warrants that is covered by this Section 10.7. In determining whether Registered Holders of the required number of Warrants have consented to any supplement or amendment to this Agreement or the Warrants, the Warrants owned by the Reorganized Debtors, their Affiliates, and each Liquidity Event Restricted Person shall be disregarded and deemed not to be outstanding.
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(c) Any amendment, modification or waiver effected pursuant to and in accordance with the provisions of this Section 10.7 will be binding upon all Holders and upon each future Holder, the Company and the Warrant Agent. In the event of any amendment, modification or waiver, the Company will give prompt notice thereof to all Registered Holders and, if appropriate, notation thereof will be made on all Warrant Certificates thereafter surrendered for registration of transfer or exchange.
Section 10.8 No Inconsistent Agreements. The Company will not, on or after the date hereof, enter into any agreement with respect to its securities which expressly conflicts with the rights granted to the Holders in the Warrants pursuant to the provisions hereof. The Company represents and warrants to the Holders that, as of the date hereof, the rights granted hereunder do not in any way conflict with the rights granted to holders of the Company’s securities under any other agreements.
Section 10.9 Integration/Entire Agreement. This Agreement, the Warrants and the other agreements and documents referenced herein and therein constitute the complete agreement among the Company, the Warrant Agent and the Holders with respect to the subject matter hereof and supersede all prior agreements, oral or written, between or among the parties with respect thereto.
Section 10.10 GOVERNING LAW. ETC. THIS AGREEMENT AND EACH WARRANT ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. EACH PARTY HERETO CONSENTS AND SUBMITS TO (AND EACH HOLDER, BY ITS ACCEPTANCE OF WARRANTS, SHALL BE DEEMED TO HAVE CONSENTED AND SUBMITTED TO) THE EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY AND ANY STATE APPELLATE COURT THEREFROM WITHIN THE STATE OF DELAWARE (UNLESS THE DELAWARE COURT OF CHANCERY SHALL DECLINE TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, IN WHICH CASE, OF ANY DELAWARE STATE OR FEDERAL COURT WITHIN THE STATE OF DELAWARE) IN CONNECTION WITH ANY ACTION OR PROCEEDING BROUGHT AGAINST IT THAT ARISES OUT OF OR IN CONNECTION WITH, THAT IS BASED UPON, OR THAT RELATES TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO HEREBY WAIVES (AND EACH HOLDER, BY ITS ACCEPTANCE OF WARRANTS, SHALL BE DEEMED TO HAVE WAIVED) ANY OBJECTION TO JURISDICTION OR VENUE IN ANY SUCH COURT IN ANY SUCH ACTION OR PROCEEDING AND AGREES (AND EACH HOLDER, BY ITS ACCEPTANCE OF WARRANTS, SHALL BE DEEMED TO HAVE AGREED) NOT TO ASSERT ANY DEFENSE BASED ON FORUM NON CONVENIENS OR LACK OF JURISDICTION OR VENUE IN ANY SUCH COURT IN ANY SUCH ACTION OR PROCEEDING.
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Section 10.11 Termination. This Agreement shall terminate at the Exercise Deadline. Notwithstanding the foregoing, this Agreement will terminate on any earlier date when all Warrants have been exercised or have expired or been cancelled. The provisions of Section 8.4 and this Article X shall survive such termination and the resignation or removal of the Warrant Agent.
Section 10.12 WAIVER OF TRIAL BY JURY. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES (AND EACH HOLDER, BY ITS ACCEPTANCE OF WARRANTS, SHALL BE DEEMED TO HAVE IRREVOCABLY AND UNCONDITIONALLY WAIVED) THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 10.13 Severability. In the event that any one or more of the provisions contained herein or in the Warrants, or the application thereof in any circumstances, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provisions in every other respect and of the remaining provisions contained herein and therein shall not be affected or impaired thereby; provided, that if any such excluded term, provision, covenant or restriction shall materially adversely affect the rights, immunities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to resign immediately. Furthermore, subject to the preceding sentence, in lieu of any such invalid, illegal or unenforceable provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms and commercial effect to such invalid, illegal or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
46
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.
HYCROFT MINING CORPORATION: | |||
By: | /s/ Stephen M. Jones | ||
Name: | Stephen M. Jones | ||
Title: | Executive Vice President, Secretary and Chief Financial Officer |
COMPUTERSHARE, INC. and | |||
COMPUTERSHARE TRUST COMPANY, N.A. | |||
On Behalf of Both Entities: | |||
By: | /s/ Thomas Borbely | ||
Name: | Thomas Borbely | ||
Title: | Manager, Corporate Actions |
EXHIBIT A-1
FORM OF FACE OF INDIVIDUAL WARRANT CERTIFICATE
VOID AFTER THE DATES AND TIMES SET FORTH IN THE WARRANT AGREEMENT
THIS WARRANT HAS BEEN, AND THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 1145 OF CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”). THE WARRANTS AND SUCH WARRANT SHARES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE. IF THE HOLDER IS DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE, THEN THE SECURITIES MAY ONLY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UPON REGISTRATION UNDER THE SECURITIES ACT OR RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO HYCROFT MINING CORPORATION (THE “COMPANY”) AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, AND OF ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT IS SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THAT CERTAIN WARRANT AGREEMENT, DATED AS OF OCTOBER 22, 2015 (THE “WARRANT AGREEMENT”), BETWEEN THE COMPANY AND THE WARRANT AGENT NAMED THEREIN. NO REGISTRATION OF TRANSFER OF THIS WARRANT WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS WARRANT A COPY OF THE WARRANT AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF THIS WARRANT, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT ARE SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THE COMPANY’S CERTIFICATE OF INCORPORATION AND A STOCKHOLDERS AGREEMENT MADE AS OF OCTOBER 22, 2015, TO WHICH THE COMPANY AND ALL STOCKHOLDERS ARE PARTY. NO REGISTRATION OF TRANSFER OF THESE WARRANT SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF RECORD OF THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT A COPY OF THE COMPANY’S CERTIFICATE OF INCORPORATION AND THE STOCKHOLDERS AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF STOCK, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
This Individual Warrant Certificate may not be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws, or otherwise in a manner that is prohibited by Article VI of the Warrant Agreement.
No registration or transfer of the securities issuable pursuant to the Warrant will be recorded on the books of the Company until these provisions have been complied with.
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THE SECURITIES REPRESENTED BY THIS INDIVIDUAL WARRANT CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANTS) ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF OCTOBER 22, 2015 BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT (THE “WARRANT AGREEMENT”).
THIS WARRANT WILL BE VOID AFTER THE DATES
AND TIMES
SET FORTH IN THE WARRANT AGREEMENT
WARRANT TO PURCHASE
WARRANT SHARES OF
HYCROFT MINING CORPORATION
CUSIP: 448629 11 3
DISTRIBUTION DATE: OCTOBER 22, 2015
No. _____
This certifies that, for the value received, __________________________, and its registered assigns (collectively, the “Registered Holder”), is the Registered Holder of ______________________ (______________________) Warrants, each such Warrant entitling the Registered Holder to purchase from Hycroft Mining Corporation, a corporation incorporated under the laws of the State of Delaware (the “Company”), subject to the terms and conditions hereof and as more fully described in Article IV of the Warrant Agreement, at any time and from time to time prior to the Exercise Deadline the number of fully paid and non-assessable shares of New Common Stock (or such other securities or property as shall from time to time constitute Warrant Shares) equal to the Per Warrant Share Number on the Exercise Date at a purchase price per Warrant Share equal to the Exercise Price on the Exercise Date. The Exercise Price and the Per Warrant Share Number and the number and kind of shares purchasable hereunder are subject to adjustment from time to time as provided in Article V of the Warrant Agreement. Any Warrant not exercised prior to the Exercise Deadline shall (i) not be exercisable after the Exercise Deadline (such right to exercise being deemed permanently and irrevocably waived following the Exercise Deadline), (ii) become permanently and irrevocably null and void at the Exercise Deadline, and all rights thereunder and all rights in respect thereof under the Warrant Agreement shall cease and terminate at such time, and (iii) not entitle the Holder thereof to any distribution, payment or other amount on or in respect thereof. Warrants evidenced by this Individual Warrant Certificate may be exercised only in a whole number of Warrants.
Capitalized terms used herein without definitions shall have the meanings given to such terms in the Warrant Agreement.
This Individual Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.
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IN WITNESS WHEREOF, this Individual Warrant Certificate has been duly executed by the Company under its corporate seal as of the ____ day of ____________, 2015.
HYCROFT MINING CORPORATION | ||
By: | ||
Name: | ||
Title: |
Attest: | ||
Secretary | ||
Computershare Inc. and | ||
Computershare Trust Company, N.A., | ||
collectively as Warrant Agent |
By: | ||
Name: | ||
Title: |
Address of Registered Holder for Notices (until changed in accordance with this Individual Warrant Certificate):
__________________________
__________________________
__________________________
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS INDIVIDUAL WARRANT CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
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FORM OF REVERSE OF INDIVIDUAL WARRANT CERTIFICATE
The Warrants evidenced by this Individual Warrant Certificate are a part of a duly authorized issue of Warrants to purchase Warrant Shares issued pursuant to the Warrant Agreement, a copy of which may be inspected at the Warrant Agent’s office designated for such purpose. The Warrant Agreement hereby is incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the Holders of the Warrants, and this Individual Warrant Certificate is qualified in its entirety by reference to the Warrant Agreement. All capitalized terms used in this Individual Warrant Certificate herein but not defined that are defined in the Warrant Agreement shall have the meanings assigned to them therein.
The Company shall not be required to issue fractions of Warrant Shares or any certificates that evidence fractional Warrant Shares if the Company makes the cash payment described in Section 4.7 of the Warrant Agreement.
No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws, or otherwise in a manner that is prohibited by Article VI of the Warrant Agreement.
A Warrant does not entitle the Holder to any of the rights of a stockholder of the Company.
The Company and Warrant Agent may deem and treat the Registered Holder hereof as the absolute owner of this Individual Warrant Certificate and the Warrants evidenced hereby (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof, any distribution in respect hereof and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
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EXHIBIT A-2
FORM OF FACE OF GLOBAL WARRANT CERTIFICATE
VOID AFTER THE DATES AND TIMES SET FORTH IN THE WARRANT AGREEMENT
THIS WARRANT HAS BEEN, AND THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT WILL BE, ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SECTION 1145 OF CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “BANKRUPTCY CODE”). THE WARRANTS AND SUCH WARRANT SHARES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE. IF THE HOLDER IS DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE, THEN THE SECURITIES MAY ONLY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UPON REGISTRATION UNDER THE SECURITIES ACT OR RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO HYCROFT MINING CORPORATION (THE “COMPANY”) AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT, AND OF ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT IS SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THAT CERTAIN WARRANT AGREEMENT, DATED AS OF OCTOBER 22, 2015 (THE “WARRANT AGREEMENT”), BETWEEN THE COMPANY AND THE WARRANT AGENT NAMED THEREIN. NO REGISTRATION OF TRANSFER OF THIS WARRANT WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS WARRANT A COPY OF THE WARRANT AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF THIS WARRANT, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT ARE SUBJECT TO VARIOUS TERMS, PROVISIONS AND CONDITIONS, INCLUDING CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER, AS SET FORTH IN THE COMPANY’S CERTIFICATE OF INCORPORATION AND A STOCKHOLDERS AGREEMENT MADE AS OF OCTOBER 22, 2015, TO WHICH THE COMPANY AND ALL STOCKHOLDERS ARE PARTY. NO REGISTRATION OF TRANSFER OF THESE WARRANT SHARES WILL BE MADE ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF RECORD OF THE WARRANT SHARES WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT A COPY OF THE CERTIFICATE OF INCORPORATION AND THE STOCKHOLDERS AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF STOCK, UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.
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This Global Warrant Certificate is held by The Depository Trust Company (the “Depositary”) or its nominee in custody for the benefit of the beneficial owners hereof, and is not transferable to any Person under any circumstances except that (i) this Global Warrant Certificate may be exchanged for Individual Warrants in whole but not in part pursuant to Section 6.1(f) of the Warrant Agreement or upon request of a Beneficial Holder of a beneficial interest in any whole number of Warrants represented hereby pursuant to Section 6.1(b) of the Warrant Agreement, (ii) this Global Warrant Certificate may be delivered to the Warrant Agent for cancellation pursuant to Section 6.1(h) of the Warrant Agreement and (iii) this Global Warrant Certificate may be transferred by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary with the prior written consent of the Company.
Unless this Global Warrant Certificate is presented by an authorized representative of the Depositary to the Company or the Warrant Agent for registration of transfer, exchange or payment and any certificate issued is registered in the name of Cede & Co., or such other entity as is requested by an authorized representative of the Depositary (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depositary), any transfer, pledge or other use hereof for value or otherwise by or to any Person is wrongful because the registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Warrant Certificate shall be limited to transfers in whole, but not in part, to nominees of the Depositary or to a successor thereof or such successor’s nominee, and transfers of portions of this Global Warrant Certificate shall be limited to transfers made in accordance with the restrictions set forth in Article VI of the Warrant Agreement.
No registration or transfer of the securities issuable pursuant to the Warrant will be recorded on the books of the Company until these provisions have been complied with.
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THE SECURITIES REPRESENTED BY THIS GLOBAL WARRANT CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANTS) ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF OCTOBER 22, 2015 BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT (THE ‘‘WARRANT AGREEMENT”).
THIS WARRANT WILL BE VOID AFTER THE DATES
AND TIMES
SET FORTH IN THE WARRANT AGREEMENT
WARRANT TO PURCHASE
WARRANT SHARES OF
HYCROFT MINING CORPORATION
CUSIP: 448629 11 3
DISTRIBUTION DATE: OCTOBER 22, 2015
No. _____
This certifies that, for value received, Cede & Co., and its registered assigns (collectively, the “Registered Holder”), is the Registered Holder of ________________________ (___________________________) (or such greater or lesser number as may be indicated on the “Schedule of Changes of Warrants Evidenced by the Global Warrant Certificate” attached hereto) Warrants, each such Warrant entitling the Registered Holder to purchase from Hycroft Mining Corporation, a corporation incorporated under the laws of the State of Delaware (the “Company”), subject to the terms and conditions hereof and as more fully described in Article IV of the Warrant Agreement, at any time and from time to time prior to the Exercise Deadline the number of fully paid and non-assessable shares of New Common Stock (or such other securities or property as shall from time to time constitute Warrant Shares) equal to the Per Warrant Share Number on the Exercise Date at a purchase price per Warrant Share equal to the Exercise Price on the Exercise Date. The Exercise Price and the Per Warrant Share Number and the number and kind of shares purchasable hereunder are subject to adjustment from time to time as provided in Article V of the Warrant Agreement. Any Warrant not exercised prior to the Exercise Deadline shall (i) not be exercisable after the Exercise Deadline (such right to exercise being deemed permanently and irrevocably waived following the Exercise Deadline), (ii) become permanently and irrevocably null and void at the Exercise Deadline, and all rights thereunder and all rights in respect thereof under the Warrant Agreement shall cease and terminate at such time, and (iii) not entitle the Holder thereof to any distribution, payment or other amount on or in respect thereof. Warrants evidenced by this Global Warrant Certificate may be exercised only in a whole number of Warrants.
Capitalized terms used herein without definitions shall have the meanings given to such terms in the Warrant Agreement.
This Global Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.
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IN WITNESS WHEREOF, this Global Warrant Certificate has been duly executed by the Company under its corporate seal as of the ____ day of ____________, 2015.
HYCROFT MINING CORPORATION | ||
By: | ||
Name: | ||
Title: |
Attest: | ||
Secretary | ||
Computershare Inc. and | ||
Computershare Trust Company, N.A., | ||
collectively as Warrant Agent |
By: | ||
Name: | ||
Title: |
Address of Registered Holder for Notices (until changed in accordance with this Global Warrant Certificate):
Cede & Co.
55 Water Street
New York, New York 10041
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL WARRANT CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
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FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE
The Warrants evidenced by this Global Warrant Certificate are a part of a duly authorized issue of Warrants to purchase Warrant Shares issued pursuant to the Warrant Agreement, a copy of which may be inspected at the Warrant Agent’s office designated for such purpose. The Warrant Agreement hereby is incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the Holders of the Warrants, and this Global Warrant Certificate is qualified in its entirety by reference to the Warrant Agreement. All capitalized terms used in this Global Warrant Certificate herein but not defined that are defined in the Warrant Agreement shall have the meanings assigned to them therein.
The Company shall not be required to issue fractions of Warrant Shares or any certificates that evidence fractional Warrant Shares if the Company makes the cash payment described in Section 4.7 of the Warrant Agreement.
No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws, or otherwise in a manner that is prohibited by Article VI of the Warrant Agreement.
A Warrant does not entitle the Holder to any of the rights of a stockholder of the Company.
The Company and Warrant Agent may deem and treat the Registered Holder hereof as the absolute owner of this Global Warrant Certificate and the Warrants evidenced hereby (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof, any distribution in respect hereof and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
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SCHEDULE OF CHANGES OF WARRANTS EVIDENCED
BY THE GLOBAL WARRANT CERTIFICATE
The following changes in the number of Warrants evidenced by this Global Warrant Certificate as a result of exchanges of all or any part hereof for Individual Warrants, or upon the exercise, expiration or cancellation of Warrants, have been made:
Date of
|
Amount of Decrease in
Number of Warrants of this Global Warrant Certificate |
Amount of Increase in
Number of Warrants of this Global Warrant Certificate |
Number of Warrants of
this Global Warrant Certificate Following such Decrease (or Increase) |
|||||
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EXHIBIT B-1
EXERCISE FORM FOR REGISTERED HOLDERS
HOLDING INDIVIDUAL WARRANTS
(To be executed upon exercise of Individual Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by _______________________ Individual Warrants, to purchase Warrant Shares and (check one):
¨ | herewith tenders payment for the Warrant Shares to the order of Hycroft Mining Corporation in the amount of $________ in accordance with the terms of the Warrant Agreement; provided, however, that any such exercise during a Liquidity Event Exercise Period shall be subject to, and conditioned upon, the consummation of the applicable Liquidity Event; |
¨ | if during a Liquidity Event Exercise Period, herewith tenders, pursuant to the cashless exercise provisions of Section 4.5(b) of the Warrant Agreement, that number of the Individual Warrants specified above equal to the quotient obtained by dividing (x) the aggregate Exercise Amount for the Individual Warrants specified above by (y) the Fair Market Value of one Warrant Share as of the Exercise Date, all determined in accordance with the terms of the Warrant Agreement; provided, however, that any such Cashless Exercise during a Liquidity Event Exercise Period shall be subject to, and conditioned upon, the consummation of the applicable Liquidity Event; or |
¨ | if on the applicable Exercise Date the Warrant Shares are then listed for trading on a National Securities Exchange, herewith tenders, pursuant to the cashless exercise provisions of Section 4.5(b) of the Warrant Agreement, that number of the Individual Warrants specified above equal to the quotient obtained by dividing (x) the aggregate Exercise Amount for the Individual Warrants specified above by (y) the Fair Market Value of one Warrant Share as of the Exercise Date, all determined in accordance with the terms of the Warrant Agreement. |
The undersigned requests that the Warrant Shares issuable upon exercise of the Individual Warrants specific above be in registered form in the authorized denominations, registered in such names and delivered, all as specified in accordance with the instructions set forth below; provided, that no Warrant Shares shall be delivered to, or for the account of, any Person to whom the undersigned would not have been permitted to sell or otherwise transfer Warrants pursuant to Section 6.1(g) of the Warrant Agreement.
NOTE: THIS EXERCISE FORM MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EARLIER OF (i) THE SEVEN (7) YEAR ANNIVERSARY OF THE EFFECTIVE DATE OR (ii) IF A LIQUIDITY EVENT OCCURS PRIOR TO THE DATE SPECIFIED IN CLAUSE (i), THE DATE THAT IS THE LATER OF (X) THE DATE THAT IS TWENTY (20) BUSINESS DAYS AFTER THE COMPANY DELIVERS A LIQUIDITY EVENT NOTICE IN RESPECT OF SUCH LIQUIDITY EVENT TO EACH REGISTERED HOLDER AT SUCH HOLDER’S ADDRESS APPEARING ON THE WARRANT REGISTRAR AND (Y) THE DATE THAT IS THREE (3) BUSINESS DAYS PRIOR TO THE DATE OF CONSUMMATION OF SUCH LIQUIDITY EVENT. THE WARRANT AGENT SHALL NOTIFY YOU OF THE ADDRESS, PHONE NUMBER AND FACSIMILE NUMBER WHERE YOU CAN CONTACT THE WARRANT AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED. NAME OF REGISTERED HOLDER:
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Name | ||
Address | ||
Delivery Address (if different) | ||
Signature | ||
Social Security or Other Taxpayer Identification Number of Holder |
||
Note: If the Warrant Shares are to be registered in a name other than that in which the Individual Warrants are registered, the signature of the holder hereof must be guaranteed. | ||
SIGNATURE GUARANTEED BY: | ||
Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program. |
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EXHIBIT B-2
EXERCISE FORM FOR BENEFICIAL HOLDERS
HOLDING WARRANTS THROUGH THE DEPOSITORY TRUST COMPANY
TO BE COMPLETED BY DIRECT PARTICIPANT
IN THE DEPOSITORY TRUST COMPANY
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by _______________________ Warrants held for its benefit through the book-entry facilities of Depository Trust Company (the “Depositary”), to purchase Warrant Shares and (check one):
¨ | herewith tenders payment for Warrant Shares to the order of Hycroft Mining Corporation in the amount of $__________ in accordance with the terms of the Warrant Agreement; provided, however, that any such exercise during a Liquidity Event Exercise Period shall be subject to, and conditioned upon, the consummation of the applicable Liquidity Event; |
¨ | if during a Liquidity Event Exercise Period, herewith tenders, pursuant to the cashless exercise provisions of Section 4.5(b) of the Warrant Agreement, that number of the Warrants specified above equal to the quotient obtained by dividing (x) the aggregate Exercise Amount for the Warrants specific above by (y) the Fair Market Value of one Warrant Share as of the Exercise Date, all determined in accordance with the terms of the Warrant Agreement; provided, however, that any such Cashless Exercise during a Liquidity Event Exercise Period shall be subject to, and conditioned upon, the consummation of the applicable Liquidity Event; or |
¨ | if on the applicable Exercise Date the Warrant Shares are then listed for trading on a National Securities Exchange, herewith tenders, pursuant to the cashless exercise provisions of Section 4.5(b) of the Warrant Agreement, that number of the Warrants specific above equal to the quotient obtained by dividing (x) the aggregate Exercise Amount for the Warrants specified above by (y) the Fair Market Value of one Warrant Share as of the Exercise Date, all determined in accordance with the terms of the Warrant Agreement. |
69
The undersigned requests that the Warrant Shares issuable upon exercise of the Warrants specific above be in registered form in the authorized denominations, registered in such names and delivered, all as specific in accordance with the instructions set forth below; provided that (x) if the Warrant Shares are evidenced by global securities, the Warrant Shares shall be registered in the name of the Depositary or its nominee and (y) no Warrant Shares shall be delivered to, or for the account of, any Person to whom the undersigned would not have been permitted to sell or otherwise transfer Warrants pursuant to Section 6.1(g) of the Warrant Agreement
Dated:
NOTE: THIS EXERCISE FORM MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EARLIER OF (i) THE SEVEN (7) YEAR ANNIVERSARY OF THE EFFECTIVE DATE AND (ii) IF A LIQUIDITY EVENT OCCURS PRIOR TO THE DATE SPECIFIED IN CLAUSE (i), THE DATE THAT IS THE LATER OF (X) THE DATE THAT IS TWENTY (20) BUSINESS DAYS AFTER THE COMPANY DELIVERS A LIQUIDITY EVENT NOTICE IN RESPECT OF SUCH LIQUIDITY EVENT TO EACH REGISTERED HOLDER AT SUCH HOLDER’S ADDRESS APPEARING ON THE WARRANT REGISTRAR AND (Y) THE DATE THAT IS THREE (3) BUSINESS DAYS PRIOR TO THE DATE OF CONSUMMATION OF SUCH LIQUIDITY EVENT. THE WARRANT AGENT SHALL NOTIFY YOU (THROUGH THE CLEARING SYSTEM) OF (1) THE WARRANT AGENT’S ACCOUNT AT THE DEPOSITARY TO WHICH YOU MUST DELIVER YOUR WARRANTS ON THE EXERCISE DATE AND (2) THE ADDRESS, PHONE NUMBER AND FACSIMILE NUMBER WHERE YOU CAN CONTACT THE WARRANT AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED. NAME OF DIRECT PARTICIPANT IN THE DEPOSITARY:
(PLEASE PRINT)
ADDRESS:
CONTACT NAME:
ADDRESS:
TELEPHONE (INCLUDING INTERNATIONAL CODE):
FAX (INCLUDING INTERNATIONAL CODE):
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE):
ACCOUNT FROM WHICH WARRANTS ARE BEING DELIVERED:
DEPOSITARY ACCOUNT NO.
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WARRANT EXERCISE FORMS WILL BE VALID ONLY IF DELIVERED IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN THIS FORM (OR AS OTHERWISE DIRECTED), MARKED TO THE ATTENTION OF “WARRANT EXERCISE”. WARRANT BENEFICIAL HOLDER DELIVERING WARRANTS, IF OTHER THAN THE DIRECT DEPOSITARY PARTICIPANT DELIVERING THIS WARRANT EXERCISE FORM:
NAME: | ||
(PLEASE PRINT) | ||
CONTACT NAME: | ||
TELEPHONE (INCLUDING INTERNATIONAL CODE): | ||
FAX (INCLUDING INTERNATIONAL CODE): | ||
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE): | ||
ACCOUNT TO WHICH THE WARRANT SHARES ARE TO BE CREDITED: | ||
DEPOSITARY ACCOUNT NO. |
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FILL IN FOR DELIVERY OF THE WARRANT SHARES, IF OTHER THAN TO THE PERSON DELIVERING THIS WARRANT EXERCISE FORM:
NAME:____________________________ |
(PLEASE PRINT) |
ADDRESS: ______________________________ |
CONTACT NAME: ______________________________ |
TELEPHONE (INCLUDING INTERNATIONAL CODE): ___________________________ |
FAX (INCLUDING INTERNATIONAL CODE): ______________________________ |
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER (IF APPLICABLE): |
NUMBER OF WARRANTS BEING EXERCISED:______________________________
(ONLY ONE EXERCISE PER WARRANT EXERCISE NOTICE) |
Signature: ______________________________ |
Name: ______________________________ |
Capacity in which Signing: ______________________________ |
SIGNATURE GUARANTEED BY: ______________________________ |
Signatures must be guaranteed by a participant in the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program. |
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EXHIBIT C-1
FORM OF ASSIGNMENT
(To be executed only upon assignment of Individual Warrants)
For value received, ______________________________ hereby sells, assigns and transfers unto the Assignee(s) named below the rights represented by the Individual Warrants listed opposite the respective name(s) of the Assignee(s) named below which are evidenced by the Individual Warrant Certificate that accompanies this Assignment and all other rights of the Registered Holder under such Individual Warrant Certificate with respect to such Individual Warrants, and does hereby irrevocably constitute and appoint ______________________________ attorney, to transfer said Individual Warrant Certificate on the books of the within-named Company with respect to the number of Individual Warrants set forth below, with full power of substitution in the premises:’
Name(s)
of Assignee(s) |
Address | No. of Individual Warrants | ||
And if said number of Individual Warrants shall not be all the Individual Warrants represented by the Individual Warrant Certificate a new Individual Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Individual Warrants represented by said Individual Warrant Certificate.
Dated: , 20____ | Signature | |
Note: The above signature should correspond exactly with the name on the face of this Individual Warrant Certificate |
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EXHIBIT C-2
FORM OF ASSIGNMENT
(To be executed only upon assignment of Global Warrant Certificate)*
For value received, ________________________ hereby sells, assigns and transfers unto the Assignee(s) named below the rights represented by the Warrants evidenced by such Global Warrant Certificate listed opposite the respective name(s) of the Assignee(s) named below and all other rights of the Registered Holder under the within Global Warrant Certificate with respect to such Warrants, and does hereby irrevocably constitute and appoint ____________________ attorney, to transfer said Global Warrant Certificate on the books of the within-named Company with respect to the number of Warrants set forth below, with full power of substitution in the premises:
Name(s)
of Assignee(s) |
Address | No. of Warrants | ||
And if said number of Warrants shall not be all the Warrants represented by the Global Warrant Certificate, a new Global Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Warrants represented by said Global Warrant Certificate.
Dated: , 20 | Signature | |
Note: The above signature should correspond exactly with the name on the face of this Global Warrant Certificate |
*To be used only in circumstances specified in Section 6.1(e) of Warrant Agreement.
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Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Amendment No. 1 to the Registration Statement on Form S-4, our report dated March 11, 2020 (which includes an explanatory paragraph relating to Mudrick Capital Acquisition Corporation’s ability to continue as a going concern) relating to the balance sheets of Mudrick Capital Acquisition Corporation as of December 31, 2019 and 2018, and the related statements of operations, changes in stockholders’ equity and cash flows for the years ended December 31, 2019 and 2018, and to the reference to our Firm under the caption “Experts” in the Registration Statement.
/s/ WithumSmith+Brown, PC | |
New York, New York | |
April 7, 2020 |
Exhibit 23.4
Consent of Independent Registered PUBLIC ACCOUNTING FIRM
We hereby consent to the inclusion in this Form Amendment No. 1 to S-4 (No. 333-236460) and related joint proxy statement/prospectus of Mudrick Capital Acquisition Corporation of our report dated February 21, 2020, with respect to the consolidated balance sheets of Hycroft Mining Corporation and subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. We also consent to the reference to our firm under the heading “Experts” in the Registration Statement and joint proxy statement/prospectus.
Our report dated February 21, 2020 contains an explanatory paragraph that states that the Company’s significant recurring operating losses, lack of liquidity and capital, and significant capital needed to restart operations raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Plante & Moran, PLLC
Denver, Colorado
April 3, 2020
Exhibit 23.5
CONSENT OF GREENHILL & CO. CANADA LTD.
April 7, 2020
The Board of Directors
Hycroft Mining Corporation
8181 E. Tufts Ave., Suite 510
Denver, CO 80237, USA
To the Board of Directors of Hycroft Mining Corporation:
We hereby consent to the inclusion of our opinion letter, dated January 13, 2020, to the Board of Directors of Hycroft Mining Corporation (“Hycroft”) as Annex N to, and to the description of such opinion and to the references to our name under the headings “SUMMARY OF THE JOINT PROXY STATEMENT/PROSPECTUS – Opinion of Seller’s Financial Advisor,” “THE BUSINESS COMBINATION – Background of the Business Combination,” “THE BUSINESS COMBINATION – Opinion of Seller’s Financial Advisor,” and “THE BUSINESS COMBINATION – Certain Seller Projected Financial Information” in, the joint proxy statement/prospectus, submitted for filing on April 7, 2020, relating to the proposed transaction involving Hycroft and Mudrick Capital Acquisition Corporation (the “Company”), which joint proxy statement/prospectus is part of the Amendment No. 1 to Registration Statement on Form S-4 of the Company (the “Registration Statement”). In giving the foregoing consent, we do not admit (1) that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “Securities Act”), or the rules and regulations of the Securities and Exchange Commission (the “Commission”) promulgated thereunder, or (2) that we are “experts” with respect to any part of the Registration Statement within the meaning of the term “expert” as used in the Securities Act and the rules and regulations of the Commission promulgated thereunder. Additionally, such consent does not cover any future amendments to the Registration Statement.
GREENHILL & CO., LLC | ||
By: | /s/ Kevin Constantino | |
Kevin Constantino | ||
Managing Director |
GREENHILL & CO. CANADA LTD. | ||
By: | /s/ Michael Nessim | |
Michael Nessim | ||
Managing Director |
New York, NY
Toronto, Canada
April 7, 2020
Exhibit 99.1
MUDRICK CAPITAL ACQUISITION CORPORATION
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [●], 2020
The undersigned hereby appoints Jason Mudrick and Glenn Springer, and each of them, proxies and attorneys-in-fact, each with the power of substitution and revocation, and hereby authorizes and instructs each to represent and vote, in the manner directed below, all the shares of common stock of Mudrick Capital Acquisition Corporation (“MUDS”) held of record by the undersigned at the close of business on [●], 2020 at the Special Meeting of Stockholders to be held at the offices of Weil, Gotshal & Manges LLP, located at 767 Fifth Avenue, New York, NY 10153, on [●], 2020 at [●], New York time, or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED “FOR” PROPOSAL 1 (THE BUSINESS COMBINATION PROPOSAL) BELOW, “FOR” EACH OF PROPOSALS 2 THROUGH 8 (THE CHARTER PROPOSALS) BELOW, “FOR” THE ELECTION OF ALL OF THE DIRECTORS IN PROPOSAL 9 (THE DIRECTOR ELECTION PROPOSAL) BELOW, “FOR” PROPOSAL 10 (THE INCENTIVE PLAN PROPOSAL) AND “FOR” PROPOSAL 11 (THE NASDAQ PROPOSAL) BELOW.
THE BOARD OF DIRECTORS OF MUDS RECOMMENDS A VOTE “FOR” PROPOSAL 1 (THE BUSINESS COMBINATION PROPOSAL) BELOW, “FOR” EACH OF PROPOSALS 2 THROUGH 8 (THE CHARTER PROPOSALS) BELOW, “FOR” THE ELECTION OF ALL OF THE DIRECTORS IN PROPOSAL 9 (THE DIRECTOR ELECTION PROPOSAL) BELOW, “FOR” PROPOSAL 10 (THE INCENTIVE PLAN PROPOSAL) AND “FOR” PROPOSAL 11 (THE NASDAQ PROPOSAL) BELOW. Each of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are cross-conditioned on the approval of each other. The Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal.
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER: ý
Proposal | For | Against | Abstain | |
1. | Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt (a) the purchase agreement, dated as of January 13, 2020 and amended on February 26, 2020 (as it may be further amended from time to time, the “Purchase Agreement”), by and among MUDS, MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of MUDS (“Acquisition Sub”) and Hycroft Mining Corporation, a Delaware corporation (“Seller”), (b) the exchange agreement, dated as of January 13, 2020 (the “Exchange Agreement”), by and among Seller, Acquisition Sub and certain investment funds signatory thereto and (c) the conversion and consent agreement, dated as of January 13, 2020, by and among Seller and certain investment funds signatory thereto and (d) all of the transactions contemplated by the agreements in the foregoing clauses (a) — (c) in the order provided for in such agreements (collectively, the “business combination,” and such proposal, the “Business Combination Proposal”). Copies of the Purchase Agreement and the Exchange Agreement are attached to the accompanying joint proxy statement/prospectus as Annex A and Annex B, respectively. | ¨ | ¨ | ¨ |
The Charter Proposals — To consider and vote upon seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted, the following material differences between MUDS’ existing charter and the proposed charter, which we refer to as the “Charter Proposals”: |
2. | Proposal No. 2 — Increase the total number of authorized shares of all classes of capital stock from 111,000,000 shares to [•], which would consist of (a) [•] shares of Class A common stock and (b) [•] shares of preferred stock; | ¨ | ¨ | ¨ |
3. | Proposal No. 3 — Declassify the MUDS board of directors, so that each member of the MUDS board of directors will be elected at each annual meeting of stockholders, as opposed to MUDS having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term, and make certain related changes; | ¨ | ¨ | ¨ |
4. | Proposal No. 4 — Provide that certain transactions are not “corporate opportunities” and that each of Mudrick Capital Management, L.P. (“Mudrick Capital”), Whitebox Advisors, LLC (“Whitebox”), Highbridge Capital Management, LLC (“Highbridge”), Aristeia Capital, LLC (“Aristeia”) and Wolverine Asset Management, LLC (“Wolverine”) and the investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine and their respective successors and affiliates and all of their respective partners, principals, directors, officers, members, managers, equity holders and/or employees, including any of the foregoing who served as officers or directors of MUDS are not subject to the doctrine of corporate opportunity; | ¨ | ¨ | ¨ |
5. | Proposal No. 5 — Permit stockholder action by written consent; | ¨ | ¨ | ¨ |
6. | Proposal No. 6 — Provide that MUDS will not be governed by Section 203 of the Delaware General Corporation Law (“DGCL”) and approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes the investment funds affiliated with Mudrick Capital Acquisition Holdings LLC, a Delaware limited liability company and their respective successors and affiliates and the investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine and their respective successors and affiliates from the definition of “interested stockholder,” and to make certain related changes; | ¨ | ¨ | ¨ |
7. | Proposal No. 7 — Clarify that the exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation shall not apply to any action to enforce any liability or duty under the Securities Act or the Exchange Act for which there is exclusive federal or concurrent federal and state jurisdiction; | ¨ | ¨ | ¨ |
8. | Proposal No. 8 — Authorize all other proposed changes, including, among others, those (i) resulting from the business combination, including changing the post-business combination corporate name from “Mudrick Capital Acquisition Corporation” to “Hycroft Mining Holding Corporation” and removing certain provisions relating to MUDS’ prior status as a blank check company and Class B common stock that will no longer apply upon consummation of the business combination, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect. | ¨ | ¨ | ¨ |
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The undersigned hereby acknowledges receipt of the accompanying notice of special meeting of stockholders and proxy statement.
Date: ____________________, 2020 | ||
Print Name of Stockholder |
Signature of Stockholder or Authorized Signatory |
Name of Authorized Signatory (if applicable) |
Title of Authorized Signatory (if applicable) |
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE BY FACSIMILE TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AT (212) 509-5152 OR BY MAIL TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, ATTN: PROXY GROUP AT 1 State Street, New York, NY 10004. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IF YOU ATTEND THE SPECIAL MEETING IN PERSON.
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Exhibit 99.9
April 7, 2020
CONSENT OF DUFF & PHELPS, LLC
We hereby consent to the inclusion of our opinion letter, dated January 13, 2020, to the Board of Directors of Mudrick Capital Acquisition Corporation (“MUDS”) as Annex M to the joint proxy statement/prospectus, which forms a part of Amendment No. 1 to the Registration Statement on Form S-4 of MUDS (the “Registration Statement”), related to the proposed transaction (as defined in the Registration Statement), and references to our firm and our opinion, including the quotation or summarization of such opinion, in such joint proxy statement/prospectus. The foregoing consent applies only to Amendment No. 1 to the Registration Statement being filed with the Securities and Exchange Commission today and not to any other amendments or supplements to the Registration Statement, and our opinion is not to be filed with, included in or referred to in whole or in part in any other registration statement (including any other amendments to the above-mentioned Registration Statement), proxy statement or any other document, except in accordance with our prior written consent.
By giving such consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder, nor do we thereby admit that we are experts with respect to any part of such Registration Statement within the meaning of the term “expert” as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
/s/ Duff & Phelps, LLC
Duff & Phelps, LLC
Duff & Phelps, LLC
Floor 31 New York, NY 10055 |
T +1 212 871 2000 | www.duffandphelps.com |
Exhibit 99.10
HYCROFT MINING CORPORATION
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [●], 2020
The undersigned hereby appoints Randy Buffington and Stephen M. Jones, and each of them, proxies and attorneys-in-fact, each with the power of substitution and revocation, and hereby authorizes and instructs each to represent and vote, in the manner directed below, all the shares of common stock of Hycroft Mining Corporation (“Seller”) held of record by the undersigned at the close of business on [●], 2020 at the Special Meeting of Stockholders to be held at Seller’s offices at 8181 E. Tufts Ave., Suite 510, Denver, Colorado 80237 on [●], 2020 at [●] a.m. (Mountain Time), or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED “FOR” PROPOSAL 1 (THE SELLER BUSINESS COMBINATION PROPOSAL) BELOW, “FOR” PROPOSAL 2 (THE SELLER DISSOLUTION PROPOSAL) BELOW and “FOR” PROPOSAL 3 (THE SELLER ADJOURNMENT PROPOSAL).
THE BOARD OF DIRECTORS OF SELLER RECOMMENDS A VOTE “FOR” PROPOSAL 1 (THE SELLER BUSINESS COMBINATION PROPOSAL) BELOW, “FOR” PROPOSAL 2 (THE SELLER DISSOLUTION PROPOSAL) BELOW, AND “FOR” PROPOSAL 3 (THE SELLER ADJOURNMENT PROPOSAL) BELOW. The Seller Business Combination Proposal is not conditioned upon approval of the Seller Dissolution Proposal, but the Seller Dissolution Proposal is conditioned upon the approval of the Seller Business Combination Proposal and SELLER will not proceed with the SELLER Dissolution Proposal if the Seller Business Combination Proposal is not approved by SELLER’s stockholders. NO OTHER PROPOSAL IS CONDITIONED ON THE APPROVAL OF ANY OTHER PROPOSAL.
PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER: x
Proposal | For | Against | Abstain | |
1. | Proposal No. 1 — The Seller Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the purchase agreement, dated as of January 13, 2020 and amended on February 26, 2020 (as it may be further amended from time to time, the “Purchase Agreement”), by and among Mudrick Capital Acquisition Corporation, a Delaware corporation (“MUDS”), MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of MUDS (“Acquisition Sub”) and Seller, pursuant to which Acquisition Sub will acquire from Seller the issued and outstanding equity interests of Allied Nevada Gold Holdings, LLC, a Nevada limited liability company (“Nevada Gold”), Allied VGH Inc., a Nevada corporation (“Allied VGH”) and Allied Nevada Delaware Holdings Inc., a Delaware corporation (“Allied Delaware” and, together with Nevada Gold and Allied VGH, the “Hycroft direct subsidiaries”), the direct subsidiaries of Seller, and MUDS or Acquisition Sub will acquire substantially all of the other assets and assume substantially all of the liabilities of Seller (the “acquisition,” and such equity interests and assets and liabilities together, the “Hycroft business”), in exchange for shares of HYMC Class A common stock (as defined herein), the 1.5 Lien Notes (as defined herein) and the Excess Notes (as defined herein), and the parties will consummate the other transactions contemplated by the Purchase Agreement, on the terms and subject to the conditions set forth therein (such transaction the “business combination,” and such proposal, the “Seller Business Combination Proposal”). A copy of the Purchase Agreement is attached to the accompanying joint proxy statement/prospectus as Annex A. | ¨ | ¨ | ¨ |
2. | Proposal No. 2 — The Seller Dissolution Proposal — To consider and vote upon a proposal to approve and adopt the plan of dissolution of Seller, including the distribution of shares of HYMC Class A common stock received in the business combination and the dissolution and liquidation of Seller contemplated thereby, subject to the approval of the Seller Business Combination Proposal and the consummation of the business combination contemplated thereby. A copy of the plan of dissolution is attached to the accompanying joint proxy statement/prospectus as Annex E. | ¨ | ¨ | ¨ |
3. | Proposal No. 3 — Seller Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Seller special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals to be submitted for stockholder approval at the Seller special meeting, which we refer to as the “Seller Adjournment Proposal.” | ¨ | ¨ | ¨ |
The undersigned hereby acknowledges receipt of the accompanying notice of special meeting of stockholders and proxy statement.
Date: ____________________, 2020 | ||
Print Name of Stockholder |
Signature of Stockholder or Authorized Signatory |
Name of Authorized Signatory (if applicable) |
Title of Authorized Signatory (if applicable) |
|
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE BY MAIL TO SELLER, ATTN: CORPORATE SECRETARY AT 8181 E. TUFTS AVE., SUITE 510, DENVER, CO 80237. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IF YOU ATTEND THE SPECIAL MEETING IN PERSON.
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