PLATINUM GROUP METALS LTD. as Borrower - and - PLATINUM GROUP METALS (RSA) PROPRIETARY LIMITED as Guarantor - and - LIBERTY METALS & MINING HOLDINGS, LLC as Agent - and - LIBERTY METALS & MINING HOLDINGS, LLC as Production Payment Termination Fee...
Execution Version
as Borrower
- and -
PLATINUM GROUP METALS (RSA) PROPRIETARY LIMITED
as Guarantor
- and -
LIBERTY METALS & MINING HOLDINGS, LLC
as Agent
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LIBERTY METALS & MINING HOLDINGS, LLC
as Production
Payment Termination Fee Holder
- and -
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES
HERETO
as Lenders
| THIRD MODIFICATION AGREEMENT TO THE SECOND
AMENDED AND RESTATED CREDIT AGREEMENT |
Dated as of May 10, 2018
Third Modification Agreement to the Second Amended and Restated Credit Agreement
Execution Version
THIRD MODIFICATION AGREEMENT TO THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT made as of the 10th day of May, 2018
BETWEEN:
PLATINUM GROUP METALS LTD., a company existing under the laws of British Columbia
(hereinafter referred to as the “Borrower”)
AND:
PLATINUM GROUP METALS (RSA) PROPRIETARY LIMITED, a company existing under the laws of South Africa
(hereinafter referred to as the “Guarantor”, and together with the Borrower, the “Credit Parties”)
AND:
LIBERTY METALS & MINING HOLDINGS, LLC, a limited liability company formed under the laws of Delaware, as administrative agent
(hereinafter referred to as the “Agent” or the “Production Payment Termination Fee Holder”, as applicable)
AND:
THE SEVERAL LENDERS FROM TIME TO TIME PARTY HERETO AS LENDERS (together with their respective successors and permitted assigns, the “Lenders” and together with the Agent and the Production Payment Termination Fee Holder, the “Finance Parties”)
BACKGROUND:
A. The Credit Parties and the Finance Parties entered into a second amended and restated second lien credit agreement on February 12, 2018 (the “A&R CA”), as amended by a first modification agreement to the second amended and restated credit agreement dated as of February 28, 2018 (the “First Modification Agreement”).
B. The Finance Parties provided certain consents and waivers in respect of the A&R CA (as amended by the First Modification Agreement) by way of an email dated March 28, 2018 (the “Consent and Waiver”).
C. The Credit Parties and the Finance Parties entered into a second modification agreement to the second amended and restated credit agreement dated as of May 1, 2018 (the “Second Modification Agreement” and together with the Consent and Waiver and the A&R CA and the First Modification Agreement, the “Credit Agreement”).
Third Modification Agreement to the Second Amended and Restated Credit Agreement
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D. The Credit Parties have requested and the Finance Parties have agreed to amend certain provisions in the Credit Agreement.
E. The Finance Parties have agreed to the foregoing on and subject to the terms of this Agreement.
AGREEMENTS
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION
| 1.1 |
Defined Terms |
|
Unless otherwise defined herein, all defined terms shall for all purposes of this Agreement, or any amendment, substitution, supplement, replacement, restatement or addition hereto, have the meanings given in the Credit Agreement, as amended. | |
| 1.2 |
Other Usages |
|
References to “this Agreement”, “the Agreement”, “hereof”, “herein”, “hereto” and like references refer to this Agreement and not to any particular Article, Section or other subdivision of this Agreement. Any references herein to any agreements or documents shall mean such agreements or documents as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and thereof. | |
| 1.3 |
Headings |
|
The division of this Agreement into Articles and Sections and the insertion of headings in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. | |
| 1.4 |
Applicable Law |
|
This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein. Any legal action or proceeding with respect to this Agreement may be brought in the courts of the Province of British Columbia and, by execution and delivery of this Agreement, the parties hereby accept for themselves and in respect of their property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each party irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party to the address prescribed by Sections 10.1 or 10.2 of the Credit Agreement, as applicable, such service to become effective five Business Days after such mailing. Nothing herein shall limit the right of any party to serve process in any manner permitted by law or to commence legal proceedings or otherwise proceed against any other party in any other jurisdiction. |
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| 1.5 |
Time of the Essence |
|
Time shall in all respects be of the essence of this Agreement. |
ARTICLE 2
AMENDMENTS
| 2.1 |
Amendment to Stated Maturity Date |
|
The definition of “Stated Maturity Date” set out in Section 1.1 of the A&R CA is hereby amended by deleting that definition in its entirety and replacing it with the following: |
““Stated Maturity Date” means October 31, 2019.”.
| 2.2 |
Subsequent Amendments | |
| (a) |
The definitions of “First Outside Financing Date”, “Second Outside Financing Date” and “Second Required Financing” and set out in Section 1.1 of the A&R CA are hereby deleted in their entirety. | |
| (b) |
Section 3.3 of the A&R CA is hereby amended by deleting that section in its entirety and replacing it with the following: “The Credit Parties shall use the first US$12 million of the gross proceeds from the First Required Financing to reduce the Facility Indebtedness. | |
|
If the Credit Parties or any of the Subsidiaries close one or more equity or debt financings (excluding intercompany financings between Credit Parties or the Subsidiaries, the First Required Financing) having a value exceeding $500,000 in the aggregate, the Borrower shall pay or cause to be paid 50% of the proceeds of such financings, net of reasonable financing costs (the “Cash Sweep”), to the Production Payment Termination Fee Holder in prepayment of the Production Payment Termination Obligations until such obligations are paid in full and discharged and thereafter to the Lenders in prepayment of the Facility. If any warrants or other convertible securities issued by or on behalf of a Credit Party are exercised, 50% of the proceeds of such exercise shall be paid by the applicable Credit Party to (i) the Production Payment Termination Fee Holder in prepayment of the Production Payment Termination Obligations until such obligations are paid in full and discharged and (ii) thereafter to the Lenders in prepayment of the Facility.”. | ||
| (c) |
Section 3.9 of the A&R CA is hereby amended by deleting that section in its entirety and replacing it with the following: “All amounts paid by or on behalf of the Credit Parties to the Finance Parties, including in connection with the First Required Financing, shall be applied first to the Production Payment Termination Obligations until such obligations are paid in full and discharged and thereafter to the Lenders in payment of the remaining Facility Indebtedness.”. | |
| (d) |
Section 7.1(n) of the A&R CA is hereby amended by deleting that section in its entirety and replacing it with the following: “by no later than May 31, 2018, complete one or more offerings of subordinated debt (in form and substance satisfactory to the Agent) or common shares or securities convertible into or exercisable for common shares or a combination of the foregoing for gross proceeds on closing of not less than $15,000,000 in the aggregate (collectively the “First Required Financing”);”. | |
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| (e) |
Section 7.2(z) is amended by deleting the “and” that follows the “;”. | |
| (f) |
Section 7.2(aa) is amended by deleting the “.” and inserting “;”. | |
| (g) |
A new Section 7.2(bb) is added immediately following Section 7.2(aa) which new section shall provide as follows: “The Credit Parties agree to provide the Agent at least 15 Business Days prior written notice of (i) any of the proceedings referred to in Section 8.1(f) of the Credit Agreement or (ii) any intention to institute any resolution referred to in Section 8.1(i) of the Credit Agreement; and”. | |
| (h) |
A new Section 7.2(cc) is added immediately following Section 7.2(bb) which new section shall provide: “The Borrower will use its reasonable commercial efforts to qualify a registration statement in respect of the Shares underlying the warrants issued pursuant to the First Required Financing in the time and in the manner required by the indenture governing such warrants.”. | |
| (i) |
Section 2.4 of the A&R CA is hereby amended by deleting that section in its entirety and replacing it with the following: “Interest shall accrue (i) on the principal amount of the Advance from and including the date of advance to the Borrower, (ii) on all accrued and capitalized interest thereon and (iii) on all overdue amounts outstanding in respect of interest, costs or other fees or expenses payable under the Facility Documents, in each case at the rate equal to LIBOR plus 9.50% (nine and one half percent) per annum, calculated daily and compounded at all times until the Stated Maturity Date monthly and shall be capitalized and thereafter constitute principal hereunder before as well as after each of maturity, default and judgment.”. |
ARTICLE 3
GUARANTOR ACKNOWLEDGEMENT
| 3.1 |
Guarantor Acknowledgement |
|
The Guarantor hereby acknowledges and confirms that the Guarantee is continuing and is in full force and effect, notwithstanding the amendments to the Credit Agreement effected hereby. |
ARTICLE 4
WAIVER AND CONDITIONS PRECEDENT
| 4.1 |
Waiver |
The Majority Creditors hereby waive the application of the restrictive covenant set out in Section 7.3(g) of the Credit Agreement prohibiting the Borrower from entering into any agreement other than the Material Agreements described in Schedule D of the Credit Agreement concerning any shares or securities of any Material Subsidiary or the Borrower and hereby permit the Borrower to enter into an amended and restated subscription agreement with Xxxxxx Consolidated Investments Limited (“HCI”) dated on or about May 9, 2018 (the “HCI Agreement”), provided that the HCI Agreement (i) relates only to equity securities of the Borrower, (ii) does not conflict with the terms of (or the rights of the Agent under any agreement between the Agent, the Borrower and its Affiliates and (iii) be satisfactory to the Lenders.
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| 4.2 |
Conditions Precedent to the Effectiveness of this Agreement |
|
Articles 1, 3 and 4 and 5 and Sections 2.2(e), 2.2(f) and 2.2(g) are effective as of the date of this Agreement. Sections 2.1, 2.2(a), 2.2(b), 2.2(c), 2.2(d), 2.2(h) and 2.2(i) shall only become effective if (i) prior to May 31, 2018: (a) the Borrower has completed one or more offerings of subordinated debt (in form and substance satisfactory to the Agent) or common shares or securities convertible into or exercisable for common shares or a combination of the foregoing for gross proceeds on closing of not less than US$15 million in the aggregate; and (b) the first US$12 million of the gross proceeds from such financings have been paid by the Borrower to the Lender to reduce the Facility Indebtedness; and (ii) the Credit Parties are not otherwise in Default from the date hereof until the conditions in (i) above are satisfied. |
ARTICLE 5
MISCELLANEOUS
| 5.1 |
General Rule |
|
Subject to the terms and conditions herein contained, the Credit Agreement, as amended, is hereby further amended to the extent necessary to give effect to the provisions of this Agreement and to incorporate the provisions of this Agreement into the Credit Agreement. | |
| 5.2 |
Future References to the Credit Agreement |
|
On and after the date of this Agreement, (i) each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in any related document to the “Credit Agreement”, “thereunder”, “thereof”, or words of like import referring to the Credit Agreement, and (ii) each reference in the other Facility Documents to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended, modified, supplemented, restated or replaced from time to time. The Credit Agreement, as amended, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. | |
| 5.3 |
Enurement |
|
This Agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns. | |
| 5.4 |
Conflict |
|
If any provision of this Agreement is inconsistent or conflicts with any provision of the Credit Agreement, the relevant provision of this Agreement shall prevail and be paramount. |
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| 5.5 |
Counterparts |
|
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. | |
| 5.6 |
Entire Agreement |
|
This Agreement amends and modifies the Credit Agreement and together with it and the agreements referred to therein and delivered pursuant thereto, constitute the entire agreement between the parties hereto and supersedes any prior agreements, undertakings, declarations, representations and understandings, both written and verbal, in respect of the subject matter hereof. | |
| 5.7 |
Amendments |
|
This Agreement may only be amended or modified by further written instrument, executed and delivered by each of the parties hereto. | |
| 5.8 |
Production Payment Agreement Termination Agreement |
|
The Finance Parties hereby agree to extend the date that the Reduced Termination Fee may be paid to May 31, 2018. |
[signature pages follow]
IN WITNESS WHEREOF the parties hereto have executed this Agreement under the hands of their proper officers duly authorized on their behalf on the date first above written.
| Per: | /s/ Xxxxx Xxxxxx | |
| Authorized Signatory | ||
| Per: | /s/ R. Xxxxxxx Xxxxx | |
| Authorized Signatory |
PLATINUM GROUP METALS (RSA) PROPRIETARY LIMITED
| Per: | /s/ Xxxxx Xxxxxx | |
| Authorized Signatory | ||
| Per: | /s/ R. Xxxxxxx Xxxxx | |
| Authorized Signatory |
LIBERTY METALS & MINING HOLDINGS, LLC, as Agent
| Per: | /s/ Xxxx Xxxxx | |
| Authorized Signatory |
LIBERTY METALS & MINING HOLDINGS, LLC, as Lender and Production Payment Termination Fee Holder
| Per: | /s/ Xxxx Xxxxx | |
| Authorized Signatory |
Third Modification Agreement to the Second Amended and Restated Credit Agreement
