PolyMet Mining Corp. Richmond, BC V7B 1C3 CANADA Ladies and Gentlemen:
EXHIBIT
99.30
390 -
0000 Xxxxxxxx Xxxx
Xxxxxxxx,
XX X0X 0X0
XXXXXX
Ladies
and Gentlemen:
The
undersigned (the “Investor”) hereby confirms and
agrees with PolyMet Mining Corp., a British Columbia company (the “Company”), as
follows:
1. Subject
to the terms and conditions of this subscription agreement (this “Subscription Agreement”), the
Investor will purchase from the Company, and the Company will issue and sell to
the Investor on a private placement basis, an aggregate of 15,000,000 common
shares (the “Shares”) of
the Company, no par value (the “Common Shares”), for a
purchase price of US$2.00 per Share, in three separate Closings (as defined
below) as set forth in Paragraph 2 (the “Offering”).
2. The
Closings shall occur on each Closing Date (as defined below) at the offices of
Xxxxxxxx Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Subject to
the satisfaction (or waiver) of the conditions set forth in Paragraphs 9 and
10:
(a) The
closing (the “First
Closing”) of the purchase and sale of the first 5,000,000 Shares (the
“First Shares”) shall
occur on the earlier of (i) the tenth Business Day following the Investor’s
initial approval of the Company’s three-year operating budget (as initially
approved by the Investor, together with any amendment from time to time by
mutual agreement of the Company and the Investor, the “Budget”) with respect to the
Company’s permitting and associated activities relating to the development of
the Company’s NorthMet mine and Erie Plant facilities in St. Louis County,
Minnesota (together with all related property and assets, the “Project”), and (ii) January
17, 2011 (the “First Closing
Date”).
(b) The
closing (the “Second
Closing”) of the purchase and sale of the second 5,000,000 Shares (the
“Second Shares”) shall
occur on the earlier of (i) the date of the Company’s funding requirement as set
forth in the Budget, and (ii) October 17, 2011 (the “Second Closing
Date”).
(c) The
closing (the “Third
Closing”, and collectively with the First Closing and the Second Closing,
the “Closings”) of the
purchase and sale of the third 5,000,000 Shares (the “Third Shares”) shall occur on
the earlier of (i) the date of the Company’s funding requirement as set forth in
the Budget, (ii) the tenth Business Day following receipt by the Company of key
permits, in forms reasonably acceptable to the Investor, that enable the Company
to begin construction of the Project, and (iii) October 15, 2012 (the “Third Closing Date”, and
collectively with the First Closing Date and the Second Closing Date, the “Closing
Dates”). “Business Day” means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.
Notwithstanding
any other provision of this Subscription Agreement, the Investor may, in its
sole discretion, cause any one or more of the Closings to occur prior to the
applicable Closing Date in respect of such Closing or Closings, by providing 10
days prior written notice to the Company, which notice shall specify the date
upon which such Closing or Closings shall occur.
3. The
Company shall promptly upon receipt of this executed subscription agreement
issue a press release and file a Report of Foreign Private Issuer on Form 6-K,
together disclosing all material aspects of the transactions contemplated
hereby. The Company shall not identify the Investor by name in any press release
or public filing, or otherwise publicly disclose the Investor’s name, without
the Investor’s prior written consent, unless required by applicable laws, rules
and regulations.
4. The
Investor represents and warrants to the Company, as of the date hereof and as of
each Closing Date, as set forth below, and acknowledges that the Company is
relying upon these representations and warrants in connection with the entering
into of this Subscription Agreement:
(a) The
Investor has all necessary approvals of its directors, partners, shareholders or
trustees and all requisite power and authority to execute and deliver the
Agreement, to perform all of its obligations hereunder, and to undertake all
actions required of the Investor hereunder.
(b) The
Investor is duly incorporated and validly subsisting under the laws of its
jurisdiction of incorporation.
(c) This
Subscription Agreement has been duly and validly authorized, executed and
delivered by, and constitutes a legal, valid, binding and enforceable obligation
of the Investor, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or (ii) equitable principles relating to the
availability of specific performance, injunctive relief and other equitable
remedies.
. (d) The
execution, delivery and performance by the Investor of this Subscription
Agreement and the completion of the transactions contemplated hereby do not and
will not result in a breach of or default under any of the Investor’s constating
documents, by-laws or resolutions or any agreement to which the Investor is a
party or by which it is bound
(e) The
Investor is resident in the jurisdiction specified under the heading “Address”
on the Investor Signature Page below. The Investor understands there are risks
associated with an investment in the Shares, the common share purchase warrant
to be issued pursuant to the Amendment and Waiver (the “New Warrant”) and the
underlying Common Shares (collectively, the “Securities”) and that no
securities commission, stock exchange, governmental agency, regulatory body or
similar authority has made any finding or determination or expressed any opinion
with respect to the merits of investing in the Securities and there is no
government or other insurance covering the Securities. The Investor confirms
that it has been advised to consult its own legal and financial advisors with
respect to the suitability of the Securities as an investment for the Investor
and, except as otherwise provided herein, has not relied upon any statements
made by or purporting to have been made on behalf of the Company in deciding to
subscribe for Securities; it has been independently advised by its own legal
counsel as to the full particulars of restrictions with respect to trading in
the Shares and the Common Shares issuable upon exercise of the New Warrant
imposed by applicable securities laws, it confirms that no representation
(written or oral) has been made to it by or on behalf of the Company with
respect thereto, it acknowledges that it is aware of the fact that it may not be
able to resell the Shares or the Common Shares issuable upon exercise of the New
Warrant except in accordance with limited exemptions under applicable securities
laws until expiry of the applicable “hold period” or “restricted period” and in
compliance with the other requirements of applicable securities laws and that it
is solely responsible for compliance with such resale restrictions, and it
agrees that any certificate representing the Shares and the Common Shares
issuable upon exercise of the New Warrant will bear a legend substantially
similar to the following:
THE
SECURITIES REPRESENTED HEREBY [AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF]
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE ISSUER THAT SUCH SECURITIES MAY BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED ONLY PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR: (A) TO THE ISSUER, (B) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN
COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) INSIDE THE UNITED
STATES IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
SECURITIES ACT OR ANY APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES LAWS,
AFTER PROVIDING AN OPINION OF COUNSEL OF RECOGNIZED STANDING REASONABLY
SATISFACTORY TO THE ISSUER TO THAT EFFECT. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS OF
STOCK EXCHANGES IN CANADA.
NEITHER
THE SECURITIES REPRESENTED HEREBY [NOR THE COMMON SHARES TO BE ISSUED UPON THEIR
EXERCISE] HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THESE SECURITIES MAY NOT BE EXERCISED IN THE
UNITED STATES BY OR ON BEHALF OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER
THE U.S. SECURITIES ACT) OR A PERSON IN THE UNITED STATES UNLESS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OR UNLESS AN
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE, AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE ISSUER TO THAT
EFFECT.
UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THIS SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY [AFTER THE
DISTRIBUTION DATE].
The
Investor acknowledges that it and/or the Company may be required to provide
applicable securities regulatory authorities with certain information relating
to the issuance of the Securities and the Investor agrees that it will provide
to the Company, on request, such information as may be reasonably required by
the Corporation in order to comply with the foregoing.
(f) The
Investor is: (i) purchasing the Shares as principal for an acquisition cost
of not less than $150,000 paid in cash at the time of the trade and was not
created or used solely to purchase or hold the Securities in reliance on the
dealer registration and prospectus exemptions set forth in Sections 2.10 and
3.10 of National Instrument 45-106 - Prospectus and Registration
Exemptions (“NI
45-106”); or (ii) an “accredited investor” as defined in NI 45-106
and is purchasing the Shares, or deemed by NI 45-106 to be purchasing the
Shares, as principal and it was not created solely to purchase or hold the
Securities nor is it a trust company or trust corporation registered under the
laws of Xxxxxx Xxxxxx Island that is not registered or authorized under the
Trust and Loan Companies Act (Canada) or under comparable legislation in another
jurisdiction.
(g) The
Investor: (i) has such knowledge in financial and business affairs as to be
capable of evaluating the merits and risks of its investment in the Securities
and has so evaluated the merits and risks of such investment; (ii) is capable of
assessing the proposed investment in the Securities as a result of the
Investor’s own experience or as a result of advice received from a person
registered under applicable securities legislation; (iii) is aware of the
characteristics of the Securities and the risks relating to an investment
therein; and (iv) is able to bear the economic risk of loss of its investment in
the Securities.
(h) The
Investor confirms that neither of the Company, nor any of its directors,
employees, officers, affiliates, or agents have made any representations
(written or oral) to the Investor regarding the future value of the
Securities.
(i) The
Investor is acquiring the Securities for its own account, or an account over
which it has investment discretion, and not with a view towards, or for resale
in connection with, the public sale or distribution thereof. The
Investor does not presently have any agreement or understanding, directly or
indirectly, with any person to distribute any of the Securities. The
Investor is not a broker-dealer registered with the United States Securities and
Exchange Commission (the “SEC”) under the United States
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(j) At
the time the Investor was offered the Securities, it was, at the date hereof it
is, and on each Closing Date and on each date on which it exercises the New
Warrants it will be, either (i) an “accredited investor” as defined in Rule
501(a) under the United States Securities Act of 1933, as amended (the “Securities Act”) or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.
(k) The
Investor and its advisors and representatives have done such due diligence and
other investigation of the Company as the Investor has determined, after
consultation with its advisors and representatives, is appropriate in the
circumstances. The Investor and its advisors and representatives have
been furnished with all documents, information and due diligence materials that
have been requested by the Investor and/or its advisors and
representatives. The Investor and its advisors and representatives
have been afforded the opportunity to ask questions of representatives of the
Company. Neither such inquiries nor any other due diligence
investigations conducted by the Investor or its advisors or representatives
shall modify, amend or affect the Investor’s right to rely on the Company’s
representations and warranties contained herein.
(l) No
person will have, as a result of the transactions contemplated by this
Subscription Agreement, any valid right, interest or claim against or upon the
Company for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding with a placement agent entered into by or on behalf
of the Investor.
(m) The
Investor is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.
(n) The
Investor understands that the Securities are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and the Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of the Investor to acquire the
Securities.
(o) The
Investor understands that the Securities are “restricted securities” under the
U.S. federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable state laws and regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. The Investor understands that the Securities have not been and,
except as contemplated in the registration rights agreement between the Company
and the Investor dated of even date herewith (the “Registration Rights
Agreement”), are not required to be registered for resale under the
Securities Act or any state securities laws, and may be offered for resale,
assigned or transferred (each, a “transfer”) pursuant only to
(A) an effective registration statement under the Securities Act, (B) Regulation
S under the Securities Act, or (C) an applicable exemption from registration
under the Securities Act, provided that in connection with the transfer of the
Securities pursuant to (C) above, the Investor shall have delivered to the
Company an opinion of counsel of recognized standing, reasonably satisfactory to
the Company and its counsel, to the effect that such Securities may be
transferred without registration under the Securities Act, including pursuant to
Section 4(1) under the Securities Act or Rule 144 promulgated under the
Securities Act (or a successor rule thereto) (collectively, “Rule 144”), provided that no
such opinion shall be required in the event of any such proposed transfer
pursuant to Rule 144 where there is no current information requirement and
provided further that in connection with any resale pursuant to (B) above the
Investor shall have delivered a declaration in such form as the Company may
prescribe from time to time, and, if required by the registrar and transfer
agent for the Securities, an opinion of counsel of recognized standing
reasonably satisfactory to the Company and its counsel, to the effect that the
proposed resale may be effected without registration under the Securities Act.
The Securities may be pledged in connection with a bona fide margin account or
other loan or financing arrangement secured by the Securities and such pledge of
Common Shares shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Subscription Agreement.
(p) The
Investor understands that the offer, sale and issuance of the Securities is
conditional upon such offer, sale and issuance (and, if applicable, the issuance
of the Common Shares issuable upon exercise of the New Warrant) being exempt
from the requirements to file and obtain a receipt for a prospectus or to
deliver an offering memorandum, and the requirement to be a registered dealer,
or upon the issuance of such orders, consents or approvals as may be required to
enable such sale (or issuance, as the case may be) to be made without complying
with such requirements, and that as a consequence of acquiring the Securities
(including the Common Shares issuable upon exercise of the New Warrant) pursuant
to such exemptions: (i) certain protections, rights and remedies provided by
applicable securities legislation, including statutory rights of rescission or
damages in the event of a misrepresentation will not be available to the
Investor in connection with the purchase and sale of the Securities (as well as
the issuance of the Common Shares issuable upon exercise of the New Warrant);
(ii) securities laws may not provide the Investor with an adequate remedy in the
event that the Investor suffers investment losses in connection with the
Securities subscribed for; (iii) the Investor may not receive information that
would otherwise be required to be given under securities laws; and (iv) the
Company is relieved from certain obligations that would otherwise apply under
applicable securities laws.
(q) Except
as otherwise provided herein, the Investor has relied solely upon publicly
available information relating to the Company and not upon any oral or written
representation as to fact or otherwise made by or on behalf of the Company and
the Investor has not received or been provided with, nor has it requested, nor
does it have any need to receive, any prospectus, offering memorandum or any
other document (other than annual financial statements, interim financial
statements or any other document (excluding offering memoranda, prospectuses or
other offering documents) the content of which is prescribed by statute or
regulation and which has been publicly filed on the System for Electronic Data,
Analysis and Retrieval (“SEDAR”)) describing the
business and affairs of the Company, which has been prepared for delivery to and
reviewed by prospective purchasers in order to assist them in making an
investment decision in respect of securities of the Company.
(r) As
of the date hereof and upon consummation of the transactions contemplated under
the Amendment and Waiver (as defined below), the Investor is the direct or
indirect beneficial owner, or exercises control or direction over, the
securities of the Company set out on the Investor Signature Page
hereto.
(s) Neither
the Investor nor any person acting on behalf of, or pursuant to any
understanding with or based upon any information received from, the Investor
has, directly or indirectly, as of the date of this Subscription Agreement,
engaged in any transactions in the securities of the Company or has violated its
obligations of confidentiality with respect to the Offering since the time that
the Investor was first contacted by the Company or its agents with respect to
the transactions contemplated hereby. The Investor covenants that
neither it, nor any person acting on behalf of, or pursuant to any understanding
with or based upon any information received from, the Investor will engage in
any transactions in the securities of the Company prior to the time that the
transactions contemplated by this Subscription Agreement are publicly
disclosed. Notwithstanding the foregoing, in the case of an Investor
and/or its affiliates that is, individually or collectively, a multi-managed
investment bank or vehicle whereby separate portfolio managers manage separate
portions of such Investor’s or affiliates assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Investor’s or affiliates assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio managers that have knowledge about the financing
transaction contemplated by this Subscription Agreement.
(t) The Investor has sufficient
funds to pay the aggregate subscription price in accordance with the terms of
this Subscription Agreement.
5. The
Company represents and warrants to the Investor, as of the date hereof and as of
each Closing Date, as set forth below, and acknowledges that the
Investor is relying upon these representations and warrants in
connection with the entering into of this Subscription Agreement:
(a) The
Company has all necessary approvals of its directors and shareholders and all
requisite power and authority to execute and deliver the Agreement, to perform
all of its obligations hereunder, and to undertake all actions required of the
Company hereunder.
(b) The
Company is duly incorporated and validly existing under the laws of the
jurisdiction of its incorporation.
(c) This
Subscription Agreement has been duly and validly authorized, executed and
delivered by, and constitutes a legal, valid, binding and enforceable obligation
of the Company, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or (ii) equitable principles relating to the
availability of specific performance, injunctive relief and other equitable
remedies
(d) The
execution, delivery and performance by the Company of this Subscription
Agreement and the completion of the transactions contemplated hereby do not and
will not result in a violation of any law, regulation, order or ruling,
including securities laws, applicable to the Company, and do not and will not
constitute a breach of or default under any of the Company’s constating
documents, by-laws or resolutions or any agreement to which the Company is a
party or by which it is bound.
(e) The
SEDAR database contains in a publicly available format, complete and correct
copies of all reports, schedules, forms, statements and other documents filed
with or furnished to the Canadian Securities Administrators (the “CSA”) by the Company since
January 1, 2008 (together with all exhibits and schedules thereto and documents
and other information incorporated therein by reference, the “CSA Documents”). The Company
has filed with or furnished to the CSA each report, schedule, form, statement or
other document or filing required by law to be filed or furnished since January
1, 2008, and none of the CSA Documents at the time it was filed or furnished
contained any untrue statement of a material fact or omission to state a
material fact that is required to be stated or that is necessary to make a
statement not misleading in light of the circumstances in which it was made.
Except to the extent that information contained in any CSA Document filed or
furnished and publicly available (a “Filed CSA Document”) has been
revised or superseded by a later filed or furnished Filed CSA Document, none of
the CSA Documents contains any untrue statement of a material fact or omission
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in light of the circumstances in which it was
made. The comparative financial statements (including the related
notes) of the Company included in the CSA Documents complied, at the time the
respective statements were filed, as to form in all material respects with the
applicable accounting requirements and the rules of the CSA with respect
thereto, have been prepared in accordance with generally accepted accounting
principles in effect from time to time in Canada (“GAAP”) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject, in the case of unaudited quarterly financial
statements, to normal and recurring year-end audit adjustments and provided that
such unaudited interim financial statements may omit notes that are not required
in the unaudited financial statements).
(f) The
Company has filed all periodic reports (including exhibits and all other
information incorporated by reference) required to be filed by it with the SEC
(“SEC”) since January 1,
2008 (such reports, as respectively amended since the time of their respective
filings, “Company SEC
Reports”). The Company SEC Reports: (a) were prepared in accordance with,
and complied in all material respects with, the requirements of the Exchange Act
and the rules and regulations promulgated thereunder applicable to such Company
SEC Reports, and (b) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except in
the case of each of the preceding clauses (a) and (b) to the extent corrected on
or prior to the date of this Subscription Agreement, by the filing of the
applicable amending or superseding Company SEC Reports. None of the Company SEC
Reports is the subject of outstanding SEC comments or, to Company’s knowledge,
ongoing SEC review.
(g) No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with any person or entity is required to be obtained or
made by the Company in connection with its execution, delivery or performance of
this Subscription Agreement, except for such filings and notifications as may be
required to be made by the Company with the CSA, the SEC or pursuant to state or
local securities laws or the rules and regulations of the Toronto Stock Exchange
(the “TSX”) and the New
York Stock Exchange Amex (the “NYSE
Amex”). Assuming the accuracy of each of the representations
and warranties set forth in Paragraph 4, the issue of the Securities is exempt
from the prospectus and registration requirements of Canadian securities laws
and from registration under the Securities Act and any applicable U.S. state
securities or “Blue Sky” laws and, if effected in the manner contemplated under
this Subscription Agreement, such issuance will be in accordance with the rules
of the TSX and the NYSE Amex.
(h) Upon
the applicable Closing, the Shares will be duly authorized and validly issued
and outstanding Common Shares
registered in the name of the Investor (or as it may direct in writing) and upon
receipt of the purchase price by the Company, the Shares will be fully paid and
non-assessable and shall be free and clear of any liens.
(i) The
issuance of the Securities by the Company under this Subscription Agreement does
not contravene, conflict with or result in a violation of the Company’s
constating documents, by-laws or the terms of any agreement or instrument to
which the Company is a party or by which it is bound.
(j) Neither
the Company, nor any of its subsidiaries or its affiliates, nor any person
acting on its or their behalf, has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D under the Securities
Act) in connection with the offer or sale of the Securities. The
Company has not engaged any placement agent or other agent in connection with
the sale of the Securities.
(k) None
of the Company, its subsidiaries, any of its affiliates, and any
person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would require registration of the issuance of any of the
Securities under the Securities Act, whether through integration with prior
offerings or otherwise, or cause this offering of the Securities to require
approval of shareholders of the Company for purposes of any applicable
shareholder approval provisions, including, without limitation, under the rules
and regulations of any exchange or automated quotation system on which any of
the securities of the Company are listed or designated. None of the
Company, its subsidiaries, their affiliates and any person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of the issuance of any of the Securities under the
Securities Act or cause the offering of the Securities to be integrated with
other offerings for purposes of any such applicable stockholder approval
provisions.
(l) The
Company is not and, after giving effect to the offering and sale of the Shares
as described in this Subscription Agreement and the application of the proceeds
thereof, will not be an “investment company” as defined in the United States
Investment Company Act of 1940.
6. This
Subscription Agreement will involve no obligation or commitment of any kind
until this Subscription Agreement is accepted and countersigned by or on behalf
of the Company. The Investor acknowledges and agrees that the
Investor’s receipt of the Company’s counterpart to this Subscription Agreement
shall constitute written confirmation of the Company’s offering and sale of
Shares to such Investor.
7. All
covenants, agreements, representations and warranties herein will survive the
execution of this Subscription Agreement, the delivery of the Shares being
purchased and the payment therefor. Any investigation by or knowledge
of the Investor and its advisors shall not mitigate, diminish or affect the
representations and warranties of the Company pursuant to this Subscription
Agreement.
8. (a) On
or prior to the First Closing, the Company shall deliver or cause to be
delivered to the Investor the following:
(i) this
Subscription Agreement, the Registration Rights Agreement, the Amendment and
Waiver Agreement among the Company, the Investor and PolyMet Mining Inc., dated
of even date herewith (the “Amendment and Waiver”), and
the Common Share Purchase Warrant to purchase 3,000,000 Common Shares at $2.00
per share, in each case, duly executed by the Company; and
(ii) the
share certificate evidencing the First Shares.
(b) On
or prior to the Second Closing, the Company shall deliver or cause to be
delivered to the Investor the share certificate evidencing the Second
Shares.
(c) On
or prior to the Third Closing, the Company shall deliver or cause to be
delivered to the Investor the share certificate evidencing the Third
Shares.
9. The
obligation of the Investor hereunder to purchase the First Shares, Second Shares
and Third Shares at the applicable Closing is subject to the satisfaction, at or
before the applicable Closing, of each of the following conditions, provided
that these conditions are for the Investor’s sole benefit and may be waived by
the Investor at any time in its sole discretion by providing the Company with
prior written notice thereof:
(a) The
Company shall have delivered to the Investor the applicable deliverables set
forth in Paragraph 8.
(b) The
Investor shall have received the opinions of Farris, Vaughan, Xxxxx & Xxxxxx
LLP and Xxxxxxxx Xxxxxxx LLP (or other counsel reasonably satisfactory to the
Investor) dated as of the applicable Closing Date covering the matters set forth
on Exhibit A
and Exhibit B
hereto.
(c) The
representations and warranties of the Company shall be true and correct in all
respects as of the date when made and as of the applicable Closing Date as
though made at that time, and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Subscription Agreement to be performed, satisfied or complied
with by the Company prior to the applicable Closing Date and the Investor shall
have received a certificate signed on behalf of the Company by the chief
financial officer and chief executive officer to such effect and certifying the
matters referred to in Paragraphs 9(e) through (h) inclusive.
(d) Receipt
by the Investor from the Company of a copy of resolutions adopted by its Board
of Directors approving the execution of this Subscription Agreement and the
consummation of the transactions contemplated herein, certified to be true,
accurate and complete, in full force and effect as of the applicable Closing
Date.
(e) The
Company shall have obtained all governmental or regulatory consents and
approvals, if any, necessary for the sale of the First Shares, Second Shares and
Third Shares, as the case may be, including customary TSX and NYSE Amex share
listing approval with respect to the Shares.
(f) There
shall be no actions, suits or proceedings to prohibit, condition or materially
limit the ownership or full rights of ownership of any of the Shares and no
order, ruling or determination having the effect of suspending the issuance or
ceasing the trading of any of the Shares having been issued or made by any stock
exchange, securities commission, court or other regulatory authority and be
continuing in effect.
(g) The
Company shall not have (i) become insolvent, (ii) dissolved, (iii) ceased to do
business, (iv) filed for bankruptcy, (v) have filed against it a petition in
bankruptcy or (vi) taken, or failed to oppose, any action in furtherance the
foregoing.
(h) Only
with respect to the First Closing, the Budget shall have been mutually agreed by
the Company and the Investor and a copy thereof delivered to the
Investor.
10. The
obligation of the Company hereunder to issue and sell the First Shares, Second
Shares and Third Shares to the Investor at the applicable Closing is subject to
the satisfaction, at or before the applicable Closing Date, of each of the
following conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion by
providing the Investor with prior written notice thereof:
(a) Only
with respect to the First Closing, the Investor shall have duly executed and
delivered to the Company this Subscription Agreement, the Registration Rights
Agreement and the Amendment and Waiver.
(b) The
Investor shall have delivered to the Company the purchase price for the First
Shares, Second Shares and Third Shares, as the case may be, being purchased by
the Investor at the applicable Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.
(c) The
representations and warranties of the Investor shall be true and correct in all
material respects as of the date when made and as of the applicable Closing Date
as though made at that time, and the Investor shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Subscription Agreement to be performed, satisfied or
complied with by the Investor prior to the applicable Closing Date and the
Company shall have received a certificate signed on behalf of the Investor by
two senior officers of the Investor to such effect.
(d) The
offering, sale and issuance of the First Shares, Second Shares or Third Shares,
as the case may be, by the Company shall not be prohibited by any law or
governmental order or regulation.
11. The
Investor will have a right of first refusal, on the terms and conditions set
forth in this Paragraph 11, to provide all material financings of the Company
not covered under Paragraph 12 hereof, that occur at any time when the Investor
and any of its affiliates are the beneficial owners of 10% or more of the issued
and outstanding Common Shares of the Company (determined in accordance with Rule
13d-3 of the Securities Act). For any such financing during such period,
the Company shall give at least five Business Days advance written notice to the
Investor prior to such financing by providing to the Investor a term sheet
which contains all significant terms and conditions of such proposed
financing. If the Investor elects to exercise its right of first
refusal for a particular financing, it shall deliver written notice to the
Company within five Business Days following receipt from the Company of the
notice that states that the Investor has elected to exercise the right of first
refusal granted to it in this Subscription Agreement and to provide the
financing to the Company upon the same terms and conditions as set forth in term
sheet provided to the Investor. If, subsequent to the Company giving
notice to the Investor hereunder, the terms and conditions of the proposed
financing are changed from those disclosed in the term sheet provided to the
Investor, the Company shall be required to provide a new notice and term sheet
meeting the requirements of this Paragraph 11, reflecting such revised terms, to
the Investor hereunder and the Investor shall have the right, which must be
exercised within two Business Days of the date the Investor receives such new
notice and such revised term sheet, to exercise its right of first refusal on
such changed terms and conditions and otherwise as provided
hereunder. If the Investor does not exercise its right of first
refusal with respect to a proposed financing within the period or periods
provided, or affirmatively declines to engage in such proposed financing with
the Company, then the Company may proceed with such proposed financing on the
same terms and conditions as noticed to the Investor. Notwithstanding
anything herein to the contrary, failure of the Investor to affirmatively elect
in writing exercise its right of first refusal in any proposed financing within
the required time frames shall be deemed to be the equivalent of the Investor’s
decision not exercise its right of first refusal.
12. The
Investor will have a right to participate, on the terms and conditions set forth
in this Paragraph 12, in all sales by the Company of its equity securities or
any securities convertible into or exchangeable or exercisable for such
securities in a capital raising transaction, that occur at any time when the
Investor or any of its affiliates are the beneficial owner of 5% or more of the
issued and outstanding Common Shares of the Company (determined in accordance
with Rule 13d-3 of the Securities Act), other than (i) any such sale that is a
public offering underwritten on a firm commitment basis and registered with the
Commission under the Securities Act with proceeds to the Company of at least
US$5.0 million, (ii) an Exempt Issuance, and (iii) subject to Paragraph 13, a
bought deal financing in Canada. For any such transaction during such
period, the Company shall give at least ten Business Days advance written notice
to the Investor prior to any offer or sale of any of the Company’s securities in
such transaction by providing to the Investor a term sheet which contains
all significant business terms of such proposed transaction. The
Investor shall have the right to participate in such proposed transaction and to
purchase its Pro Rata Share of such securities which
are the subject of such proposed transaction for the same consideration and on
the same terms and conditions as contemplated for sales to third parties in such
transaction (or such lesser portion thereof as specified by the
Investor). If the Investor elects to exercise its rights hereunder
for a particular transaction, it shall deliver written notice to the Company
within ten Business Days following receipt from the Company of the notice that
states that the Investor has elected to exercise the right granted to it in this
Paragraph 12 and to participate in the capital raising transaction upon the same
terms and conditions as set forth in term sheet provided to the
Investor. If, subsequent to the Company giving notice to the Investor
hereunder, the terms and conditions of the proposed sale to third parties in
such transaction are changed from those disclosed in the term sheet provided to
the Investor, the Company shall be required to provide a new notice and term
sheet meeting the requirements of this Paragraph 12, reflecting such revised
terms, to the Investor hereunder and the Investor shall have the right, which
must be exercised within ten Business Days of the date the Investor receives
such new notice and such revised term sheet, to exercise its rights to purchase
the securities on such changed terms and conditions and otherwise as provided
hereunder. If the Investor does not exercise its rights hereunder
with respect to a proposed transaction within the period or periods provided, or
affirmatively declines to engage in such proposed transaction with the Company,
then the Company may proceed with such proposed transaction on the same terms
and conditions as noticed to the Investor. Notwithstanding anything
herein to the contrary, failure of the Investor to affirmatively elect in
writing to participate in any proposed transaction within the required time
frames shall be deemed to be the equivalent of the Investor’s decision not to
participate in such proposed transaction. “Exempt Issuance” means the
issuance of (a) Common Shares or options to employees, officers, directors or
consultants of the Company pursuant to (i) any existing stock or option plan, or
(ii) any share or option plan duly adopted by a majority of the non-employee
members of the Board of Directors of the Company or a majority of the members of
a committee of non-employee directors established for such purpose, (b) options
issued to new employees, and (c) securities upon the exercise or exchange of or
conversion of any securities exercisable or exchangeable for or convertible into
Common Shares issued and outstanding on the date of this Subscription
Agreement. “Pro Rata
Share” means with respect to each capital raising transaction an amount
equal to the product obtained by multiplying (a) an amount equal to the
securities being issued in such capital raising transaction times (b) a fraction
of which the numerator is the number of shares of all Common Stock beneficially
owned by the Investor at the time the Pro Rata Share is being determined
(including shares of Common Stock issuable upon conversion of shares of warrants
and debentures), and the denominator is all of the outstanding Common Shares
(including shares of Common Stock issuable upon conversion or exercise of
warrants, debentures, options and other securities that are exercisable,
convertible or exchangeable into Common Shares that are outstanding at that
time).
13. Notwithstanding
Paragraph 12, if the Company proposes to sell its equity securities or
securities convertible into or exchangeable or exercisable for such securities
in a bought deal financing in Canada, then the Company shall give at least five
Business Days advance written notice to the Investor prior to the expected
launch date of the bought deal financing and the expected terms and conditions
of said financing. Within ten Business Days following the closing of the bought
deal transaction, the Investor shall have the right to purchase, on the same
terms and conditions, its Pro Rata Share of such securities sold in the bought
deal financing that the Investor would have been entitled to purchase if
Paragraph 12 had applied. The Investor must provide written notice to
the Company of its election to exercise its right granted to it in this
Paragraph 13 within five Business Days following the launch of the bought deal
transaction. Notwithstanding anything herein to the contrary, failure of the
Investor to affirmatively elect in writing to exercise its rights pursuant to
this Paragraph 13 within the required time frames shall be deemed to be the
equivalent of the Investor’s decision not to exercise its rights under this
Paragraph 13.
14. The
Company and the Investor acknowledge that simultaneously with the execution of
this Subscription Agreement, they will each execute and deliver an Amendment and
Waiver, pursuant to which, among other things, the Company and the Investor will
(a) amend certain provisions of (i) the Purchase Agreement, dated as of October
31, 2008, as amended (the “Purchase Agreement”), (ii) the
Company’s outstanding Floating Rate Secured Debentures held by the Investor and
issued pursuant to the Purchase Agreement, and (iii) the warrant to purchase
Common Shares in an amount equal to the principal amount of the Floating Rate
Secured Debentures held by the Investor and issued pursuant to the Purchase
Agreement; (b) cancel the warrant to purchase up to 6,250,000 Common Shares that
is held by the Investor and was issued pursuant to the Purchase Agreement; and
(c) terminate the Investor’s commitment to purchase any further Floating Rate
Secured Debentures under the Purchase Agreement.
15. All
notices, requests, consents and other communications hereunder shall be in
writing, shall be mailed (A) if within the United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile, or (B) if delivered from outside the
United States, by International Federal Express or facsimile, and shall be
deemed given (i) if delivered by first-class registered or certified domestic
mail, three business days after so mailed, (ii) if delivered by a nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed,
or (iv) if delivered by facsimile, upon electronic confirmation of receipt and
shall be delivered as addressed as follows:
|
If
to the Company, to:
|
|
000
- 0000 Xxxxxxxx Xxxx
Xxxxxxxx,
XX X0X 0X0
XXXXXX
Attention:
Xxxxxxx X. Xxxxx, Chief Financial Officer
Facsimile:
(000) 000-0000
|
|
with
a copy to:
|
|
Xxxxxxxx
Xxxxxxx LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxx X. Xxxxxxx, Esq.
Facsimile:
(000)000-0000
|
If
to the Investor, at its address on the signature page hereto, or at such other
address or addresses as may have been furnished to the Company in
writing.
16. The
Company acknowledges that the only material, non-public information relating to
the Company or its subsidiaries that the Company, its employees or agents has
provided to the Investor in connection with the Offering prior to the date
hereof is the existence of the Offering.
17. This
Subscription Agreement may be terminated by the Investor or the Company, by
notice to the other party, if any of the conditions set forth in Paragraphs 9
and 10, as the case may be, have not be satisfied or waived at or before the
applicable Closing; provided, however, that no such termination will affect the
right of any party to xxx for any breach by the other party.
18. This
Subscription Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor. This
Subscription Agreement will be governed by the internal laws of the State of New
York, without regard to principles of conflicts of laws (other than Section
5-1401 of the New York General Obligations Law). This Subscription Agreement may
be executed in one or more counterparts, each of which will constitute an
original, but all of which, when taken together, will constitute but one
instrument, and signatures may be delivered by facsimile or by e-mail delivery
of a “.pdf” format data file.
[signature
page follows]
INVESTOR
SIGNATURE PAGE
|
Number
of First Shares
|
5,000,000 | |||
|
Number
of Second Shares
|
5,000,000 | |||
|
Number
of Third Shares
|
5,000,000 | |||
|
Purchase
Price Per Share:
|
$ | 2.00 | ||
|
Aggregate
Purchase Price:
|
$ | 30,000,000 |
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.
Dated as
of: November 12th,
2010
|
GLENCORE
AG
|
INVESTOR
By: /s/
Xxxxxx Xxxxx
Print Name: Xxxxxx Xxxxx
Title: Officer
By:
/s/ Xxxxxxx Xxxxxx
Print Name: Xxxxxxx Xxxxxx
Title: Officer
Taxpayer
Idientification Number:
Address:
SECURITIES
OF THE COMPANY BENEFICIALLY OWNED OR CONTROLLED BY THE INVESTOR:
The
Investor holds Floating Rate Secured Debentures due September 30, 2012 of Poly
Met Mining, Inc., the Company’s wholly-owned subsidiary (the “Subsidiary”), in the aggregate
principal amount of $25,000,000, plus capitalized interest of $2,200,000 (the
“Outstanding Debentures”).
The
Investor holds a warrant, exercisable from time to time, to purchase the
Company’s common shares in an amount equal to the principal amount of the
Outstanding Debentures divided by $4.00.
The
Investor holds a warrant, exercisable from time to time, to purchase the
Company’s common shares in an amount equal to the principal amount of the
Tranche E Debenture divided by $2.65.
The
Investor holds a warrant, exercisable from time to time, to purchase up to
3,000,000 Common Shares at $2.00 per Common Share.
The
Investor owns directly 9,433,962 common shares of the Company.
SUBSCRIPTION
AGREEMENT
Agreed
and Accepted November 12th, 2010
By:
/s/ Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Chief Financial Officer
