POLYMET MINING CORP. SUBSCRIPTION AGREEMENT FOR UNITS (Canadian and Offshore Subscribers)
SUBSCRIPTION
AGREEMENT FOR UNITS
(Canadian
and Offshore Subscribers)
| TO: |
| AND TO: |
RESEARCH
CAPITAL CORPORATION
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The
undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to
purchase from Polymet Mining Corp. (the "Corporation")
that
number of units of the Corporation (the "Units") set out below at a price of
$0.90 per Unit. Each Unit consists of one common share in the capital of the
Corporation (a "Common Share") and one-half of one Common Share purchase warrant
(each whole Common Share purchase warrant, a "Warrant"). Each Warrant will
entitle the holder thereof to purchase one Common Share (a "Warrant Share")
at a
price of $1.25 (the "Exercise Price") for a period of thirty
(30) months following the Closing Date (as hereinafter defined); provided that,
if at any time the closing trading price of the Common Shares for any
20
consecutive trading days exceeds $2.50, the Corporation may accelerate the
expiry date of the Warrants by giving notice to the holders thereof and in
such
case the Warrants will expire on the 30th
calendar
day after the date on which such notice is deemed to have been received by
such
holders. The Subscriber agrees to be bound by the terms and conditions set
forth
in the attached "Terms and Conditions of Subscription for Units" including
without limitation the representations, warranties and covenants set forth
in
the applicable schedules attached thereto. The Subscriber further agrees,
without limitation, that the Corporation and the Agent (as hereinafter defined)
may rely upon the Subscriber's representations, warranties and covenants
contained in such documents.
SUBSCRIPTION
AND SUBSCRIBER INFORMATION
Please
print all information (other than Signatures), as applicable, in the space
provided below
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Name
of Subscriber
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Number
of Units: ___________________________X $0.90
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Account
Reference (if applicable):
____________________________________
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Aggregate
Subscription Price: ___________________________________
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By:
____________________________________________________________
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(the
“Subscription
Price”)
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Authorized
Signature
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(Official
Capacity or Title - if the Subscriber is not an
individual)
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If
the Subscriber is signing as agent for a principal (beneficial
purchaser)
and is not purchasing as a trustee or agent for account fully
managed by
it, complete the following:
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(Name
of individual whose signature appears above if different than
the name of
the Subscriber printed above.)
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(Name
of Principal)
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(Subscriber’s
Address, including Municipality and Province)
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(Principal’s
Address)
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(Telephone
Number)
(Email
Address)
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Account
Registration:
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Delivery
Instructions as set forth below:
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(Name)
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(Name)
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(Account
Reference, if applicable)
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(Account
Reference, if applicable)
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(Address)
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(Address,
including Postal Code)
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(Contact
Name)
(Telephone
Number)
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Number and kind of securities of the Corporation
held,
directly or indirectly, if any:
______________________________________________
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1.
State whether the Subscriber is an Insider (as such term is hereinafter
defined) of the Corporation:
Yes o No
o
2. State
whether the Subscriber is a member of the Pro
Group (as such term is hereinafter defined):
Yes
o No
o
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TERMS
AND CONDITIONS OF SUBSCRIPTION FOR
UNITS
ARTICLE
1-
INTERPRETATION
1.1 Definitions
Whenever
used in this Subscription Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following words and phrases shall
have the respective meanings ascribed to them as follows:
"Agency
Agreement" means
the
agency agreement to be entered into between the Agent and the
Corporation in respect of the Offering.
"Agent"
means
Research Capital Corporation.
"Business
Day" means
a
day other than a Saturday, Sunday or any other day on which the principal
chartered banks located in Toronto are not open for business.
"Closing"
shall
have the meaning ascribed to such term in Section 4.1.
"Closing
Date" shall
have the meaning ascribed to such term in Section 4.1.
"Closing
Time" shall
have the meaning ascribed to such term in Section 4.1.
"Common
Shares" shall
have the meaning ascribed to such terns on the face page of this Subscription
Agreement.
"Compensation
Options" shall
have the meaning ascribed to such teen in Section 8.1.
"Control
Person" means
a
person, company or combination of persons or companies described in clause
(c)
of the definition of "distribution" in subsection 1(1) of the Securities
Act
(Ontario).
"Corporation"
means
Polymet Mining Corp. and includes any successor corporation to or of the
Corporation.
"Exercise
Price"
shall
have the meaning ascribed to such term on the face page of this Subscription
Agreement.
"Insider" means
(a)
a director or senior officer of the Corporation, (b) a director or senior
officer of a company that is an insider or subsidiary of the Corporation, or
(c)
any person who beneficially owns, directly or indirectly, voting securities
of
the Corporation or who exercises control or direction over voting securities
of
the Corporation or a combination of both carrying more than 10% of the voting
rights attached to all voting securities of the Corporation for the time being
outstanding.
"Offering"
means
the offering of Units through the Agent pursuant to the Agency
Agreement.
"person"
means
any
individual (whether acting as an executor, trustee administrator, legal
representative or otherwise), corporation, firm, partnership, sole
proprietorship, syndicate, joint venture, trustee, trust, unincorporated
organization or association, and pronouns have a similar extended
meaning.
"Pro
Group" means
a
member (brokerage firm) of the TSXV, an employee, partner, officer, director
or
an `affiliate' (a company controlling or under common control) of a member
or an
`associate' (a company of which more than 10% of the voting shares are owned
or
controlled by such person, a partner of such person, a trust or estate of which
a substantial beneficial interest is owned or of which such person is a trustee,
a spouse or child of such person, or a relative of such person or their spouse
living in the same home as such person) of any of the foregoing.
"Securities"
means,
collectively, the Units, the Common Shares, the Warrants and the Warrant
Shares.
"Securities
Laws"
means, as applicable, the securities laws, regulations, rules, rulings and
orders in each of the provinces of Alberta, British Columbia and Ontario and
the
applicable policy statements issued by the securities regulators in each of
the
provinces of Alberta, British Columbia and Ontario, and the rules of the
TSXV.
"Subscriber" means
the
subscriber for the Units as set out on the face page of this Subscription
Agreement.
"Subscription
Agreement" means
this subscription agreement (including any schedules hereto)
and any
instrument amending this Subscription Agreement; "hereof',
"hereto", "hereunder", "herein" and
similar expressions mean and refer to this Subscription Agreement and not to
a
particular
Article or Section; and the expression "Article" or "Section" followed by a
number means and refers to the specified Article or Section of this Subscription
Agreement.
"Subscription
Price" shall
have the meaning ascribed to such term on the face page of this Subscription
Agreement.
"Term
Sheet" means
the
term sheet delivered to potential purchasers of Units, a copy of which is
attached hereto as Schedule "E".
"TSXV"
means
the
TSX Venture Exchange.
"TSXV
Approval" means
the
conditional approval of the Offering by the TSXV.
"United
States" means
the
United States of America, its territories and possessions, any State of the
United States and the District of Columbia.
"Units"
shall
have the meaning ascribed to such term on the face page of this Subscription
Agreement.
"U.S.
Purchaser" means
a
person in the United States, a person who receives or received an offer of
the
Securities while in the United States, a person who was in the United States
at
the
2
time
the
Subscriber's buy order was made or a person who executed or delivered this
Subscription Agreement while in the United States.
"U.S.
Securities Act"
means the United States Securities Act of 1933, as amended.
"Warrants"
shall
have the meaning ascribed to such term on the face page of this Subscription
Agreement.
"Warrant
Shares" shall
have the meaning ascribed to such term on the face page of this Subscription
Agreement.
1.2 Gender
and Number
Words
importing the singular number only shall include the plural and vice versa,
words importing the masculine gender shall include the feminine gender and
words
importing persons shall include finis and corporations and vice
versa.
1.3
Currency
Unless
otherwise specified, all dollar amounts in this Subscription Agreement,
including the symbol "$", are expressed in Canadian dollars.
1.4
Subdivisions,
Headings and Table of Contents
The
division of this Subscription Agreement into Articles, Sections, Schedules
and
other subdivisions, the inclusion of headings and the provision of a table
of
contents are for convenience of reference only and shall not affect the
construction or interpretation of this Subscription Agreement. The headings
in
this Subscription Agreement are not intended to be full or precise descriptions
of the text to which they refer. Unless something in the subject matter or
context is inconsistent therewith, references herein to an Article, Section,
Subsection, paragraph, clause or Schedule are to the applicable article,
section, subsection, paragraph, clause or schedule of this Subscription
Agreement.
ARTICLE
2 - SCHEDULES
2.1
Description
of Schedules
The
following are the Schedules attached to and incorporated in this Subscription
Agreement by reference and deemed to be a part hereof:
Schedule
"A" - Certificate of an Accredited Investor - Ontario
Schedule
"B" - Certificate of an Accredited Investor - Alberta and British
Columbia
Schedule
"C" - Certificate of Offshore Purchaser
Schedule
"D" - TSXV Form 4C Corporate Placee Registration Form
Schedule
"E" - Term Sheet
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ARTICLE
3 - SUBSCRIPTION AND DESCRIPTION OF UNITS
3.1
Subscription
for the Units
The
Subscriber hereby confirms its irrevocable subscription for and offer to
purchase the Units from the Corporation, on and subject to the teens and
conditions set out in this Subscription Agreement, for the Subscription Price
which is payable as described in Article 4 hereto.
3.2
Description
of Units
Each
Unit
consists of one Common Share and one-half of one Warrant. Subject to the
anti-dilution provisions contained in the instrument under which the Warrants
will be governed, each whole Warrant shall entitle the holder thereof to acquire
one Warrant Share for a period of thirty (30) months following the Closing
Date
at the Exercise Price; provided that, if at any time the closing trading price
of the Common Shares for any 20 consecutive trading days exceeds $2.50, the
Corporation may accelerate the expiry date of the Warrants by giving notice
to
the holders thereof and in such case the Warrants will expire on the
30th
calendar
day after the date on which such notice is deemed to have been received by
such
holders.
3.3
Acceptance
and Rejection of Subscription by the Corporation
The
Subscriber acknowledges and agrees that the Corporation reserves the right,
in
its absolute discretion, to reject this subscription for Units, in whole or
in
part, at any time prior to the Closing Time. If this subscription is rejected
in
whole, any cheques or other forms of payment
delivered to the-Agent representing the Subscription Price will be promptly
returned to
the
Subscriber without interest or deduction. If this subscription is accepted
only
in part, a cheque representing any refund of the Subscription Price for that
portion of the subscription for the Units which is not accepted, will be
promptly delivered to the Subscriber without interest or deduction.
ARTICLE
4 - CLOSING
4.1
Closing
Delivery
and sale of the Units and payment of the Subscription Price will be completed
(the "Closing")
at
the
offices of Xxxxxxx and Xxxx LLP, at 2:00 p.m. (Toronto time) (the "Closing
Time") on
August
29, 2005 or such other place or date or time as the Corporation and the Agent
may agree (the "Closing
Date"). If,
prior
to the Closing Time, the terms and conditions contained in this Subscription
Agreement and the Agency Agreement have been complied with to the satisfaction
of the Agent, or waived by the Agent, the Agent shall deliver to the Corporation
all completed Subscription Agreements and payment of the aggregate Subscription
Price for all of the Units sold pursuant to the Agency Agreement against
delivery by the Corporation of certificates representing the Common Shares
and
Warrants and such other documentation as may be required pursuant to the
Subscription Agreement and the Agency Agreement.
4
If,
prior
to the Closing Time, the terms and conditions contained in this Subscription
Agreement (other than delivery by the Corporation to the Subscriber of
certificates representing the Common Shares and Warrants) and the Agency
Agreement have not been complied with to the satisfaction of the Agent, or
waived by it, the Agent, the Corporation and the Subscriber will have no further
obligations under this Subscription Agreement.
4.2
Conditions
of Closing
The
Offering is conditional upon, among other things, the Corporation obtaining
TSXV
Approval prior to the Closing Date.
The
Subscriber acknowledges and agrees that the obligations of the Corporation
hereunder
are conditional on the accuracy of the representations and warranties of the
Subscriber
contained in this Subscription Agreement as of the date of this Subscription
Agreement, and as of the Closing Time as if made at and as of the Closing Time,
and the fulfillment of the following additional conditions as soon as possible
and in any event not later than the Closing Time:
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(a)
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unless
other arrangements acceptable to the Agent have been made, payment
by the
Subscriber of the Subscription Price by certified cheque or bank
draft in
Canadian dollars payable to "Research Capital
Corporation";
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(b)
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the
Subscriber having properly completed, signed and delivered this
Subscription Agreement to:
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Research
Capital Corporation
000
Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx-Xxxxxxxx
Centre, Box 265
Toronto,
ON M5K 1J5
Attention:
Vice President, Investment Banking
Fax:
(000) 000-0000
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the
Subscriber having properly completed, signed and delivered one of
either
Schedule "A", "B" or "C" hereto, as applicable;
and
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(d)
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(if
applicable) the Subscriber having completed and provided the TSXV
Form 4C
Corporate Placee Registration Form set out as Schedule "D"
hereto.
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4.3
Authorization
of the Agent
The
Subscriber irrevocably authorizes the Agent in its discretion, to act as the
Subscriber's representative at the Closing, and hereby appoints the Agent,
with
full power of substitution, as its true and lawful attorney with full power
and
authority in the Subscriber's place and stead:
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(a)
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to
receive certificates representing the Common Shares and Warrants,
to
execute in the Subscriber's name and on its behalf all closing receipts
and required documents, to complete and correct any errors or omissions
in
any form or document provided by the Subscriber in connection with
the
subscription for the Units and to exercise any rights of termination
contained in the Agency Agreement;
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(b)
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to
extend such time periods and to waive, in whole or in part, any
representations, warranties, covenants or conditions for the Subscriber's
benefit contained in this Subscription Agreement, and the Agency
Agreement
or any ancillary or related document;
and
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(c)
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to
terminate this Subscription Agreement if any condition precedent
is not
satisfied, in such manner and on such terms and conditions as the
Agent in
its sole discretion may determine.
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ARTICLE
5- REPRESENTATIONS AND
WARRANTIES
OF THE CORPORATION
5.1 By
execution of this Subscription Agreement, the Corporation hereby agrees with
the
Subscriber that the Subscriber shall have the benefit of the representations
and
warranties made by the Corporation to the Agent and set forth in the Agency
Agreement, such representations and warranties shall form an integral part
of
this Subscription Agreement and shall survive the Closing of the purchase and
sale of Units and shall continue in full force and effect for the benefit of
the
Subscriber in accordance with the Agency Agreement.
5.2 The
Corporation hereby represents and warrants to, and covenants with, the
Subscriber as follows and acknowledges that the Subscriber is relying on such
representations and warranties in connection with the transactions contemplated
herein that:
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(a)
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the
Corporation is not an "investment company" within the meaning of
the
Investment
Company Act of 0000
(Xxxxxx
Xxxxxx);
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(b)
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the
Corporation is a "foreign issuer" (as such term is defined in Regulation
S
of the U.S. Securities Act) and there is no "substantial U.S. market
interest" (as such tern is defined in Regulation S of the U.S. Securities
Act) in the Securities;
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(c)
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neither
the Corporation nor any of its affiliates, nor any person acting
on its or
their behalf (i) has made or will make any "directed selling efforts"
(as
such term is defined in Regulation S of the U.S. Securities Act)
in the
United States, or (ii) has engaged in or will engage in any form
of
"general solicitation" or "general advertising" (as such terns are
defined
in Rule 502 (c) under Regulation D of the U.S. Securities Act) in
the
United States with respect to offers or sales of the
Securities;
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| (d) |
the
Corporation is not required to file reports under Section 13(a) or
Section
15(d) of the United States Securities Exchange Act of 1934, as
amended;
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(e)
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the
Corporation has not, for a period of six months prior to the date
hereof,
sold, offered for sale or solicited any offer to buy any of its securities
in a manner that would be integrated with the offer and sale of the
Units
and would cause the exemption from registration set forth in Rule
506 of
Regulation D or Rule 903 of Regulation S of the U.S. Securities Act
to
become unavailable with respect to the offer and sale of the Securities;
and
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(f)
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the
Corporation will use its best efforts to remain a "foreign issuer"
(as
such teen is defined in Regulation S of the U.S. Securities Act)
for a
period of eighteen (18) months following the Closing
Date.
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5.3 The
Corporation shall indemnify, defend and hold the Subscriber (which term shall,
for the purposes of this Section, include the Subscriber or its shareholders,
managers, partners, directors, officers, members, employees, direct or indirect
investors, agents and affiliates and assignees and the stockholders, partners,
directors, members, managers, officers, employees direct or indirect investors
and agents of such affiliates and assignees) harmless against any and all
liabilities, loss, cost or damage, together with all reasonable costs and
expenses related thereto (including reasonable legal and accounting fees and
expenses), arising from, relating to, or connected with an untrue, inaccurate
or
breached statement, representation, warranty or covenant of the Corporation
contained herein or in the Agency Agreement. The Corporation undertakes to
notify the Subscriber immediately of any change in any representation, warranty
or other material information relating to the Corporation set forth in this
Subscription Agreement or in the Agency Agreement which takes place prior to
the
Closing Time and of any change that would cause the representations, warranties
and covenants of the Corporation set forth in paragraphs (a), (b), (c), (d)
and
(f) of Section 5.2 above to be untrue for a period of eighteen (18) months
following the Closing Date.
ARTICLE
6 - ACKNOWLEDGEMENTS, COVENANTS,
REPRESENTATIONS
AND WARRANTIES OF THE SUBSCRIBER
6.1 Acknowledgements,
Representations, Warranties and Covenants
of
the Subscriber
The
Subscriber, on its own behalf and, if applicable and as permitted under
applicable Securities Laws, on behalf of each beneficial purchaser for whom
it
is acting, hereby represents and warrants to, and covenants with, the
Corporation as follows and acknowledges that the Corporation and the Agent
are
relying on such representations and warranties in connection with the
transactions contemplated herein:
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(a)
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The
Subscriber, and if applicable) each beneficial purchaser for whom
it is
acting, is a resident in the jurisdiction set out on the face page
of this
Subscription Agreement and the Subscriber and any such beneficial
purchaser was solicited to purchase the Units solely in such jurisdiction.
Such address was not created and is not used solely for the purpose
of
acquiring the Units and the Subscriber and any beneficial purchaser
was
solicited to purchase the Units solely in such
jurisdiction.
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(b)
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If
the Subscriber, and (if applicable) any beneficial purchaser for
whom it
is acting, are resident in any of the provinces of Ontario, Alberta
and
British Columbia, or of a jurisdiction other than Canada or the United
States or are otherwise subject to the securities laws of any of
such
provinces or jurisdictions, the Subscriber, on its own behalf and
(if
applicable) on behalf of any such beneficial purchaser, makes the
representations, warranties and covenants set out in either Schedule
"A",
Schedule "B" or Schedule "C", as applicable, with the Corporation,
and the
Subscriber, and (if applicable) any such beneficial purchaser, may
avail
itself of one or more of the categories of prospectus exempt purchasers
listed in one of Schedule "A", Schedule "B" or Schedule "C", as
applicable.
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(c)
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The
Subscriber has properly completed, executed and delivered within
applicable time periods to the Corporation the applicable certificate
and
form (dated as of the date hereof) set forth in either Schedule "A",
Schedule "B" or Schedule "C" and (if applicable) Schedule "D" and
the
information contained therein is true and
correct.
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(d)
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The
representations, warranties and covenants contained in the applicable
Schedules will be true and correct both as of the date of execution
of
this Subscription Agreement and as of the Closing
Time.
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(e)
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The
Subscriber or (if applicable) any beneficial purchaser for whom it
is
acting is neither a U.S. Purchaser nor subscribing for the Units
for the
account of a U.S. Purchaser or for resale in the United States and
the
Subscriber confirms that:
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(i) the
offer
was not made to the Subscriber when the Subscriber was in the United States
and,
at the time the Subscriber's buy order was made, the Subscriber was outside
the
United States;
(ii) the
Subscriber was outside the United States at the time this Subscription Agreement
was executed and delivered;
(iii) the
Subscriber is not and will not be purchasing the Securities for the account
or
benefit of any person in the United States;
(iv) the
current structure of this transaction and all transactions and activities
contemplated hereunder is not a scheme to avoid the registration requirements
of
the U.S. Securities Act; and
(v) the
Subscriber has no intention to distribute either directly or indirectly any
of
the Securities in the United States, neither the Subscriber nor any beneficial
purchaser for whom it is acting will offer, sell or otherwise
dispose of the Common Shares, Warrants and Warrant Shares in
the
United States or to any person in the United States unless such offer, sale
or
disposition is made in accordance with an exemption from the
8
registration
requirements under the U.S. Securities Act and the securities laws of all
applicable states of the United States or the U.S. Securities and Exchange
Commission has declared effective a registration statement in respect of such
securities.
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(f)
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If
the Subscriber, or any beneficial purchaser for whom it is acting,
is not
a person resident in Canada, the subscription for the Units by the
Subscriber, or such beneficial purchaser, does not contravene any
of the
applicable securities legislation in the jurisdiction in which the
Subscriber or such beneficial purchaser resides and does not give
rise to
any obligation of the Corporation or the Agent to prepare and file
a
prospectus or similar document or to register the Units or to be
registered with or to file any report or notice with any governmental
or
regulatory authority.
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(g)
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The
execution and delivery of this Subscription Agreement, the performance
and
compliance with the terms hereof, the subscription for the Units
and the
completion of the transactions described herein by the Subscriber
will not
result in any material breach of, or be in conflict with or constitute
a
material default under, or create a state of facts which, after notice
or
lapse of time, or both, would constitute a material default under
any term
or provision of the constating documents, by-laws or resolutions
of the
Subscriber, the Securities Laws or any other laws applicable to the
Subscriber, any agreement to which the Subscriber is a party, or
any
judgment, decree, order, statute, rule or regulation applicable to
the
Subscriber.
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(h)
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If
the Subscriber is subscribing for the Units as principal, it is doing
so
for its own account and not for the benefit of any other person (within
the meaning of applicable Securities Laws) and not with a view to
the
resale or distribution of all or any of the Units or if it is not
subscribing as principal, it acknowledges that the Corporation may
be
required by law to disclose to certain regulatory authorities the
identity
of each beneficial purchaser of the Units for whom it is
acting.
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(i)
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In
the case of a subscription for the Units by the Subscriber acting
as
trustee or agent (including, for greater certainty, a portfolio manager
or
comparable adviser) for a principal, the Subscriber is duly authorized
to
execute and deliver this Subscription Agreement and all other necessary
documentation in connection with such subscription on behalf of each
such
beneficial purchaser, each of whom is subscribing as principal for
its own
account, not for the benefit of any other person and not with a view
to
the resale or distribution of the Common Shares and Warrants, and
this
Subscription Agreement has been duly authorized, executed and delivered
by
or on behalf of and constitutes a legal, valid and binding agreement
of,
such principal, and the Subscriber acknowledges that the Corporation
and/or the Agent may be required by law to disclose the identity
of each
beneficial purchaser for whom the Subscriber is
acting.
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(j)
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In
the case of a subscription for the Units by the Subscriber acting
as
principal, this Subscription Agreement has been duly authorized,
executed
and delivered by, and constitutes a legal, valid and binding agreement
of,
the Subscriber. This Subscription Agreement is enforceable in accordance
with its terms against the Subscriber and (if applicable) any beneficial
purchaser on whose behalf the Subscriber is
acting.
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(k)
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If
the Subscriber is:
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(i)
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a
corporation, the Subscriber is duly incorporated and is validly subsisting
under the laws of its jurisdiction of incorporation and has all requisite
legal and corporate power and authority to execute and deliver this
Subscription Agreement, to subscribe for the Units as contemplated
herein
and to observe and perform its obligations under the terms of this
Subscription Agreement;
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(ii)
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a
partnership, syndicate or other form of unincorporated organization,
the
Subscriber has the necessary legal capacity and authority to execute
and
deliver this Subscription Agreement and to observe and perform its
covenants and obligations hereunder and has obtained all necessary
approvals in respect thereof; or
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(iii)
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an
individual, the Subscriber is of the full age of majority and is
legally
competent to execute this Subscription Agreement and to observe and
perform his or her covenants and obligations
hereunder.
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(l)
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Other
than the Agent (and any group of investment dealers managed by the
Agent
for the purposes of offering the Units for sale), there is no person
acting or purporting to act in connection with the transactions
contemplated herein who is entitled to any brokerage or finder's
fee. If
any person establishes a claim that any fee or other compensation
is
payable in connection with this subscription for the Units, the Subscriber
covenants to indemnify and hold harmless the Corporation and the
Agent
with respect thereto and with respect to all costs reasonably incurred
in
the defence thereof.
|
|
(m)
|
The
Subscriber is not, with respect to the Corporation or any of its
affiliates, a Control Person.
|
|
(n)
|
If
required by applicable Securities Laws or the Corporation, the Subscriber
will execute, deliver and file or assist the Corporation in filing
such
reports, undertakings and other documents with respect to the issue
of the
Common Shares, Warrants or Warrant Shares as may be required by any
securities commission, stock exchange or other regulatory
authority.
|
10
|
(o)
|
The
Subscriber, and each beneficial purchaser for whom it is acting,
have been
advised to consult their own legal advisors with respect to trading
in
the
Common Shares, Warrants, and Warrant Shares and with respect to
the resale
restrictions imposed by the Securities Laws of the province in
which the
Subscriber resides and other applicable securities laws, and acknowledges
that no representation has been made respecting the applicable
hold
periods imposed by the Securities Laws and other applicable securities
laws or other resale restrictions applicable to such securities
which
restrict the ability of the Subscriber (or others for whom it is
acting)
to resell such securities, that the Subscriber (or others for whom
it is
acting) is solely responsible to find out what these restrictions
are and
the Subscriber is solely responsible (and neither the Corporation
nor the
Agent are in any way responsible) for compliance with applicable
resale
restrictions and the Subscriber is aware that it (or beneficial
purchaser
for whom it is acting) may not be able to resell such securities
except in
accordance with limited exemptions under the Securities Laws and
other
applicable securities laws.
|
|
(p)
|
The
Subscriber has not received or been provided with a prospectus, offering
memorandum, within the meaning of the Securities Laws, or any sales
or
advertising literature in connection with the Offering and the
Subscriber's decision to subscribe for the Units was not based upon,
and
the Subscriber has not relied upon, any oral or written representations
as
to facts made by or on behalf of the Corporation or the Agent. The
Subscriber's decision to subscribe for the Units was based solely
upon the
Term Sheet attached hereto as Schedule "B" and information about
the
Corporation which is publicly available (any such information having
been
obtained by the Subscriber without independent investigation or
verification by the Agent).
|
|
(q)
|
The
Subscriber is not purchasing Units with knowledge of material information
concerning the Corporation which has not been generally disclosed
on
SEDAR.
|
|
(r)
|
No
person has made any written or oral
representations:
|
|
(i)
|
that
any person will resell or repurchase the Common Shares, the Warrants
or
the Warrant Shares;
|
|
(ii)
|
that
any person will refund the Subscription Price;
or
|
|
(iii)
|
as
to the future price or value of the Common Shares, the Warrants or
the
Wan-ant Shares.
|
|
(s)
|
The
subscription for the Units has not been made through or as a result
of,
and the distribution of the Common Shares and Warrants is not being
accompanied by any advertisement, including without limitation in
printed
public media, radio, television or telecommunications, including
electronic display, or as part of a general
solicitation.
|
11
|
(t)
|
None
of the funds being used to purchase Units are, to the Subscriber's
knowledge, proceeds obtained or derived directly or indirectly as
a result
of illegal activities.
|
6.2 Acknowledgments
of the Subscriber
The
Subscriber, on its own behalf and, if applicable, on behalf of each beneficial
purchaser for whom it is acting, acknowledges and agrees as
follows:
|
(a)
|
The
Subscriber has received a copy of the Term Sheet setting out the
principal
terms of the Offering.
|
|
(b)
|
The
Subscriber acknowledges that the aggregate gross proceeds of the
Offering
will be up to $7,750,000. The Subscriber further acknowledges that
in
addition to the Offering, the Corporation may issue Common Shares
or Units
to purchasers under non-brokered private
placements.
|
|
(c)
|
No
securities commission, agency, governmental authority, regulatory
body,
stock exchange or other regulatory body has reviewed or passed on
the
merits of the Common Shares, the Warrants or the Warrant
Shares.
|
|
(d)
|
The
Common Shares and Warrants shall be, and the Warrant Shares may be,
subject to statutory resale restrictions under the Securities Laws
of the
province in which the Subscriber resides and under other applicable
securities laws, and the Subscriber covenants that it will not resell
the
Common Shares, Warrants or Warrant Shares except in compliance with
such
laws and the Subscriber acknowledges that it is solely responsible
(and
neither the Corporation nor the Agent are in any way responsible)
for such
compliance.
|
|
(e)
|
The
Subscriber's ability to, transfer the Common Shares, Warrants and
Warrant
Shares is limited by, among other things, applicable Securities
Laws.
|
|
(f)
|
The
certificates representing the Common Shares and Warrants will bear,
as of
the Closing Date, legends substantially in the following form and
with the
necessary information inserted:
|
"UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND ONE (1)
DAY AFTER CLOSING DATE>."
In
addition, the Common Shares will also bear a legend substantially in the
following form:
12
"WITHOUT
PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL
APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED
ON OR
THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR
TO
OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL < INSERT THE DATE THAT IS
FOUR (4) MONTHS AND ONE (1) DAY AFTER THE CLOSING
DATE>."
|
(g)
|
In
the event that holders of Warrants exercise the Warrants prior to
the
expiry
of the hold periods applicable to the Warrants, the Warrant
Shares
will bear legends substantially in the following form and with the
necessary information inserted:
|
"UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND ONE (1)
DAY AFTER CLOSING DATE>.
"WITHOUT
PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL
APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED
ON OR
THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR
TO
OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL < INSERT THE DATE THAT IS
FOUR (4) MONTHS AND ONE (1) DAY AFTER THE CLOSING
DATE>."
|
(h)
|
The
Agent and/or its counsel, directors, officers, employees, agents
and
representatives assume no responsibility or liability of any nature
whatsoever
for the accuracy or adequacy of any such publicly available information
concerning the Corporation or as to whether all information concerning
the Corporation that is required to be disclosed or filed by
the
Corporation under the Securities Laws has been so disclosed or
filed.
|
|
(i)
|
The
Subscriber, and each beneficial purchaser for whom it is acting shall
execute,
deliver, file and otherwise assist the Corporation and the
Agent with
filing all documentation required by the applicable Securities Laws
to
permit
the subscription for the Units and the issuance of the Common Shares,
Warrants or Warrant Shares as may be
required.
|
13
(h)
|
(j)
|
The
Corporation is relying on the representations, warranties and covenants
contained herein and in the applicable Schedules attached hereto
to
determine the Subscriber's eligibility to subscribe for the Units
under
applicable Securities Laws and other applicable securities laws and
the
Subscriber agrees to indemnify the Corporation, the Agent and each
of
their respective directors and officers against all losses, claims,
costs,
expenses, damages or liabilities which any of them may suffer or
incur as
a result of or arising from reliance thereon. The Subscriber undertakes
to
immediately notify the Corporation of any change in any statement
or other
information relating to the Subscriber set forth in such applicable
Schedules which takes place prior to the Closing
Time.
|
|
(k)
|
The
Corporation is relying on an exemption from the requirement to provide
the
Subscriber with a prospectus under the Securities Laws and, as a
consequence of acquiring the Common Shares, Warrants and Warrant
Shares
pursuant to such exemption, certain protections, rights and remedies
provided by the Securities Laws, including statutory rights of rescission
and/or damages, will not be available to the
Subscriber.
|
|
(l)
|
The
Common Shares, Warrants and the Warrant Shares are being offered
pursuant
to an exclusion from the registration requirements of the U.S. Securities
Act pursuant to Regulation S promulgated thereunder. The Common Shares,
Warrants and the Warrant Shares have not been and will not be registered
under the U.S. Securities Act and may not be offered or sold in the
United
States or to U.S. Purchasers unless registered under such act or
an
exemption from the registration requirements of such act is
available.
|
|
(m)
|
The
Subscriber acknowledges that the Warrants may not be exercised in
the
United States by or on behalf of a U.S. Purchaser, unless the Common
Shares, Warrants and Warrant Shares are registered under the U.S.
Securities Act and applicable state securities law or unless the
Corporation has consented to such offer, sale or distribution and
such
exercise is made in accordance with an exemption from the registration
requirements under the U.S. Securities Act and the securities laws
of all
applicable states of the United
States.
|
|
(n)
|
The
Subscriber, and each beneficial purchaser for whom it is acting,
is
responsible for obtaining such legal and tax advice as it considers
appropriate in connection with the execution, delivery and performance
of
this Subscription Agreement and the transactions contemplated under
this
Subscription Agreement.
|
14
|
(o)
|
There
is no government or other insurance covering the Common Shares, Warrants,
or the Warrant Shares.
|
|
(p)
|
There
are risks associated with the purchase of the Common Shares, Warrants,
or
Warrant Shares.
|
6.3 Reliance
on Representations, Warranties, Covenants and
Acknowledgements
The
Subscriber acknowledges and agrees that the representations, warranties,
covenants and acknowledgements made by the Subscriber in this Subscription
Agreement are made with the intention that they may be relied upon by the
Corporation and the Agent in determining the Subscriber's eligibility (and,
if
applicable, the eligibility of others for whom the Subscriber is acting) to
purchase the Units under the Securities Laws and other applicable securities
laws. The Subscriber further agrees that by accepting the Units, the Subscriber
shall be representing and warranting that such representations, warranties,
acknowledgements and covenants are true as at the Closing Time with the same
force and effect as if they had been made by the Subscriber at the Closing
Time
and that they shall survive the purchase by the Subscriber of the Units and
shall continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of any of the Common Shares, Warrants or Warrant
Shares.
ARTICLE
7 - SURVIVAL OF REPRESENTATIONS,
WARRANTIES
AND COVENANTS
7.1 Survival
of Representations, Warranties and Covenants of the
Corporation
The
representations, warranties and covenants of the Corporation contained in this
Subscription Agreement shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Subscriber with respect
thereto, shall continue in fall force and effect for the benefit of the
Subscriber and the Agent.
7.2 Survival
of Representations, Warranties and Covenants of the
Subscriber
The
representations, warranties and covenants of the Subscriber contained in this
Subscription Agreement shall survive the Closing and, notwithstanding such
Closing or any investigation made by or on behalf of the Corporation or the
Agent with respect thereto, shall continue in full force and effect for the
benefit of the Corporation and the Agent.
ARTICLE
8 - COMMISSION
8.1
Commission
to Agent
The
Subscriber understands that in connection with the issue and sale of the Units
pursuant to the Offering: (a) the Agent will receive from the Corporation on
Closing, a cash commission equal to 7% of the aggregate Subscription Price;
and
(b) the Corporation will also grant to the Agent options (the "Compensation
Options") equal
in
number to 10% of the number of Units sold pursuant to the Offering. Each
Compensation Option will entitle the Agent to purchase one Common Share at
$1.25
for a period of twenty-four (24) months following the Closing Date, provided
that if at any time the closing trading price of the Common Shares for
any 20 consecutive trading days exceeds $2.50, the
Corporation may accelerate the expiry date of the Compensation Option by giving
notice to the Agent and in such case the Compensation Option will expire on
the
30th
calendar
day after the date on which such notice is deemed to be received by the Agent.
No other fee or commission is payable by the Corporation in connection with the
completion of the Offering. However, the Corporation will pay certain fees
and
expenses of the Agent in connection with the Offering, as set out in the Agency
Agreement.
15
ARTICLE
9 - COLLECTION OF PERSONAL INFORMATION
9.1 Collection
of Personal Information
The
Subscriber (on its own behalf and, if applicable, on behalf of each beneficial
purchaser for whose benefit the Subscriber is acting) acknowledges and consents
to the fact the Corporation and the Agent are collecting the Subscriber's (and
any beneficial purchaser's) personal information for the purpose of completing
the Subscriber's subscription. The Subscriber (on its own behalf and, if
applicable, on behalf of each beneficial purchaser for whose benefit the
Subscriber is acting) acknowledges and consents to the Corporation and Agent
retaining the personal information for as long as permitted or required by
applicable law or business practices. The Subscriber (on its own behalf and,
if
applicable, on behalf of each beneficial purchaser for whose benefit the
Subscriber is acting) further acknowledges and consents to the fact the
Corporation or the Agent may be required by applicable Securities Laws, stock
exchange rules, and Investment Dealers Association of Canada rules to provide
regulatory authorities any personal information provided by the Subscriber
respecting itself (and any
beneficial purchaser). The Subscriber represents and warrants that it has the
authority to provide the consents and acknowledgements set out in this paragraph
on behalf of all beneficial purchasers.
ARTICLE
10 - MISCELLANEOUS
10.1 Further
Assurances
Each
of
the parties hereto upon the request of each of the other parties hereto, whether
before or after the Closing Time, shall do, execute, acknowledge and deliver
or
cause to be done, executed, acknowledged and delivered all such further acts,
deeds, documents, assignments, transfers, conveyances, powers of attorney and
assurances as may reasonably be necessary or desirable to complete the
transactions contemplated herein.
10.2 Notices
|
(a)
|
Any
notice, direction or other instrument required or permitted to be
given to
any party hereto shall be in writing and shall be sufficiently given
if
delivered personally, or transmitted by facsimile tested prior to
transmission to such party, as
follows:
|
|
(i)
|
in
the case of the Corporation, to:
|
0000-0000
Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
X.X. X0X 0X0
Attention:
President
Fax:
(000)
000-0000
16
with
a
copy to :
Vector
Corporate Finance Lawyers
0000
-
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
X.X. X0X 0X0
Attention:
Xxxxxx Xxxxx
Fax:
(000)
000-0000
(ii) in
the
case of the Subscriber, at the address specified on the face page hereof, with
a
copy to the Agent at:
Research
Capital Corporation
000
Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx-Xxxxxxxx
Centre
Xxx
000
Xxxxxxx,
XX X0X 0X0
Attention:
Vice President, Investment Banking
Fax:
(000)
000-0000
with
a
copy to:
Xxxxxxx
and Xxxx LLP
2300
-
000 Xxxx Xxxxxx Xxxx
Xxxxxxx,
XX X0X 0X0
Attention:
Xxxx Xxxxxxx
Fax:
(000)
000-0000
|
(b)
|
Any
such notice, direction or other instrument, if delivered personally,
shall
be deemed to have been given and received on the day on which it
was
delivered, provided that if such day is not a Business Day then the
notice, direction or other instrument shall be deemed to have been
given
and received on the first Business Day next following such day and
if
transmitted by fax, shall be deemed to have been given and received
on the
day of its transmission, provided that if such day is not a Business
Day
or if it is transmitted or received after the end of normal business
hours
then the notice, direction or other instrument shall be deemed to
have
been given and received on the first Business Day next following
the day
of such transmission.
|
17
|
(c)
|
Any
party hereto may change its address for service from time to time
by
notice given to each of the other parties hereto in accordance with
the
foregoing provisions.
|
10.3 Time
of the Essence
Time
shall be of the essence of this Subscription Agreement and every part
hereof.
10.4 Costs
and Expenses
All
costs
and expenses (including, without limitation, the fees and disbursements of
legal
counsel) incurred in connection with this Subscription Agreement and the
transactions herein contemplated shall be paid and borne by the party incurring
such costs and expenses.
10.5 Applicable
Law
This
Subscription Agreement shall be construed and enforced in accordance with,
and
the rights of the parties shall be governed by, the laws of the province of
Ontario and the laws of Canada applicable therein. Any and all disputes arising
under this Subscription Agreement, whether as to interpretation, performance
or
otherwise, shall be subject to the non-exclusive jurisdiction of the courts
of
the province of Ontario and each of the parties hereto hereby irrevocably
attorns to the jurisdiction of the courts of such province.
10.6 Entire
Agreement
This
Subscription Agreement, including the Schedules hereto, constitutes the entire
agreement between the parties with respect to the transactions contemplated
herein and cancels and supersedes any prior understandings, agreements,
negotiations and discussions between the parties. There are no representations,
warranties, teens, conditions, undertakings or collateral agreements or
understandings, express or implied, between the parties hereto other than those
expressly set forth in this Subscription Agreement or in any such agreement,
certificate, affidavit, statutory declaration or other document as aforesaid.
This Subscription Agreement may not be amended or modified in any respect except
by written instrument executed by each of the parties hereto.
10.7 Counterparts
This
Subscription Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall
constitute one and the same Subscription Agreement. Counterparts may be
delivered either in original or faxed form and the parties adopt any signature
received by a receiving fax machine as original signatures of the
parties.
10.8 Assignment
This
Subscription Agreement may not be assigned by either party except with the
prior
written consent of the other parties hereto.
18
10.9 Enurement
This
Subscription Agreement shall enure to the benefit of and be binding upon
the parties
hereto and their respective heirs, executors, successors (including any
successor by reason
of the
amalgamation or merger of any party), administrators and permitted
assigns.
[PAGE
INTENTIONALLY LEFT BLANK]
19
10.10 Acceptance
The
Corporation hereby accepts the subscription for Units as set forth on the face
page of this Subscription Agreement on the teens and conditions contained in
the
Subscription Agreement (including all applicable schedules) this day
of ,
2005.
|
POLYMET
MINING
CORP.
Per:
________________________________
Authorized
Signing Officer
|
20
SCHEDULE
"A"
CERTIFICATE
ONTARIO
RESIDENT EXEMPTION FORM
The
Subscriber (on its own behalf and, if applicable, on behalf of each beneficial
purchaser on whose behalf the Subscriber is acting) represents, warrants and
covenants to the Corporation and the Agent and acknowledges that the Corporation
and the Agent, and their counsel, are relying thereon that: [Initial or place
a
checkmark in the box to the left of each applicable item; choose only one of
item (a) or (b) below and choose only one sub item in (a) or
(b)]:
|
o
|
(a)
|
Accredited
Investor Certificate and:
|
|
|
o
|
(i)
|
if
purchasing the securities as principal, the Subscriber is an "accredited
investor" (as such term is defined in Rule 45-501 of the Ontario
Securities Commission ("Rule
45-501")), is
purchasing the securities as principal for its own account and not
for the
benefit of any other person, it is purchasing for investment only
and not
with a view to resale or distribution and no other person, corporation,
fine or other organization has a beneficial interest in the said
securities being purchased; or
|
|
|
o
|
(ii)
|
if
purchasing the securities as agent for a principal disclosed on the
cover
page of this Subscription Agreement, the Subscriber is an agent or
trustee
of such disclosed principal and such disclosed principal for whom
the
Subscriber is acting is an "accredited investor", is purchasing the
securities as principal for its own account and not for the benefit
of any
other person, and is purchasing for investment only and not with
a view to
resale or distribution and no other person, corporation, fine or
other
organization has a beneficial interest in the said securities being
purchased; OR
|
|
|
(b)
|
the
Subscriber is resident in Ontario and is purchasing the securities
for a
principal or principals which is or are undisclosed or identified
by
account number only and the Subscriber is:
|
||
|
o
|
(i)
|
a
portfolio adviser (as such tern is defined in Rule 45-501) and is
purchasing the securities for one or more managed accounts (as defined
in
Rule 45-501); or
|
|
|
o
|
(ii)
|
a
trust corporation registered under the Loan
and Trust Corporations Act (Ontario)
or under the Trust
and Loan Companies Act (Canada)
or under comparable legislation in any jurisdiction and is purchasing
the
securities for an account that is fully managed by such trust
corporation.
|
|
ONTARIO
RESIDENT ACCREDITED INVESTOR CERTIFICATE
The
Subscriber hereby represents, warrants and certifies to the Corporation and
the
Agent that
the Subscriber (or its disclosed principal) is an "accredited investor" as
defined in Rule 45-501 by virtue of being: [check appropriate
boxes]
Accredited
Investors
|
o
|
(a)
|
a
bank listed in Schedule I or II of the Bank
Act (Canada),
or an authorized foreign bank listed in Schedule III of the Bank
Act (Canada);
|
|
o
|
(b)
|
the
Business Development Bank incorporated under the Business
Development Bank Act
(Canada);
|
|
o
|
(c)
|
a
loan corporation or trust corporation registered under the Loan
and Trust Corporations Act (Ontario)
or under the Trust
and Loan Corporations Act (Canada),
or under comparable legislation in any other
jurisdiction;
|
|
o
|
(d)
|
a
co-operative credit society, credit union central, federation of
caisses
populaires, credit union or league, or regional caisse populaire,
or an
association under the Cooperative
Credit Associations Act (Canada),
in each case, located in Canada;
|
|
o
|
(e)
|
a
company licensed to do business as an insurance company in any
jurisdiction of Canada;
|
|
o
|
(f)
|
a
subsidiary entity of any company referred to in paragraph (a), (b),
(c),
(d) or (e), where the company owns all of the voting shares of the
subsidiary entity;
|
|
o
|
(g)
|
a
person or company registered under the Securities
Act (Ontario)
or securities legislation in another jurisdiction of Canada as an
adviser
or dealer, other than a limited market dealer;
|
|
o
|
(h)
|
the
government of Canada or of any jurisdiction, or any crown corporation,
instrumentality or agency of a Canadian federal, provincial or territorial
government;
|
|
o
|
(i)
|
any
Canadian municipality or any Canadian provincial or territorial capital
city;
|
|
o
|
(j)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any instrumentality or agency
thereof;
|
|
o
|
(k)
|
a
pension fund that is regulated by either the Office of the Superintendent
of Financial Institutions (Canada) or a provincial pension commission
or
similar regulatory authority;
|
|
o
|
(l)
|
a
registered charity under the Income
Tax Act (Canada);
|
|
o
|
(m)
|
an
individual who beneficially owns, or who together with a spouse
beneficially own, financial assets having an aggregate realizable
value
that, before taxes but net of any related liabilities, exceeds
$1,000,000;
|
|
o
|
(n)
|
an
individual whose net income before taxes exceeded $200,000 in each
of the
two most recent years or whose net income before taxes combined with
that
of a spouse exceeded $300,000 in each of those years and who, in
either
case, has a reasonable expectation of exceeding the same net income
level
in the current year;
|
|
o
|
(o)
|
an
individual who has been granted registration under the Securities
Act (Ontario)
or securities legislation in another jurisdiction of Canada as a
representative of a person or company referred to in paragraph (g),
whether or not the individual's registration is still in
effect;
|
|
o
|
(p)
|
a
promoter
of the Corporation or an affiliated entity of a promoter of the
Corporation;
|
|
o
|
(q)
|
a
spouse, parent, brother, sister, grandparent or child of an officer,
director or promoter of the Corporation;
|
|
o
|
(r)
|
a
person or company that, in relation to the Corporation, is an affiliated
entity or a person or company referred to in clause (c) of the definition
of distribution in subsection 1(1) of the Securities
Act (Ontario);
|
|
o
|
(s)
|
a
company, limited liability company, limited partnership, limited
liability
partnership, trust or estate, other than a mutual fund or non-redeemable
investment
fund, that had net assets of at least $5,000,000 as reflected in
its
most
recently prepared financial statements;
|
|
o
|
(t)
|
a
person or company that is recognized by the Ontario Securities Commission
as
an
accredited investor, pursuant to a discretionary order of the Ontario
Securities Commission;
|
|
o
|
(u)
|
a
mutual fund or non-redeemable investment fund that, in Ontario,
distributes its
securities only to persons or companies that are accredited
investors;
|
|
o
|
(v)
|
a
mutual fund or non-redeemable investment fund that, in Ontario,
distributes its
securities under a prospectus for which a receipt has been granted
by the
Director of the Ontario Securities Commission or, if it has ceased
distribution of its securities, previously distributed its securities
in
this manner;
|
|
o
|
(w)
|
a
fully managed account if it is acquiring a security that is not a
security
of a mutual fund or non-redeemable investment fund;
|
|
o
|
(x)
|
an
account that is fully managed by a trust corporation registered under
the Loan
and
Trust Corporations Act (Ontario)
or under the Trust
and Loan Companies Act (Canada),
or under comparable legislation in any other
jurisdiction;
|
|
o
|
(y)
|
an
entity organized outside of Canada that is analogous to any of the
entities referred to in paragraphs (a) through (g) and paragraph
(k) in
form and function; or
|
|
o
|
(z)
|
a
person or company in respect of which all of the owners of interests,
direct or indirect, legal or beneficial, are persons or companies
that are
accredited investors.
|
For
the purposes hereof, the following terms shall have the following
meanings:
"company"
means
any
corporation, incorporated association, incorporated syndicate or other
incorporated organization.
"control
person" means
any
person, company or combination of persons or companies holding a sufficient
number of any securities of the Corporation to affect materially the control
of
the Corporation, but any holding of any persons, company or combination of
persons
or companies holding more than 20 per cent of the outstanding voting securities
of the Corporation, in the absence of evidence to the contrary, shall be deemed
to affect materially the control of the Corporation.
"director"
where
used in relation to a person, includes a person acting in a capacity similar
to
that of a director of a company.
"entity"
means
a
company, syndicate, partnership, trust or unincorporated
organization.
"financial
assets"
means cash, securities, or any contract of insurance or deposit or evidence
thereof that is not a security for the purposes of the Securities Act
(Ontario).
"individual"
means
a
natural person, but does not include a partnership, unincorporated association,
unincorporated organization, trust or a natural person in his or her capacity
as
trustee, executor, administrator or other legal personal
representative.
"fully
managed account" means
an
investment portfolio account of a client established in writing with a portfolio
adviser who makes investment decisions for the account and has full discretion
to trade in securities of the account without requiring the client's express
consent to a transaction.
"mutual
fund" includes
an issuer whose primary purpose is to invest money provided by its security
holders and whose securities entitle the holder to receive on demand, or within
a specified period after demand, an amount computed by reference to the value
of
a proportionate interest in the whole or in a part of the net assets, including
a separate fund or trust account, of the issuer of the securities.
"non-redeemable
investment fund" means
an
issuer
|
(a)
|
whose
primary purpose is to invest money provided by its
securityholders;
|
|
(b)
|
that
does not invest for the purpose of exercising effective control,
seeking
to exercise effective
control, or being actively involved in the management of the issuers
in
which it
invests, other than other mutual funds or non-redeemable investment
funds;
and
|
|
(c)
|
is
not a mutual fund.
|
"officer"
means
the chair, any vice-chair of the board of directors, the president, any
vice-president, the secretary, the assistant secretary, the treasurer, the
assistant treasurer, and the general manager of a company, and any other person
designated an officer or a company by by-law or similar authority, or any
individual acting in a similar capacity on behalf of the
Corporation.
"person"
means
an
individual, partnership, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, trustee, executor, administrator, or other
legal representative.
"portfolio
adviser" means
(a)
a portfolio manager; or (b) a broker or investment dealer exempted from
registration as an adviser under subsection 148(1) of the Regulation to the
Securities
Act (Ontario)
if that broker or investment dealer is not exempt from the by-laws or
regulations of the Toronto Stock Exchange or the Investment Dealers' Association
of Canada referred to in that subsection.
"promoter"
means
(a)
a person or company who, acting alone or in conjunction with one or more other
persons, companies or a combination thereof, directly or indirectly, has taken
the initiative in founding, organizing or substantially reorganizing the
business of the Corporation, or (b) a person or company who, in connection
with
the founding, organizing or substantial reorganizing of the business of the
Corporation, directly or indirectly, received in consideration of services
or
property, or both services and property, 10 per cent or more of any class of
securities of the Corporation or 10 percent or more of the proceeds from the
sale of any class of securities of a particular issue, but a person or company
who receives such securities or proceeds either solely as underwriting
commissions or solely in consideration of property shall not be deemed a
promoter within the meaning of this definition if such person or company does
not otherwise take part in founding, organizing, or substantially reorganizing
the business.
"related
liabilities" means
liabilities incurred or assumed for the purpose of financing the acquisition
or
ownership of financial assets and liabilities that are secured by financial
assets.
"spouse",
in
relation to an individual, means another individual to whom that individual
is
married, or another individual of the opposite sex or the same sex with whom
that individual is living in a conjugal relationship outside
marriage.
For
the
purposes of the foregoing:
|
(a)
|
a
person or company is considered to be an affiliated entity of another
person or company if one is a subsidiary entity of the other, or
if both
are subsidiary entities of the same person or company, or if each
of them
is controlled by the same person or
company.
|
|
(b)
|
a
person or company is considered to be controlled by a person or company
if
|
|
(i)
|
in
the case of a person or company,
|
|
(A)
|
voting
securities of the first mentioned person or company carrying more
than 50
percent of the votes for the election of directors are held, otherwise
than by way of security only, by or for the benefit of the other
person or
company, and
|
|
(B)
|
the
votes carried by the securities are entitled, if exercised, to elect
a
majority of the directors of the first-mentioned person or
company;
|
|
(ii)
|
in
the case of a partnership that does not have directors, other than
a
limited partnership, the second-mentioned person or company holds
more
than 50 percent of the interests in the partnership;
or
|
|
(iii)
|
in
the case of a limited partnership, the general partner is the
second-mentioned person or company;
and
|
| (c) |
a
person or company is considered to be a subsidiary entity of another
person or company if
|
|
(i)
|
it
is controlled by,
|
|
(A)
|
that
other, or
|
|
(B)
|
that
other and one or more persons or companies each of which is controlled
by
that other, or
|
|
(C)
|
two
or more persons or companies, each of which is controlled by that
other;
or
|
| (d) |
it
is a subsidiary entity of a person or company that is the other's
subsidiary entity.
|
The
foregoing representations contained in this certificate are true and accurate
as
of the date hereof and will be true and accurate as of the Closing Date.
If
any such representations shall not be true and accurate prior to the Closing
Date, the Subscriber shall give immediate notice to the Corporation and
Agent.
EXECUTED
by
the
Subscriber
at
this
day
of
,
2005.
|
If
a corporation, partnership or other entity:
|
If
an individual:
|
|
|
Print
Name of Subscriber
|
Print
Name
|
|
|
Signature
of Authorized Signatory
|
Signature
|
|
|
Name
and Position of Authorized Signatory
|
Jurisdiction
of Residence
|
|
|
Jurisdiction
of Residence
|
Print
Name of Witness
|
|
|
Signature
of Witness
|
||
SCHEDULE
"B"
ACCREDITED
INVESTOR CERTIFICATE UNDER MULTILATERAL INSTRUMENT 45-103
If
the
Subscriber is a resident of, or the purchase and sale of securities to the
Subscriber is otherwise subject to the securities legislation of Alberta or
British Columbia, the
Subscriber hereby represents, warrants and certifies to the Corporation and
the
Agent that the Subscriber (and, if applicable, each beneficial purchaser for
whom it is acting) is an "accredited investor" as defined in Section 1.1 of
Multilateral Instrument 45-103 (Capital Raising Exemptions), by virtue of
being:
[Check
appropriate item]
|
o
|
(a)
|
a
Canadian financial institution, or an authorized foreign bank listed
in
Schedule III of the
Bank Act (Canada);
|
|
o
|
(b)
|
the
Business Development Bank of Canada incorporated under the Business
Development Bank of Canada Act (Canada);
|
|
o
|
(c)
|
an
association under the Cooperative
Credit Associations Act (Canada)
located in Canada or a central cooperative credit society for which
an
order has been made under subsection 473(1) of that
Act;
|
|
o
|
(d)
|
a
subsidiary of any person or company referred to in paragraphs (a)
to (c),
if the person or company owns all of the voting securities of the
subsidiary, except the voting securities required by law to be owned
by
directors of that subsidiary;
|
|
o
|
(e)
|
a
person or company registered under the securities legislation of
a
jurisdiction of Canada, as an adviser or dealer, other than a limited
market dealer registered under the Securities
Act (Ontario)
or the Securities
Act (Newfoundland
and Labrador);
|
|
o
|
(f)
|
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada, as a representative of a
person
or company referred to in paragraph (e);
|
|
o
|
(g)
|
the
government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the government of Canada
or
a jurisdiction of Canada;
|
|
o
|
(h)
|
a
municipality, public board or commission in Canada;
|
|
o
|
(i)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that
government;
|
|
o
|
(j)
|
a
pension fund that is regulated by either the Office of the Superintendent
of Financial Institutions (Canada) or a pension commission or similar
regulatory authority of a jurisdiction of Canada;
|
|
o
|
(k)
|
an
individual who, either alone or with a spouse, beneficially owns,
directly
or indirectly, financial assets having an aggregate realizable value
that
before taxes, but net of any related liabilities, exceeds
$1,000,000;
|
|
o
|
(l)
|
an
individual whose net income before taxes exceeded $200,000 in each
of the
two most recent years or whose net income before taxes combined with
that
of a spouse exceeded $300,000 in each of the two most recent years
and
who, in either case, reasonably expects to exceed that net income
level in
the current year;
|
|
o
|
(m)
|
a
person or company, other than a mutual fund or non-redeemable investment
fund, that, either alone or with a spouse, has net assets of at least
$5,000,000, and unless the person or company is an individual, that
amount
is shown on its most recently prepared financial
statements;
|
|
o
|
(n)
|
a
mutual fund or non-redeemable investment fund that, in the local
jurisdiction, distributes its securities only to persons or companies
that
are accredited investors;
|
|
o
|
(o)
|
a
mutual fund or non-redeemable investment fund that, in the local
jurisdiction, is distributing or has distributed its securities under
one
or more prospectuses for which the regulator has issued
receipts;
|
|
o
|
(p)
|
a
trust company or trust corporation registered or authorized to carry
on
business under the Trust
and
Loan Companies Act
(Canada)
or under comparable legislation in a jurisdiction of Canada or a
foreign
jurisdiction, trading as a trustee or agent on behalf of a fully
managed
account;
|
|
o
|
(q)
|
a
person or company trading as agent on behalf of a fully managed account
if
that person or company is registered or authorized to carry on business
under the securities legislation of a jurisdiction of Canada or a
foreign
jurisdiction as a portfolio manager or under an equivalent category
of
adviser or is exempt from registration as a portfolio manager or
the
equivalent category or adviser;
|
|
o
|
(r)
|
a
registered charity under the Income
Tax Act
(Canada)
that, in regard to the trade, has obtained advice from an eligibility
adviser or other advisor registered to provide advice on the security
being traded;
|
|
o
|
(s)
|
an
entity organized in a foreign jurisdiction that is analogous to any
of the
entities referred to in paragraphs (a) through (e) and paragraph
(j) in
form and function; or
|
|
o
|
(t)
|
a
person or company in respect of which all of the owners of interests,
direct or indirect, legal or beneficial, except the voting securities
required by law to be owned by directors, are persons or companies
that
are accredited investors.
|
As
used
in this certificate, the following terms have the following
meanings:
"financial
assets"
means cash and securities; and
"related
liabilities"
means:
(a) liabilities incurred or assumed for the purpose of financing the acquisition
or ownership of financial assets, or (b) liabilities that are secured by
financial assets.
The
foregoing representations contained in this certificate are true and accurate as
of the date hereof and will be true and accurate as of the Closing Date.
If
any such representations shall not be true and accurate prior to the Closing
Date, the Subscriber shall give immediate notice to the Corporation and the
Agent.
EXECUTED
by
the
Subscriber
at
this
day
of
2005.
|
If
a corporation, partnership or other entity:
|
If
an individual:
|
|
|
|
||
|
Print
Name of Subscriber
|
Print
Name
|
|
|
Signature
of Authorized Signatory
|
Signature
|
|
|
Name
and Position of Authorized Signatory
|
Jurisdiction
of Residence
|
|
|
Jurisdiction
of Residence
|
Print
Name of Witness
|
|
|
Signature
of Witness
|
SCHEDULE
"C" CERTIFICATE
ADDITIONAL
REPRESENTATIONS, WARRANTIES AND COVENANTS
FOR
NON-CANADIAN SUBSCRIBERS
(OTHER
THAN U.S. SUBSCRIBERS)
The
Subscriber, on its own behalf and (if applicable) on behalf of others for whom
it is acting hereunder, further represents, warrants and covenants to and with
the Corporation and the Agent (and acknowledges that the Corporation and the
Agent are relying thereon) that it is, and (if applicable) any beneficial
purchaser for whom it is acting hereunder is, a resident of, or otherwise
subject to, the securities legislation of a jurisdiction other than Canada
or
the United States, and:
| (a) |
the
Subscriber is, and (if applicable) any other purchaser for whom it
is
acting hereunder, is:
|
|
(i)
|
a
purchaser that is recognized by the securities regulatory authority
in the
jurisdiction in which it is, and (if applicable) any other purchaser
for
whom it is acting hereunder is resident or otherwise subject to the
securities laws of such jurisdiction, as an exempt purchaser and
is
purchasing the Units as principal for its, or (if applicable) each
such
other pm-chaser's, own account, and not for the benefit of any other
person, for investment only and not with a view to resale or distribution;
or
|
|
(ii)
|
a
purchaser which is purchasing Units pursuant to an exemption from
any
prospectus or securities registration requirements (particulars of
which
are enclosed herewith) available to the Corporation, the Agent, the
Subscriber and any such other purchaser under applicable securities
laws
of their jurisdiction of residence or to which the Subscriber and
any such
other purchaser are otherwise subject to, and the Subscriber and
any such
other purchaser shall deliver to the Corporation and the Agent such
further particulars of the exemption and their qualification thereunder
as
the Corporation or the Agent may reasonably
request;
|
|
(b)
|
the
purchase of Units by the Subscriber, and (if applicable) each such
other
purchaser, does not contravene any of the applicable securities laws
in
such jurisdiction and does not trigger: (i) any obligation of the
Corporation to prepare and file a prospectus, an offering memorandum
or
similar document, or (ii) any obligation of the Corporation to make
any
filings with or seek any approvals of any kind from any regulatory
body in
such jurisdiction or any other ongoing reporting requirements with
respect
to such purchase or otherwise; or (iii) any registration or other
obligation on the part of the Corporation or the
Agent;
|
| (c) |
the
Subscriber is knowledgeable of, and has been independently advised
as to,
the securities laws of such jurisdiction as applicable to this Agreement;
and
|
|
(d)
|
the
Subscriber, and (if applicable) any other purchaser for whom it is
acting
hereunder will not sell or otherwise dispose of any Units or any
Common
Shares, Warrants and Warrant Shares underlying the Units (the "Underlying
Securities"),
except in accordance with applicable Canadian securities laws and
in
accordance with the rules and regulations of the TSXV, and if the
Subscriber, or (if applicable) such beneficial purchaser sell or
otherwise
dispose of any Units or Underlying Securities to a person other than
a
resident of Canada, the Subscriber, and (if applicable) such beneficial
purchaser, will obtain from such purchaser representations, warranties
and
covenants in the same form as provided in this Schedule "C" and shall
comply with such other requirements as the Corporation may reasonably
require.
|
Dated
at
this day
of
,
2005.
|
_______________________________________
Name
of Subscriber
By:
____________________________________
Signature
_______________________________________ Title |
SCHEDULE
"D"
FORM
4C
CORPORATE
PLACEE REGISTRATION FORM
Where
subscribers to a Private Placement are not individuals, the following
information about the placee must
be
provided. This Form will remain on file with the Exchange. The corporation,
trust, portfolio manager
or other entity (the "Placee") need only file it on one time basis, and it
will
be referenced for all subsequent
Private Placements in which it participates. If any of the information provided
in this Form changes,
the Placee must notify the Exchange prior to participating in further placements
with Exchange listed
companies. If as a result of the Private Placement, the Placee becomes an
Insider of the Issuer, Insiders
of the Placee are reminded that they must file a Personal Information Form
(2A)
or, if applicable,
Declarations, with the Exchange.
| 1. |
Placee
Information:
|
| (a) |
Name:
_________________________________________________________________________________
|
| (b) |
Complete
Address:
_______________________________________________________________________
|
| (c) |
Jurisdiction
of Incorporation or Creation:
_______________________________________________________
|
| 2. | (a) |
Is
the Placee purchasing securities as a portfolio manager (Yes/No)?
__________________________________
|
| (b) |
Is
the Placee carrying on business as a portfolio manager outside of
Canada
(Yes/No)?
_______________________________________________________________________________________
|
| 3. |
If
the answer to 2(b) above was "Yes", the undersigned certifies
that:
|
|
(a)
|
It
is purchasing securities of an Issuer on behalf of managed accounts
for
which it is making the investment decision to purchase the securities
and
has full discretion to purchase or sell securities for such accounts
without requiring the client's express consent to a
transaction;
|
| (b) |
it
carries on the business of managing the investment portfolios of
clients
through discretionary authority granted by those clients (a "portfolio
manager" business) in __________________ [jurisdiction], and it is
permitted by law to carry on a portfolio manager business in that
jurisdiction;
|
|
(c)
|
it
was not created solely or primarily for the purpose of purchasing
securities of the Issuer;
|
| (d) |
the
total asset value of the investment portfolios it manages on behalf
of
clients is not less than $20,000,000;
and
|
|
(e)
|
it
has no reasonable grounds to believe, that any of the directors,
senior
officers and other insiders of the Issuer, and the persons that carry
on
investor relations activities for the Issuer has a beneficial interest
in
any of the managed accounts for which it is
purchasing.
|
| 4. |
If
the answer to 2(a). above was "No", please provide the names and
addresses
of control persons of the Placee:
|
| Name | City |
Province or
State
|
Country |
The
undersigned acknowledges that it is bound by the provisions of applicable
Securities Law, including provisions concerning the filing of insider reports
and reports of acquisitions (See for example, sections 87 and 111 of the
Securities
Act (British
Columbia) and sections 176 and 182 of the Securities
Act (Alberta).
Acknowledgement
- Personal Information
"Personal
Information"
means
any information about an identifiable individual, and includes information
contained in sections 1, 2 and 4, as applicable, of this Fonn.
The
undersigned hereby acknowledges and agrees that it has obtained the express
written consent of each individual to:
|
(a)
|
the
disclosure of Personal Information by the undersigned to the Exchange
(as
defined in Appendix 6B) pursuant to this Form;
and
|
|
(b)
|
the
collection, use and disclosure of Personal Information by the Exchange
for
the purposes described in Appendix 6B or as otherwise identified
by the
Exchange, fiorn time to time.
|
Dated
at
________________________ on
______________________________________
|
_____________________________________________
(Name
of Purchaser - please print)
_____________________________________________
(Authorized
Signatory)
_____________________________________________
(Official
Capacity - please print)
_____________________________________________
(please
print name of individual whose signature appears
above)
|
THIS
IS
NOT A PUBLIC DOCUMENT
SCHEDULE
"E"
TERM
SHEET
POLYMET
MINING
CORP.
PRIVATE
PLACEMENT OF
UNITS
|
Issuer:
|
Polymet
Mining Corp. (the "Corporation")
|
|
Offering:
|
Up
to $7,750,000 in the aggregate for the Units (as hereinafter defined)
by
way of private placement exemptions from prospectus requirements,
subject
to the receipt of necessary regulatory approvals.
|
|
Issue:
|
Units
of the Corporation (the "Units")
are
offered at a price of $0.90
per
Unit. Each Unit consists of one common share in the capital of the
Corporation (a "Common
Share") and
one-half of one Common Share purchase warrant (each whole warrant,
a
"Warrant").
Each
(whole) Warrant entitles the holder to subscribe for one Common Share
for
a period of thirty (30) months following the Closing Date (as hereinafter
defined), at a price of $1.25; provided that, if at any time the
closing
trading price of the Common Shares for any 20 consecutive trading
days
exceeds $2.50, the Corporation may accelerate the expiry date of
the
Warrants by giving notice to the holders thereof and in such case
the
Warrants will expire on the 30th
calendar day after the date on which such notice is deemed to have
been
received by such holders.
|
|
Minimum
Subscription:
|
A
$5,000 minimum subscription will apply to subscribers resident in
the
Canadian Offering Jurisdictions (as hereinafter
defined).
|
|
Expenses:
|
The
Corporation will be responsible for certain reasonable expenses of
the
Offering.
|
|
Type
of Transaction:
|
Best
efforts, private placement, subject to a formal agency
agreement.
No
offering memorandum or other offering document will be furnished
to
subscribers of Units.
|
|
Qualifying
Jurisdictions:
|
The
Offering will be marketed to qualified investors in the provinces
of
Ontario, Alberta and British Columbia and in such other provinces
as
agreed by the Corporation and the Agent (the "Canadian
Offering Jurisdictions"). The
Offering may also be marketed to investors in the United States pursuant
to available exemptions from U.S. federal and state prospectus
requirements and to investors in offshore
jurisdictions.
|
|
Commission:
|
7%
of the aggregate gross proceeds, payable in cash upon the closing
of the
Offering.
|
|
Compensation
Options:
|
The
Corporation shall issue to the Agent on the closing of the Offering,
options (the
"Compensation Options") equal
in number to 10% of the number of Units sold pursuant to the Offering.
Each Compensation Option will entitle the Agent to purchase one Common
Share at $1.25 for a period of twenty-four (24) months following
the
Closing Date, provided that if at any time the closing trading price
of
the Common Shares for any 20 consecutive trading days exceeds $2.50,
the
Corporation may accelerate the expiry date of the Compensation Option
by
giving notice to the Agent and in such case the Compensation Option
will
expire on the 30t'1
calendar
day after the date on which such notice is deemed to be received
by the
Agent.
|
|
Closing
Date:
|
August
29, 2005 or such other date as may be agreed upon by the Corporation
and
the Agent.
|
|
Agent:
|
Research
Capital Corporation.
|
|
Use
of Proceeds:
|
For
working capital purposes and to advance the technical program with
respect
to NorthMet property and the Cliffs Erie facility.
|
