|
1
|
NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Glencore International plc
|
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
|
3
|
SEC USE ONLY
|
|||
|
4
|
SOURCE OF FUNDS (SEE INSTRUCTIONS):
AF (see Item 3)
|
|||
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
|
|||
|
6
|
CITIZEN OR PLACE OF ORGANIZATION
Jersey
|
|||
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
71,599,612
|
|
|
9
|
SOLE DISPOSITIVE POWER
0
|
|
|
10
|
SHARED DISPOSITIVE POWER
71,599,612
|
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,599,612
|
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.1%
|
|
14
|
TYPE OF REPORTING PERSON
CO; HC
|
|
1
|
NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Glencore International AG
|
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
|
3
|
SEC USE ONLY
|
|||
|
4
|
SOURCE OF FUNDS (SEE INSTRUCTIONS):
WC (see Item 3)
|
|||
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
|
|||
|
6
|
CITIZEN OR PLACE OF ORGANIZATION
Switzerland
|
|||
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
71,599,612
|
|
|
9
|
SOLE DISPOSITIVE POWER
0
|
|
|
10
|
SHARED DISPOSITIVE POWER
71,599,612
|
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,599,612
|
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.1%
|
|
14
|
TYPE OF REPORTING PERSON
CO; HC
|
|
1
|
NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Glencore AG
|
|
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
(a) ¨
(b) ¨
|
|
3
|
SEC USE ONLY
|
|||
|
4
|
SOURCE OF FUNDS (SEE INSTRUCTIONS):
WC (see Item 3)
|
|||
|
5
|
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
|
|||
|
6
|
CITIZEN OR PLACE OF ORGANIZATION
Switzerland
|
|||
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
71,599,612
|
|
|
9
|
SOLE DISPOSITIVE POWER
0
|
|
|
10
|
SHARED DISPOSITIVE POWER
71,599,612
|
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
71,599,612
|
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.1%
|
|
14
|
TYPE OF REPORTING PERSON
CO
|
|
Item 3.
|
Source and Amount of Funds or Other Consideration
|
|
|
·
|
terminate and discharge the Issuer Subsidiary’s obligation to issue, and Glencore AG’s obligation to purchase, the Tranche E Debenture;
|
|
|
·
|
extend the maturity date for each of the remaining Debentures from September 30, 2011 to September 30, 2012;
|
|
|
·
|
extend the expiration date of the Original Exchange Warrant from September 30, 2011 to September 30, 2012; and
|
|
|
·
|
cancel the 2008 Purchase Warrant and cause the Issuer to issue to Glencore a new warrant to purchase up to 3,000,000 Common Shares at an exercise price of US$2.00 per share.
|
|
|
·
|
each of the outstanding Debentures to extend the maturity date from September 30, 2012 to the earlier of (i) the date which is 10 business days after the date on which the Issuer and/or the Issuer Subsidiary has received all permits required to commence construction of the NorthMet mine and Erie Plant facilities in St. Louis County, Minnesota in a form reasonably acceptable to Glencore AG (the “NorthMet Project”) and the senior construction financing for the NorthMet Project is made available to the Issuer and/or the Issuer Subsidiary in a form reasonably acceptable to Glencore AG (collectively, the “Construction Prerequisites”) and (ii) September 30, 2014;
|
|
|
·
|
each of the outstanding Debentures to prohibit the Issuer from redeeming the outstanding Debentures prior to the Issuer and/or the Issuer Subsidiary satisfying the Construction Prerequisites; and
|
|
|
·
|
the 2010 Purchase Warrant to reduce the exercise price from US$2.00 to US$1.50 per Common Share; and
|
|
|
·
|
the 2010 Purchase Warrant to include a mandatory exercise feature if the 20-day volume weighted average price of the Common Shares is equal to or greater than 150% of the exercise price and the Issuer provides notice to Glencore AG that it has obtained the Construction Prerequisites.
|
|
Item 4.
|
Purpose of Transaction
|
|
Item 5.
|
Interest in Securities of the Issuer
|
|
Item 7
|
Material to Be Filed as Exhibits
|
|
Exhibit No.
|
Description
|
|
|
99.1
|
Joint Filing Agreement, dated December 6, 2011, between Glencore International plc, Glencore International AG and Glencore AG relating to the filing of a joint statement on Schedule 13D.
|
|
|
99.2
|
Purchase Agreement (incorporated by reference to Exhibit No. 99.2 to the Schedule 13D filed with the SEC on November 10, 2008).
|
|
|
99.3
|
Floating Rate Secured Debenture (incorporated by reference to Exhibit No. 99.3 to the Schedule 13D filed with the SEC on November 10, 2008).
|
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|
99.4
|
Parent Guarantee (incorporated by reference to Exhibit No. 99.4 to the Schedule 13D filed with the SEC on November 10, 2008).
|
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99.5
|
Security Agreement (incorporated by reference to Exhibit No. 99.5 to the Schedule 13D filed with the SEC on November 10, 2008).
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|
99.6
|
Security Agreement (incorporated by reference to Exhibit No. 99.6 to the Schedule 13D filed with the SEC on November 10, 2008).
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|
99.7
|
Pledge Agreement (incorporated by reference to Exhibit No. 99.7 to the Schedule 13D filed with the SEC on November 10, 2008).
|
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99.8
|
Exchange Warrant of PolyMet Mining Corp. (incorporated by reference to Exhibit No. 99.8 to the Schedule 13D filed with the SEC on November 10, 2008).
|
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|
99.9
|
Purchase Warrant of PolyMet Mining Corp. (incorporated by reference to Exhibit No. 99.9 to the Schedule 13D filed with the SEC on November 10, 2008).
|
|
|
99.10
|
Registration Rights Agreement (incorporated by reference to Exhibit No. 99.10 to the Schedule 13D filed with the SEC on November 10, 2008).
|
|
|
99.11
|
Amendment No. 1 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.11 to the Schedule 13D/A filed with the SEC on December 24, 2008).
|
|
|
99.12
|
Amendment No. 2 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.12 to the Schedule 13D/A filed with the SEC on December 24, 2008).
|
|
99.13
|
Amendment No. 3 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.13 to the Schedule 13D/A filed with the SEC on December 24, 2008).
|
|
|
99.14
|
Floating Rate Secured Debenture, due September 30, 2011 (incorporated by reference to Exhibit No. 99.14 to the Schedule 13D/A filed with the SEC on December 24, 2008).
|
|
|
99.15
|
Amendment No. 4 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.15 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.16
|
Amendment No. 5 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.16 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.17
|
Amendment No. 6 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.17 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.18
|
Amendment No. 7 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.18 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.19
|
Amendment No. 8 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.19 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.20
|
Floating Rate Secured Debenture, due September 30, 2011 (incorporated by reference to Exhibit No. 99.20 to the Schedule 13D/A filed with the SEC on June 22, 2009).
|
|
|
99.21
|
Amendment No. 9 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.21 to the Schedule 13D/A filed with the SEC on September 4, 2009).
|
|
|
99.22
|
Floating Rate Secured Debenture, due September 30, 2011 (incorporated by reference to Exhibit No. 99.22 to the Schedule 13D/A filed with the SEC on September 4, 2009).
|
|
|
99.23
|
Amendment No. 10 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.23 to the Schedule 13D/A filed with the SEC on November 3, 2009).
|
|
|
99.24
|
Amendment No. 11 relating to the Purchase Agreement (incorporated by reference to Exhibit No. 99.24 to the Schedule 13D/A filed with the SEC on November 23, 2009).
|
|
|
99.25
|
Subscription Agreement (incorporated by reference to Exhibit No. 99.25 to the Schedule 13D/A filed with the SEC on November 23, 2009).
|
|
|
99.26
|
Subscription Agreement (incorporated by reference to Exhibit No. 99.26 to the Schedule 13D/A filed with the SEC on November 23, 2009).
|
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99.27
|
Amendment and Waiver Agreement, dated as of November 12, 2010, by and between PolyMet Mining Corp. and Glencore AG (incorporated by reference to Exhibit No. 99.27 to the Schedule 13D/A filed with the SEC on November 15, 2010).
|
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99.28
|
Non-Transferable Common Share Purchase Warrant of Poly Met Mining Corp., dated November 12, 2010 (incorporated by reference to Exhibit No. 99.28 to the Schedule 13D/A filed with the SEC on November 15, 2010).
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|
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99.29
|
Registration Rights Agreement, dated as of November 12, 2010, by and between PolyMet Mining Corp. and Glencore AG (incorporated by reference to Exhibit No. 99.29 to the Schedule 13D/A filed with the SEC on November 15, 2010).
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99.30
|
Subscription Agreement, dated as of November 12, 2010, by and between PolyMet Mining Corp. and Glencore AG (incorporated by reference to Exhibit No. 99.30 to the Schedule 13D/A filed with the SEC on November 15, 2010).
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99.31
|
Waiver, dated as of July 14, 2011, from Glencore AG (incorporated by reference to Exhibit No. 31 to the Schedule 13D/A filed with the SEC on July 15, 2011).
|
|
|
99.32
|
Share Purchase Agreement, dated as of July 14, 2011, by and between Cliffs Erie L.L.C. and Glencore AG (incorporated by reference to Exhibit No. 32 to the Schedule 13D/A filed with the SEC on July 15, 2011).
|
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99.33
|
Subscription Agreement, dated as of November 30, 2011, by and between PolyMet Mining Corp. and Glencore AG.
|
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99.34
|
Non-Transferable Common Share Purchase Warrant of Poly Met Mining Corp., dated December 6, 2011.
|
|
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99.35
|
Amendment and Waiver Agreement, dated as of November 30, 2011, by and between PolyMet Mining Corp. and Glencore AG.
|
|
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99.36
|
Amended and Restated Exchange Warrant of PolyMet Mining Corp.
|
|
|
99.37
|
Registration Rights Agreement and Amendment to Existing Registration Rights Agreement, dated as of November 30, 2011, by and between PolyMet Mining Corp. and Glencore AG.
|
|
Glencore AG
|
|||
|
By:
|
/s/ Andreas Hubmann
|
||
|
Name:
|
Andreas Hubmann
|
||
|
Title:
|
Director
|
||
|
By:
|
/s/ Barbara Bodmer
|
||
|
Name:
|
Barbara Bodmer
|
||
|
Title:
|
Officer
|
||
|
Glencore International AG
|
|||
|
By:
|
/s/ Andreas Hubmann
|
||
|
Name:
|
Andreas Hubmann
|
||
|
Title:
|
Director
|
||
|
By:
|
/s/ Barbara Bodmer
|
||
|
Name:
|
Barbara Bodmer | ||
|
Title:
|
Officer
|
||
|
Glencore International plc
|
|||
|
By:
|
/s/ Steven Kalmin
|
||
|
Name:
|
Steven Kalmin
|
||
|
Title:
|
Director
|
||
|
Glencore AG
|
|||
|
By:
|
/s/ Andreas Hubmann
|
||
|
Name:
|
Andreas Hubmann
|
||
|
Title:
|
Director
|
||
|
By:
|
/s/ Barbara Bodmer
|
||
|
Name:
|
Barbara Bodmer
|
||
|
Title:
|
Officer
|
||
|
Glencore International AG
|
|||
|
By:
|
/s/ Andreas Hubmann
|
||
|
Name:
|
Andreas Hubmann
|
||
|
Title:
|
Director
|
||
|
By:
|
/s/ Barbara Bodmer
|
||
|
Name:
|
Barbara Bodmer
|
||
|
Title:
|
Officer
|
||
|
Glencore International plc
|
|||
|
By:
|
/s/ Steven Kalmin
|
||
|
Name:
|
Steven Kalmin
|
||
|
Title:
|
Director
|
||
|
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, (i) an aggregate of 13,333,333 common shares (the “Shares”) of the Company, no par value (the “Common Shares”), and (ii) warrants, in the form attached hereto as Exhibit A (the “Warrants”), to purchase up to an aggregate of 2,600,000 common shares (the “Warrant Shares”, and collectively with the Shares and Warrants, the “Securities”), for an aggregate purchase price of US$19,999,999.50 (the “Offering”).
|
|
2.
|
The proceeds of the Offering will be made available by the Company to Poly Met Mining Inc. (the “Subsidiary”) for (a) repayment of US$7.0 million of notes payable to Cliffs Erie L.L.C. (together with interest due and payable), and (b) permitting and other costs (including, without limitation, general corporate expenses) associated with the development of the NorthMet mine and Erie Plant facilities in St. Louis County, Minnesota (together with all related property and assets, the "Project").
|
|
3.
|
The closing (the “Closing”) of the purchase and sale of the Shares and Warrants shall occur within 3 Business Days following satisfaction of all of the conditions set forth in Paragraphs 10 and 11 and, in any event, Closing shall occur no later than February 29, 2012 (the “Closing Date”) at 10:00 am (New York time) at the offices of Troutman Sanders LLP, 405 Lexington Avenue, New York, New York 10174.
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|
4.
|
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.
|
|
5.
|
The Investor represents and warrants to the Company, as of the date hereof and as of the 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 this Subscription 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.
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|
|
(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.
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|
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(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.
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(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 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 the Securities; it has been independently advised by its own legal counsel as to the full particulars of restrictions with respect to trading in the Securities 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 Securities 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 Securities will bear a legend substantially similar to the following:
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|
(f)
|
The Investor is: (i) purchasing the Shares and Warrants 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 Shares and Warrants in reliance on the prospectus exemption set forth in Section 2.10 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 and Warrants, or deemed by NI 45-106 to be purchasing the Shares and Warrants, as principal and it was not created solely to purchase or hold the Shares and Warrants nor is it a trust company or trust corporation registered under the laws of Prince Edward 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 Shares and Warrants, it was, at the date hereof it is, and on the Closing Date and on each date on which it exercises any 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 Securities 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 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 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 Shares and Warrants; (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.
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(r)
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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.
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(s)
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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.
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(t)
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The Investor has sufficient funds to pay the aggregate subscription price in accordance with the terms of this Subscription Agreement.
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6.
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The Company represents and warrants to the Investor, as of the date hereof and as of the 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:
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(a)
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The Company has all necessary approvals of its directors and shareholders and all requisite power and authority to execute and deliver this Subscription Agreement and the Warrants, to perform all of its obligations hereunder and thereunder, and to undertake all actions required of the Company hereunder and thereunder.
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(b)
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The Company is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation.
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(c)
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This Subscription Agreement and the Warrants have 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.
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(d)
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The execution, delivery and performance by the Company of this Subscription Agreement and the Warrants and the completion of the transactions contemplated hereby and thereby 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.
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(e)
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The SEDAR database contains in a publicly available format, complete and correct copies of all financial statements, reports, schedules, forms, statements and other documents filed with or furnished to the Canadian Securities Administrators (the “CSA”) by the Company since January 1, 2009 (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 CSA Document required by law to be filed or furnished since January 1, 2009, 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”) (including, for clarity, International Financial Reporting Standards) 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).
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(f)
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The Company has filed or furnished all periodic reports (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the U.S. Securities and Exchange Commission (“SEC”) since January 1, 2009 (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 or furnished 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 or furnishing 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.
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(g)
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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 and the Warrants, 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 NYSE Amex (the “NYSE Amex”). Assuming the accuracy of each of the representations and warranties set forth in Paragraph 5, the issue of the Shares and the Warrant Shares upon exercise of the Warrants 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 and the Warrants, such issuance will be in accordance with the rules of the TSX and the NYSE Amex.
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(h)
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Upon the Closing, the Shares and the Warrants will be duly authorized and validly issued and outstanding Common Shares and Warrants, as the case may be, 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 and Warrants, as the case may be, will be fully paid and non-assessable and shall be free and clear of any liens. Upon exercise in accordance with the Warrants, the Warrant 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 full exercise price for the Warrant Shares, the Warrant Shares will be fully paid and non-assessable and shall be free and clear of any liens.
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(i)
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The issuance of the Shares and Warrants 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.
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(j)
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The application of the shareholder rights plan of the Company dated as of December 4, 2003 and as amended and restated on May 25, 2007 and January 16, 2008 (the "Rights Plan"), has been waived by the Board of Directors of the Company in connection with the Offering and the transactions contemplated herein with respect to the Amendment and Waiver (as defined herein) and the Amended and Restated Exchange Warrant (as defined herein) and will continue to ensure that the Rights Plan does not apply to any such transactions.
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(k)
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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.
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(l)
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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.
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(m)
|
The Company is not and, after giving effect to the offering and sale of the Securities 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.
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7.
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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 and Warrants to such Investor.
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8.
|
All covenants, agreements, representations and warranties herein will survive the execution of this Subscription Agreement, the delivery of the Shares and Warrants 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.
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9.
|
Concurrently with or prior to execution of this Subscription Agreement, the Company delivered to the Investor certified resolutions of the Board of Directors of the Company waiving the application of the Rights Plan to the Offering and the transactions contemplated herein with respect to the Amendment and Waiver (as defined herein) and the Amended and Restated Exchange Warrant (as defined herein).
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10.
|
On or prior to the Closing, the Company shall deliver or cause to be delivered to the Investor the following:
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|
|
(a)
|
this Subscription Agreement, a certificate representing the Warrants, 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 Amended and Restated Exchange Warrant (as defined below), in each case, duly executed by the Company; and
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(b)
|
the share certificate evidencing the Shares.
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11.
|
The obligation of the Investor hereunder to purchase the Shares and Warrants at the Closing is subject to the satisfaction, at or before the 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:
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|
|
(a)
|
The Company shall have delivered to the Investor the applicable deliverables set forth in Paragraph 10.
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|
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(b)
|
The Investor shall have received the opinion of Troutman Sanders LLP dated as of the Closing Date in form and substance satisfactory to the Investor and its legal counsel, acting reasonably and shall have received the opinion of Farris, Vaughan, Wills & Murphy LLP (or other counsel reasonably satisfactory to the Investor) dated as of the Closing Date covering the matters set forth on Exhibit B hereto.
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(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 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 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 11(e) through (g) inclusive.
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|
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(d)
|
Receipt by the Investor from the Company of a copy of resolutions adopted by its Board of Directors, certified to be true, accurate and complete, in full force and effect as of the Closing Date, approving the execution of this Subscription Agreement and the Warrants and the consummation of the transactions contemplated herein and therein and the waiver of the application of the Company's shareholders rights plan to the transactions contemplated herein including those specified in paragraph 13 hereof.
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|
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(e)
|
The Company shall have obtained all governmental or regulatory consents and approvals, if any, necessary for the sale of the Securities, including customary TSX and NYSE Amex share listing approval with respect to the Shares and the Warrant Shares.
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|
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(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 Securities and no order, ruling or determination having the effect of suspending the issuance or ceasing the trading of any of the Securities having been issued or made by any stock exchange, securities commission, court or other regulatory authority and be continuing in effect.
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(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 of the foregoing.
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12.
|
The obligation of the Company hereunder to issue and sell the Shares and Warrants to the Investor at the Closing is subject to the satisfaction, at or before the 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:
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|
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(a)
|
The Investor shall have duly executed and delivered to the Company this Subscription Agreement, the Registration Rights Agreement and the Amendment and Waiver.
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|
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(b)
|
The Investor shall have delivered to the Company the purchase price for the Shares and the Warrants being purchased by the Investor at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.
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|
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(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 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 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.
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|
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(d)
|
The offering, sale and issuance of the Securities by the Company shall not be prohibited by any law or governmental order or regulation.
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13.
|
The Company and the Investor acknowledge that the right of first refusal contained in paragraphs 11, 12 and 13 of the subscription agreement dated November 12, 2010 between the Company and Investor is in full force and effect, unamended, and shall continue in full force and effect until such time the Company and Investor, agree in writing, that such right of first refusal is amended or terminated. Notwithstanding any other provision of this Subscription Agreement, this Paragraph 13 shall survive the termination or completion of the Offering under this Subscription Agreement.
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14.
|
The Company and the Investor acknowledge that simultaneously with the execution of this Subscription Agreement, they will each execute and deliver (i) the Amendment and Waiver, pursuant to which the Company and the Investor will, among other things, (1) waive certain provisions of the Purchase Agreement, dated as of October 31, 2008, as amended (the “Purchase Agreement”) and (2) amend certain provisions of (A) the Company’s outstanding Floating Rate Secured Debentures held by the Investor and issued pursuant to the Purchase Agreement, and (B) warrants to purchase 3,000,000 Common Shares held by the Investor; and (ii) an Amended and Restated Exchange Warrant (the “Amended and Restated Exchange Warrant”) which is exercisable by the Investor for Common Shares of the Company in an amount equal to the principal amount of the Floating Rate Secured Debentures divided by US$1.50.
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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:
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|
If to the Company, to:
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PolyMet Mining Corp.
390 - 3600 Lysander Lane
Richmond, BC V7B 1C3
CANADA
Attention: Douglas J. Newby, Chief Financial Officer
Facsimile: (604) 248-0940
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with a copy to:
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|
Troutman Sanders LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attention: Henry I. Rothman, Esq.
Facsimile: (212)704-5950
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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.
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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 10 and 11, as the case may be, have not be satisfied or waived at or before the Closing or by the Investor if Closing has not occurred by February 29, 2012; provided, however, that no such termination will affect the right of any party to sue for any breach by the other party.
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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.
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Number of Shares
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13,333,333
|
||
|
Number of Warrants
|
2,600,000
|
||
|
Aggregate Purchase Price:
|
US$19,999,999.50
|
||
|
GLENCORE AG
|
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By:
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/s/ Daniel Maté
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Print Name:
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Daniel Maté
|
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Title:
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Officer
|
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By:
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/s/ Richard Marshall
|
|
Print Name:
|
Richard Marshall
|
|
Title:
|
Officer
|
|
Taxpayer Identification Number:
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|
Address:
|
Glencore AG
|
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Baarermattstrasse 3
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|
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CH-6341 Baar
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|
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Switzerland
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1.
|
Floating Rate Secured Debentures, in the aggregate principal amount of US$25,000,000, plus capitalized interest of approximately US$3,600,000, due the earlier to occur of (i) the date which is 10 business days after the date on which (1) the Subsidiary and/or the Company receive all permits required to commence construction of the Project in form and substance satisfactory to Glencore, acting reasonably, and (2) Senior Construction Financing (as defined in the Purchase Agreement) is made available to the Subsidiary and/or the Company, in form and substance satisfactory to Glencore, acting reasonably and (ii) September 30, 2014;
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2.
|
an Amended and Restated Exchange Warrant exercisable from time to time, to purchase the Company’s common shares in an amount equal to the principal amount of the outstanding Floating Rate Secured Debentures divided by US$1.50. Notwithstanding the foregoing, pursuant to an Amended and Restated Exchange Warrant, at the maturity date of the outstanding Floating Rate Secured Debentures, if (1) the Subsidiary and/or the Company have received all permits required to commence construction of the Project in form and substance satisfactory to the Investor, acting reasonably, and (2) Senior Construction Financing made available to the Subsidiary and/or the Company, in form and substance satisfactory to Glencore, acting reasonably, the Investor will transfer the outstanding Floating Rate Secured Debentures to the Company in exchange for the issuance by the Company to the Investor of fully paid and non-assessable Common Shares equal to the principal amount of the outstanding Floating Rate Secured Debentures plus accrued and unpaid interest thereon divided by US$1.50;
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3.
|
a warrant, exercisable from time to time, to purchase up to 3,000,000 Common Shares at US$1.50 per Common Share; and
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4.
|
a warrant, exercisable from time to time, to purchase up to 2,600,000 Common Shares at US$1.50 per Common Share.
|
|
By:
|
/s/ Douglas Newby | ||
| Name: Douglas Newby | |||
| Title: Chief Financial Officer | |||
|
Warrant Certificate No. - 2011-1
|
CERTIFICATE FOR 2,600,000 (Two Million Six Hundred Thousand) Common Share Purchase Warrants, each Common Share Purchase Warrant entitling the holder thereof to acquire one Common Share of PolyMet Mining Corp.
|
|
|
(a)
|
if and whenever at any time prior to the Warrant Expiry Date the Company shall:
|
|
|
(i)
|
subdivide, redivide or change its outstanding Common Shares into a greater number of shares;
|
|
|
(ii)
|
reduce, combine or consolidate its outstanding Common Shares into a smaller number of shares; or
|
|
|
(iii)
|
issue to all or substantially all of the holders of the Common Shares, by way of stock distribution, stock dividend or otherwise, Common Shares or securities convertible into Common Shares;
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|
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(b)
|
if and whenever at any time prior to the Warrant Expiry Date, there is a reclassification of the Common Shares or a capital reorganization of the Company other than as described in subsection 4(a) or a consolidation, amalgamation, merger or plan of arrangement of the Company with or into any other body corporate, trust, partnership or other entity, or a sale or conveyance of the property and assets of the Company as an entirety or substantially as an entirety to any other body corporate, trust, partnership or other entity (any such event being called a “Capital Reorganization”), any Warrantholder who has not exercised its right of acquisition under its Warrants prior to the effective date of such Capital Reorganization, upon the exercise of such right thereafter, shall be entitled to receive and shall accept, in lieu of the number of Common Shares such Warrantholder would otherwise be entitled to acquire, the number of shares and warrants or other securities or property of the Company or of the body corporate, trust, partnership or other entity resulting from such Capital Reorganization, or to which such sale or conveyance may be made, as the case may be, that such Warrantholder would have been entitled to receive on such Capital Reorganization, if, on the record date or the effective date thereof, as the case may be, the Warrantholder had been the registered holder of the number of Common Shares sought to be acquired by it. If necessary, appropriate adjustments shall be made in the application of the provisions set forth in this Section 4 with respect to the rights and interests thereafter of the holder of this Warrant certificate to the end that the provisions set forth in this Section 4 shall thereafter correspondingly be made applicable as nearly as may be reasonable in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Warrants evidenced hereby;
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|
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(c)
|
if and whenever at any time prior to the Warrant Expiry Date, the Company shall issue rights, options or warrants to all or substantially all the holders of the Common Shares pursuant to which those holders are entitled to subscribe for, purchase or otherwise acquire Common Shares, Participating Shares or Convertible Securities within a period of 45 days from the date of issue thereof at a price, or at a conversion price, of less than 95% of the Current Market Price at the record date for such distribution (any such issuance being herein called a “Rights Offering” and Common Shares, Convertible Securities or Participating Shares that may be acquired in exercise of the Rights Offering or upon conversion of the Convertible Securities offered by the Rights Offering being herein called the “Offered Shares”), the Exchange Number shall be adjusted effective immediately after the record date at which holders of Common Shares are determined for the purposes of the Rights Offering to an Exchange Number that is the product of (1) the Exchange Number in effect on the record date and (2) a fraction (a) the numerator of which shall be the sum of (i) the number of Common Shares or Participating Shares outstanding on the record date plus (ii) the number of Offered Shares offered pursuant to the Rights Offering or the maximum number of Offered Shares into which the Convertible Securities so offered pursuant to the Rights Offering may be converted, as the case may be; and (b) the denominator of which shall be the sum of (i) the number of Common Shares outstanding on the record date for the Rights Offering; and (ii) the number arrived at when (A) either the product of (1) the number of Offered Shares so offered and (2) the price at which those Common Shares are offered, or the product of (3) the conversion price thereof and (4) the maximum number of Offered Shares for or into which the Convertible Securities so offered pursuant to the Rights Offering may be converted, as the case may be, is divided by (B) the Current Market Price of the Common Shares on the record date.
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|
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(d)
|
if and whenever at any time from the Closing Date and prior to the Warrant Expiry Date, the Company shall issue or distribute to all or substantially all the holders of the Common Shares (i) shares of any class other than Common Shares, or (ii) rights, options or warrants other than rights, options or warrants exercisable within 45 days from the date of issue thereof at a price, or at a conversion price, of at least 95% of the Current Market Price at the record date for such distribution, or (iii) evidences of indebtedness, or (iv) any other assets (excluding cash dividends paid in the ordinary course) and that issuance or distribution does not constitute a Share Reorganization or a Rights Offering (any of those events being herein called a “Special Distribution”), the Exchange Number shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for purposes of the Special Distribution to an Exchange Number that is the product of (1) the Exchange Number in effect on the record date and (2) a fraction (a) the numerator of which shall be the product of (i) the sum of the number of Common Shares outstanding on the record date plus the number of Common Shares which the Warrantholders would be entitled to receive upon exercise of all their outstanding Warrants if they were exercised on the record date and (ii) the Current Market Price thereof on that date; and (b) the denominator of which shall be the product of (A) the sum of the number of Common Shares outstanding on the record date plus the number of Common Shares which the Warrantholders would be entitled to receive upon exercise of all their outstanding Warrants if they were exercised on the record date and (B) the Current Market Price thereof on that date; less, the aggregate fair market value, as determined by the directors, whose determination shall, absent manifest error, be conclusive, of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution.
|
|
|
(e)
|
the adjustments provided for in this Section 4 in the number of Common Shares and classes of securities which are to be received on the exercise of Warrants are cumulative and shall apply to successive issues, subdivisions, combinations, consolidations, distributions and any other events that would require an adjustment of the Exchange Number or the number kind securities issuable hereunder;
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|
|
(f)
|
if and whenever at any time from the Closing Date and prior to the Warrant Expiry Date, the Company shall reclassify or otherwise change the outstanding Common Shares, the exercise right shall be adjusted effective immediately upon the reclassification becoming effective so that holders of Warrants who exercise their rights thereafter shall be entitled to receive Common Shares as they would have received had the Warrants been exercised immediately prior to the effective date, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 4;
|
|
|
(g)
|
any adjustment of the Exchange Number as set forth herein shall also include a corresponding adjustment to the Purchase Price which shall be calculated by multiplying the Purchase Price by a fraction: (i) the numerator of which shall be the Exchange Number prior to the adjustment, and (ii) the denominator of which shall be the Exchange Number after the adjustment. No adjustment in the Purchase Price shall be required unless the cumulative effect of such adjustment or adjustments would change the Purchase Price by at least 1% of the prevailing Purchase Price provided, however, that any adjustments which, except for the provisions of this subsection would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;
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|
|
(h)
|
notwithstanding the foregoing, no adjustment will be made in respect of an event described in paragraph 4(a)(iii) or subsections 4(b) or 4(d) if the Warrantholders are entitled to participate in the event on the same terms, mutatis mutandis, as if they had exercised their Warrants immediately before the effective date of or record date for the event, such participation being subject to the prior written consent of any stock exchange upon which the Common Shares are listed for trading;
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|
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(i)
|
in the event of any question arising with respect to the adjustments provided in this Section 4, such question shall conclusively be determined by a firm of chartered accountants appointed by the Company and acceptable to the holder (who may be the Company’s auditors). Such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company and the holder;
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(j)
|
as a condition precedent to the taking of any action which would require an adjustment in any of the acquisition rights pursuant to any of the Warrants, including the number of Common Shares which are to be received upon the exercise thereof, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company or a successor corporation has unissued and reserved in its authorized capital and may validly and legally issue as fully paid and non-assessable all the shares which the holders of such Warrants issued by it are entitled to receive on the full exercise thereof in accordance with the provisions hereof;
|
|
|
(k)
|
at least 21 days before the effective date of or record date for any event referred to in Section 4, that requires or might require an adjustment in the subscription rights pursuant to a Warrant, including the Purchase Price and the number of Common Shares purchasable on exercise of a Warrant, the Company will give notice to the Warrantholders of the particulars of the event and, to the extent, determinable, any adjustment required. If it is not reasonably practicable for the Company to give 21 days notice as aforesaid, the Company will give as much notice as is reasonably practicable in the circumstances;
|
|
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(l)
|
the Company covenants with the holder that it will not close its transfer books or take any other corporate action which might deprive the holder of the opportunity to exercise its right of acquisition pursuant thereto during the period of 21 days after the giving of the notice set forth in subsection 4(k);
|
|
|
(m)
|
the Company covenants with the holder that so long as any Warrants remain outstanding and may be exercised:
|
|
|
(i)
|
it will use commercially reasonable efforts to cause the Common Shares issuable on exercise of the Warrants to be listed on the Toronto Stock Exchange (the “TSX”) and the New York Stock Exchange Amex (the “NYSE Amex”); it will reserve and keep available, out of its authorized and unissued Common Shares, a sufficient number of Common Shares free of pre-emptive rights for the purpose of enabling it to satisfy its obligations to issue Common Shares upon the exercise of the Warrants;
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|
|
(ii)
|
it will cause the Common Shares and the certificates representing the Common Shares subscribed for pursuant to the exercise of the Warrants to be duly issued and delivered in accordance with the provisions hereof;
|
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|
(iii)
|
all Common Shares which shall be issued upon exercise in the manner provided for herein, shall be fully paid and non-assessable;
|
|
|
(iv)
|
it will use commercially reasonable efforts to maintain its status as a reporting issuer not in default in the Provinces of Canada in which it currently is a reporting issuer and to maintain the listing of the Common Shares on the TSX and NYSE Amex; and
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(v)
|
it will well and truly perform and carry out all of the acts or things to be done by it as provided under provisions hereof;
|
|
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(n)
|
if and whenever at any time prior to the Warrant Expiry Time, the Company shall take any action affecting or relating to the Common Shares, other than any action described in this Section, which in the reasonable opinion of the directors of the Company would prejudicially affect the rights of any holders of Warrants, the Exchange Number and, if required, the Purchase Price will be adjusted by the directors of the Company in such manner, if any, and at such time, as the directors of the Company, may in their sole discretion, subject to the approval of any stock exchange(s) on which the Common Shares are listed and posted for trading, reasonably determine to be equitable in the circumstances to such holders; and
|
|
|
(o)
|
for the purpose of this Section 4: (i) “Participating Share” means a share (other than a Common Share) that carries the right to participate in earnings to an unlimited degree; and (ii) “Convertible Security” means a security convertible into or exchangeable for a Common Share or a Participating Share or both.
|
|
|
(a)
|
the Current Market Price (as defined herein) of the Common Shares is equal to or greater than 150% of the Purchase Price; and
|
|
|
(b)
|
the Company or Poly Met Mining Inc. has:
|
|
|
(i)
|
Senior Construction Financing (as defined in the purchase agreement between the Company, Poly Met Mining Inc. and Glencore A.G. dated October 31, 2008, as amended from time to time) made available for the development of the NorthMet mine and Erie Plant facilities in St. Louis County, Minnesota, USA (the “Project”) in form and substance satisfactory to the Warrantholder, acting reasonably; and
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|
|
(ii)
|
obtained all necessary permits, in form and substance satisfactory to the Warrantholder, acting reasonably, required to commence construction of the Project.
|
|
|
(a)
|
on the TSX;
|
|
|
(b)
|
if the Common Shares are not listed on the TSX, on any stock exchange upon which the Common Shares are listed as may be selected for this purpose by the Company’s directors, acting reasonably; or
|
|
|
(c)
|
if the Common Shares are not listed on any stock exchange, on any over-the-counter market;
|
|
|
(a)
|
Certificates representing Common Shares issued in the United States or to or for the account or benefit of a U.S. Person or person in the United States upon exercise of Warrants and all certificates issued in. exchange thereof or in substitution therefor, until such time as it is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state laws and regulations, shall bear the following legend:
|
|
|
(b)
|
Notwithstanding the foregoing, the Company’s transfer agent may impose additional requirements for the removal of legends from securities sold in compliance with Rule 904 of Regulation S in the future; and
|
|
|
(c)
|
Any share certificates issued pursuant to an exercise of these Warrants prior to April 7, 2012 shall bear the following legend:
|
|
|
(a)
|
The headings in this certificate are for reference only and do not constitute terms of the certificate.
|
|
|
(b)
|
Whenever the singular or masculine is used in this certificate the same shall be deemed to include the plural or the feminine or the body corporate as the context may require.
|
|
|
(c)
|
No Common Shares will be issued pursuant to the exercise of any Warrant if the issue of such Common Shares would constitute a violation of the securities laws of any applicable jurisdiction.
|
|
|
(d)
|
If this certificate becomes stolen, lost, mutilated or destroyed, the Company shall, on such terms as it may in its discretion acting reasonably impose, issue and deliver to the holder a new certificate of like denomination, tenor and date as the certificate so stolen, lost, mutilated or destroyed.
|
|
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(e)
|
Except as expressly set out herein, the holding of this certificate or the Warrants represented hereby shall not constitute a holder hereof a holder of Common Shares nor entitle it to any right of interest in respect thereof.
|
|
|
(f)
|
This certificate shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
|
|
|
(g)
|
This certificate shall be subject to, governed by and construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada.
|
|
|
(h)
|
Unless otherwise specified, all references herein to monetary amounts are references to lawful money of Canada.
|
|
|
(i)
|
Any notice which the Company is required to give to the holder hereunder shall be deemed to be properly given if sent by ordinary prepaid mail to the address for the holder shown on the holder’s subscription agreement (unless the holder subsequently notifies the Company of a change of such address), and such notice will be deemed to be given at the time of mailing.
|
|
POLYMET MINING CORP.
|
|
|
By:
|
/s/ Douglas Newby
|
|
Authorized Signatory
|
|
|
1.
|
The undersigned holder of the Warrant certificate hereby subscribes for common shares (“Common Shares”) of the Company (or such number of Common Shares or other securities or property to which such subscription entitles him or her in lieu thereof or in addition thereto under the provisions of the attached Warrant certificate) at the price determined under, and on the terms specified in, the Warrant certificate and encloses herewith a bank draft, certified cheque or money order payable to or to the order of the Company in payment therefor.
|
|
Name(s) in Full
|
Address(es)*
(Include Postal Code)
|
Number(s) of Common Shares
|
||
|
A.
|
¨
|
It (i) at the time of exercise of this Warrant is not in the United States; (ii) is not a “U.S. person”, as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and is not exercising this Warrant on behalf of a “U.S. person” or a person in the United States; and (iii) did not execute or deliver this Exercise Form in the United States.
|
|
|
B.
|
¨
|
It is tendering with this exercise form an opinion of counsel reasonably satisfactory to the Company to the effect that the exercise is pursuant to an effective registration statement under the U.S. Securities Act or that an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available.
|
|
Signature Guaranteed by:
|
Signature of Warrant holder*
|
|
|
|
||
|
Name of Warrant holder
|
||
|
Address of Warrant holder (include postal code)
|
|
¨
|
Please check box if the Common Share certificates are to be delivered at the office where this Warrant certificate is surrendered, failing which the certificates will be mailed.
|
|
1.
|
The registered holder may exercise its right to receive Common Shares by completing this form and surrendering this form and the Warrant certificate representing the Warrants being exercised to the Company at its principal office in Vancouver, British Columbia. Certificates for Common Shares will be delivered or mailed within five (5) business days after the exercise of the Warrants.
|
|
1.
|
acknowledges that the sale of the securities of PolyMet Mining Corp. (“PolyMet”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and
|
|
|
(a)
|
the undersigned is not an “affiliate” of PolyMet (as that term is defined in Rule 405 under the U.S. Securities Act);
|
|
|
(b)
|
the offer of such securities was not made to a person in the United States and either (i) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (ii) the transaction was executed on or through the facilities of the Toronto Stock Exchange, and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States;
|
|
|
(c)
|
neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any “directed selling efforts” (as that term is defined in Regulation S under the U.S. Securities Act) in the United States in connection with the offer and sale of such securities;
|
|
|
(d)
|
the sale is bona fide and not for the purpose of “washing off’ the resale restrictions imposed because the securities are “restricted securities” (as that term is defined in Rule 144(a)(3) under the U.S. Securities Act);
|
|
|
(e)
|
the seller does not intend to replace such securities sold in reliance on Rule 904 of Regulation S with fungible unrestricted securities; and
|
|
|
(f)
|
the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration requirements of the U.S. Securities Act.
|
|
By:
|
|
|
|
|
|
Name:
|
|
|
Title:
|
|
1.
|
Definitions
|
|
2.
|
Amendment to the Outstanding Debentures
|
|
3.
|
Amendment to the 2010 Warrant
|
|
|
(a)
|
the "Purchase Price" of the 2010 Warrant will be reduced to US$1.50 per Common Share; and
|
|
|
(b)
|
the following will be added as a new clause 2A to the 2010 Warrant:
|
|
4.
|
Waiver of Certain Defaults
|
|
5.
|
Effectiveness
|
|
6.
|
Representations and Warranties of the Company
|
|
|
(a)
|
Each of the Company and the Issuer hereby confirms the representations and warranties in the Purchase Agreement are true and accurate as if the representation and warranty was given as of the date hereof and makes the following additional representations and warranties to the Purchaser:
|
|
|
(i)
|
Authorization; Enforcement. Each of the Company and the Issuer has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the Issuer and the consummation by the Company and the Issuer of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and the Issuer and no further action is required by the Company and the Issuer, their boards of directors or their shareholders in connection herewith. This Agreement has been duly executed by the Company and the Issuer and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company and the Issuer enforceable against the Company and the Issuer in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
|
|
|
(b)
|
The Purchaser hereby makes the following representations and warranties to the Company and the Issuer:
|
|
|
(i)
|
Authorization; Enforcement. The Purchaser has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Purchaser and no further action is required by the Purchaser, its board of directors or its shareholders in connection herewith. This Agreement has been duly executed by the Purchaser and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
|
|
7.
|
Effect on Agreements
|
|
8.
|
Return of Debentures
|
|
9.
|
Filing of Form 6-K
|
|
10.
|
Amendments and Waivers
|
|
11.
|
Notices
|
|
12.
|
Successors and Assigns
|
|
13.
|
Execution and Counterparts
|
|
14.
|
Expenses
|
|
15.
|
Further Assurances
|
|
16.
|
Governing Law
|
|
17.
|
Severability
|
|
18.
|
Headings
|
|
POLYMET MINING CORP.
|
||
|
By:
|
/s/ Douglas Newby
|
|
|
Name: Douglas Newby
Title: Chief Financial Officer
|
||
|
POLY MET MINING, INC.
|
||
|
By:
|
/s/ Douglas Newby
|
|
|
Name: Douglas Newby
Title: Chief Financial Officer
|
||
|
GLENCORE AG
|
||
|
By:
|
/s/ Daniel Maté
|
|
|
Name: Daniel Maté
Title: Officer
|
||
|
By:
|
/s/ Richard Marshall
|
|
|
Name: Richard Marshall
Title: Officer
|
||
|
1.
|
Definitions
|
|
|
(a)
|
if at any time during the Relevant Period the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex-any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement), then:
|
|
|
(i)
|
if the Common Shares to be issued do not rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of that Dividend (or entitlement) per Common Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of Canada); or
|
|
|
(ii)
|
if the Common Shares to be issued do rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex-any other entitlement) shall for the purpose of this definition be deemed to have been the amount thereof increased by such similar amount; and
|
|
|
(b)
|
if on each of the twenty (20) Exchange Business Days during the Relevant Period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement) in respect of a Dividend (or entitlement) which has been declared or announced but the Common Shares to be issued do not rank for that Dividend (or entitlement) the Volume Weighted Average Price on each of such dates shall for the purposes of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of that Dividend (or entitlement) per Common Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of Canada); and
|
|
|
(c)
|
if the Volume Weighted Average Price is not available on each of the twenty (20) Exchange Business Days during the Relevant Period, then the arithmetic average of the Volume Weighted Average Prices which are available in the Relevant Period shall be used (subject to the Volume Weighted Average Price being available on at least ten (10) such Exchange Business Days); and
|
|
|
(d)
|
if the Volume Weighted Average Price is not available on at least ten (10) Exchange Business Days in the Relevant Period, then the Current Market Price shall be Determined by an Expert.
|
|
|
(a)
|
including a Dividend in Shares;
|
|
|
(b)
|
excluding a Bonus Issue;
|
|
|
(c)
|
including a purchase or redemption of Common Shares as described in Section 12(a)(i) (Dividends - Share Repurchases); and
|
|
|
(d)
|
including any other issue of shares or other securities credited as fully or partly paid by way of capitalization of profits or reserves.
|
|
|
(a)
|
with respect to a cash Dividend or other cash amount the amount of such cash; and
|
|
|
(b)
|
with respect to any other property on any date, the fair market value of that property,
|
|
|
(c)
|
where options, warrants or other rights are publicly traded in a market, the fair market value of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights during the period of five (5) trading days on the relevant market commencing on such date (or, if later, the first such trading day such options, warrants or other rights are publicly traded) or such shorter period as such options, warrants or other rights are publicly traded;
|
|
|
(d)
|
any cash Dividend declared or paid in a currency other than U.S. dollars shall be converted into U.S. dollars at the rate of exchange used to determine the amount payable to Shareholders who were paid or are to be paid the cash Dividend in U.S. dollars; and
|
|
|
(e)
|
any other amount or value in a currency other than U.S. dollars shall be converted into U.S. dollars at the Screen Rate on that date.
|
|
|
(a)
|
carry a right to subscribe for, purchase or otherwise acquire Common Shares or any securities which by their terms of issue might be redesignated as Common Shares; or
|
|
|
(b)
|
are capable of being redesignated as Common Shares or redesignated so as to carry a right to subscribe for, purchase or otherwise acquire Common Shares.
|
|
|
(a)
|
if on any such Exchange Business Day such price is not available or cannot otherwise be determined as provided above, the Volume Weighted Average Price of a Common Share in respect of such Exchange Business Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding Exchange Business Day on which the same can be so determined; and
|
|
|
(b)
|
if any Dividend or other entitlement in respect of the Common Shares is announced on or prior to the relevant Exercise Date in circumstances where the Record Date in respect of such Dividend or other entitlement shall be on or after the relevant Exercise Date and if on any such Exchange Business Day the price as determined as provided above is based on a price ex-Dividend or ex-any other entitlement, then such price shall be increased by an amount equal to the Fair Market Value of any such Dividend or other cash entitlement as at the date of announcement of such Dividend or entitlement per Share.
|
|
2.
|
Interpretation
|
|
|
(a)
|
a word importing the masculine, feminine or neuter gender also includes members of the other genders;
|
|
|
(b)
|
a word defined in or importing the singular number has the same meaning when used in the plural number, and vice versa;
|
|
|
(c)
|
a word importing persons shall include partnerships and corporations;
|
|
|
(d)
|
the headings to each section are inserted for convenience of reference only and do not form part of this Warrant;
|
|
|
(e)
|
all dollar amounts shall be in dollars of the United States of America unless otherwise specified; and
|
|
|
(f)
|
"including" means "including without limitation".
|
|
3.
|
Registration
|
|
4.
|
Transfers
|
|
5.
|
Exercise of Warrant
|
|
|
(a)
|
Exercise of Warrant. Subject to the provisions hereof and subject to the receipt of the necessary approvals under the Hart-Scott-Rodino Act and other applicable approvals, the Warrantholder may exercise this Warrant in whole or in part at any time and from time to time up to 11:59 P.M., Eastern time, on the Expiration Date upon surrender of the Warrant, together with delivery of the duly executed Warrant exercise form attached hereto as Exhibit A (the "Exercise Agreement") accompanied by the original of the Debentures to the Company during normal business hours on any Business Day at the Company's principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), and upon payment to the Company by Debt Assignment (as hereinafter defined) of the Exercise Price for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued to the holder hereof or such holder's designee, as the record owner of such shares, as of the close of business on the date on which the duly executed Exercise Agreement shall have been delivered to the Company (or such later date as may be specified in the Exercise Agreement). Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the holder hereof within a reasonable time, not exceeding three (3) Business Days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such denominations as may be requested by the holder hereof and shall be registered in the name of such holder or such other name as shall be designated by such holder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall (subject to Section 5(e) below), at its expense, at the time of delivery of such certificates, deliver to the holder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised. In lieu of delivering physical certificates representing the Common Shares issuable upon exercise of this Warrant, provided the Company's Transfer Agent is participating in the Depository Trust Company ("DTC") Deposit/Withdrawal at Custodian ("DWAC") system, upon request of the Warrantholder, the Company shall use commercially reasonable efforts to cause its Transfer Agent to electronically transmit such shares issuable upon exercise to the Warrantholder (or its designee), by crediting the account of the Warrantholder's (or such designee's) prime broker with DTC through its DWAC system (provided that the same time periods herein as for stock certificates shall apply).
|
|
|
(b)
|
The Warrantholder may exercise this Warrant for a number of Common Shares less than the maximum number the Warrant Holder is entitled to purchase pursuant to this Warrant. In the event of a purchase of a number of Common Shares less than the maximum number which may be purchased pursuant to the Warrant, the Warrantholder shall be entitled to receive, without charge except as aforesaid, a new Warrant in respect of the balance of the Common Shares which such holder was entitled to purchase pursuant to this Warrant and which was not then purchased.
|
|
|
(c)
|
Mandatory Exercise of Warrant. Notwithstanding the first paragraph hereof and subject to the receipt of the necessary approvals (including without limitation, any expiration or early termination of any applicable waiting periods) under the Hart-Scott-Rodino Act and other applicable regulatory approvals, if the Issuer and/or the Company receive all permits required to commence construction of the NorthMet Project in form and substance satisfactory to the Warrantholder, acting reasonably, and Senior Construction Financing is made available to the Issuer and/or the Company (the "Threshold Period"), in form and substance satisfactory to the Warrantholder, acting reasonably, the Company may, provided the Warrantholder has provided consent that the conditions have been met, such consent not to be unreasonably withheld, within 10 Business Days after the end of any such Threshold Period, deliver a written notice to the Warrantholder to require the Warrantholder to exercise this Warrant for all but not less than all of the Warrant Shares. Upon receipt of written notice (i) the Warrantholder shall be deemed to have exercised the Warrant, subscribed for all but not less than all the Warrant Shares and this Warrant shall immediately be cancelled; (ii) the Company and the Warrantholder shall execute the Debt Assignment Agreement in the form attached hereto as Exhibit B and the Debentures shall be automatically transferred to the Company in payment for the Warrant Shares and the Debentures shall be of no further force and effect and no further interest shall be payable on the Debentures and the Debentures will be returned to the Company in accordance with the Amendment and Waiver and (iii) the Warrant Shares shall be issued by the Company to the Warrantholder.
|
|
|
(d)
|
Expiration. After 11:59 P.M., Eastern time, on the Expiration Date, all rights under this Warrant in respect of which the right of subscription and purchase of Common Shares herein provided for shall not theretofore have been exercised shall wholly cease and terminate and this Warrant shall be void and of no effect.
|
|
|
(e)
|
Debt Assignment. Payment of the Exercise Price for the Warrant Shares specified in the Exercise Agreement shall be paid by way of assignment by the Warrantholder to the Company of such Principal Amount of the Debentures as is equal to the Exercise Price (the "Debt Assignment"). In order to effect such Debt Assignment, the Warrantholder shall deliver concurrently with the Exercise Agreement a duly executed debt assignment agreement in the form attached hereto as Exhibit B (the "Debt Assignment Agreement") together with the original of the Debentures, which Debt Assignment Agreement the Company shall countersign and return a signed copy thereof to the Warrantholder within a reasonable time, not exceeding three (3) Business Days, after this Warrant shall have been so exercised. Notwithstanding anything contained in this Warrant, the Warrantholder shall not be entitled to exercise this Warrant and purchase Common Shares for more than the Principal Amount outstanding on the applicable Exercise Date.
|
|
|
(f)
|
Book-Entry. Notwithstanding anything to the contrary set forth herein, upon exercise of any portion of this Warrant in accordance with the terms hereof, the Warrantholder shall not be required to physically surrender this Warrant to the Company unless such holder is purchasing the full amount of Warrant Shares represented by this Warrant. The Warrantholder and the Company shall maintain records showing the number of Warrant Shares so purchased hereunder and the dates of such purchases or shall use such other method, reasonably satisfactory to the Warrantholder and the Company, so as not to require physical surrender of this Warrant upon each such exercise. The Warrantholder and any assignee, by acceptance of this Warrant or a new Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following exercise of any portion of this Warrant, the number of Warrant Shares which may be purchased upon exercise of this Warrant may be less than the number of Warrant Shares set forth on the face hereof.
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6.
|
Compliance with the 1933 Act
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7.
|
Payment of Taxes
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|
8.
|
Mutilated or Missing Warrants
|
|
9.
|
Representation and Warranty
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|
10.
|
Covenants
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|
|
(a)
|
the Company shall at all applicable times keep reserved, out of its authorized and unissued Common Shares, 125% of the number of shares sufficient to provide for the exercise of the rights of purchase represented by the Warrant in full, and the transfer agent for the Common Shares, including every subsequent transfer agent for the Common Shares or other shares of the Company's capital stock issuable upon the exercise of any of the rights of purchase aforesaid ("Transfer Agent"), shall be irrevocably authorized and directed at all times to reserve such number of authorized and unissued Common Shares as shall be requisite for such purpose;
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(b)
|
all Warrant Shares issued upon exercise of the Warrant in accordance with its terms shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable Common Shares;
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(c)
|
the Company shall keep a conformed copy of this Warrant on file with its Transfer Agent, and shall supply from time to time the Transfer Agent with duly executed stock certificates required to honor the outstanding Warrant;
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(d)
|
the Company shall and shall cause the Issuer to do, or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, and obtain, preserve, renew and keep in full force and effect any and all material permits and licenses;
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(e)
|
the Company shall maintain its status as a reporting issuer not in default in each of the provinces and territories of Canada pursuant to the Canadian Securities Laws and maintain a listing of the Common Shares on the TSX and NYSE AMEX and have the Common Shares issued pursuant to the exercise of the Warrants listed and posted for trading on the TSX and NYSE AMEX;
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(f)
|
the Company shall ensure, if required, that the share certificates representing the Warrant Shares carry a resale legend in the form prescribed by applicable Canadian Securities Laws; and
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(g)
|
the Company shall give notice to the Warrantholder of its intention to fix a record date for any event referred to in Section 12 which may give rise to an adjustment in the Exercise Price, and, in each case, such notice shall specify the particulars of such event, the record date and the effective date for such event. Such notice shall be given not less than ten (10) Business Days in each case prior to such applicable record date.
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11.
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Exercise Price
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12.
|
Adjustments
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(a)
|
Dividends:
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(i)
|
Share Repurchases: A purchase or redemption of Common Shares by the Company on any day at an average price on that day which exceeds the Share Repurchase Threshold will constitute a Dividend, and the amount of such Dividend per Common Share will be such excess. On any day, the "Share Repurchase Threshold" means the Current Market Price of the Common Shares either (1) on that date, or (2) where an announcement (excluding for the avoidance of doubt, general authority for such purchases given by a shareholders meeting of the Company or any notice convening such meeting) has been made of the intention to purchase Common Shares at some future date at a specified price, on the Business Day immediately preceding the date of such announcement.
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(ii)
|
Adjustment Event: If and whenever the Company shall distribute any Dividend to the Shareholders, the Exercise Price shall be subject to adjustment in accordance with this Section 12(a).
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(iii)
|
Effective Date: For the purposes of this Section 12(a), the "Effective Date" means the date on which the relevant Dividend is actually distributed.
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(iv)
|
Adjustment to the Exercise Price: If and whenever the Company shall distribute any Dividend to the Shareholders, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in force immediately prior to the Effective Date by the following fraction:
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(v)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(a) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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(b)
|
Bonus Issues:
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|
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(i)
|
Adjustment Event: If and whenever the Company shall make any Bonus Issue, the Exercise Price shall be subject to adjustment in accordance with this 12(b).
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(ii)
|
Effective Date: For the purposes of this 12(b), the "Effective Date" means the date of issue of the relevant Common Shares.
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(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
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|
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(iv)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(b) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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(c)
|
Consolidation or Subdivision:
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|
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(i)
|
Adjustment Event: If and whenever there shall be any consolidation or subdivision of the Common Shares, the Exercise Price shall be subject to adjustment in accordance with this Section 12(c).
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(ii)
|
Effective Date: For the purposes of this Section 12(c), the "Effective Date" means the date on which such subdivision or consolidation becomes effective.
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|
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(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
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|
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(iv)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(c) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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|
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(d)
|
Common Shares, Securities Rights and Share-Related Securities Issued to Shareholders:
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|
|
(i)
|
Adjustment Event: If and whenever the Company shall issue, grant or offer Common Shares, Share-Related Securities, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities to all or substantially all of the Shareholders as a class by way of rights as a result of which, in each case, Shareholders have the right to acquire Common Shares at a Consideration per Common Share which is less than 100%, of the Current Market Price of the Common Shares on the Exchange Business Day immediately preceding the date of the first public announcement of such issue, grant or offer, the Exercise Price shall be subject to adjustment in accordance with this Section 12(d).
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|
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(ii)
|
Effective Date: For the purposes of this Section 12(d), the "Effective Date" means the first date on which the Common Shares are traded ex-rights, ex-warrants or ex-options on the Principal Market.
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|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
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|
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(iv)
|
Formula: If on the date (for purposes of this Section 12(d), the "Specified Date") of issue, grant or offer of the relevant Share-Related Securities, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities to all or substantially all of the Shareholders as a class by way of rights the maximum number of Common Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Share-Related Securities or Securities Rights is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Section 12(d), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date; provided, however, that if such Share-Related Securities or Securities Rights expire or are canceled prior to the subsequent full exercise of this Warrant, the Aggregate Consideration for the related Common Shares shall not include the exercise, exchange or conversion price of such expired or canceled Share-Related Securities or Securities Rights.
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(v)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(d) shall apply, with effect from and including the Effective Date, where the Exercise Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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(e)
|
Issue of Other Securities to Shareholders:
|
|
|
(i)
|
Adjustment Event: If and whenever the Company shall issue any securities (other than Common Shares, Share-Related Securities, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities) to all or substantially all of the Shareholders as a class by way of rights or the Company shall issue or grant any Securities Rights in respect of any securities (other than Common Shares, Share-Related Securities, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities) or assets to all or substantially all of the Shareholders as a class, the Exercise Price shall be subject to adjustment in accordance with this Section 12(e).
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|
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(ii)
|
Effective Date: For the purposes of this Section 12(e), "Effective Date" means the first date on which the Common Shares are traded ex-rights, ex-warrants or ex-options on the Principal Exchange.
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|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
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|
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(iv)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(e) shall apply, with effect from and including the Effective Date, where the Exercise Date has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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|
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(f)
|
Issues of Common Shares at Below Current Market Price:
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|
|
(i)
|
Adjustment Event: If and whenever the Company shall issue, wholly for cash, any Common Shares or the Company shall issue or grant, wholly for cash or for no consideration, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities as a result of which, in each case, persons to whom the Common Shares or Securities Rights are issued or granted have the right to acquire Common Shares at a Consideration per Common Share which is less than 100%, of the Current Market Price of the Common Shares on the Exchange Business Day immediately preceding the date of the first public announcement of such issue or grant, the Exercise Price shall be subject to adjustment in accordance with this Section 12(f). However, if any such issue or grant also falls within the terms of Section 12(d) or constitutes an issue of Common Shares consequent upon the exercise of Exchange Securities Rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Common Shares, the Exercise Price shall not be subject to adjustment in accordance with this Section 12(f).
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|
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(ii)
|
Effective Date: For the purposes of this Section 12(f), the "Effective Date" means the date of issue of such Common Shares or, as the case may be, the issue or grant of such Securities Rights.
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|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
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|
|
(iv)
|
Formula: If on the date (for purposes of this Section 12(f), the "Specified Date") of issue or grant of the relevant Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities the maximum number of Common Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares and, if applicable, Share-Related Securities pursuant to the terms of such Securities Rights and, if applicable, Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Section 12(f), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.
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|
|
(v)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(f) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
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|
|
(g)
|
Share-Related Securities Issued Other than to Shareholders:
|
|
|
(i)
|
Adjustment Event: If and whenever the Company or (pursuant to arrangements with the Company) any other person or entity shall issue, wholly for cash or for no consideration, any Share-Related Securities or shall grant to any existing securities so issued such rights as to make such securities Share-Related Securities as a result of which, in each case, persons to whom the Share-Related Securities or such rights are issued or granted have the right to acquire Common Shares at a Consideration per Common Share which is less than 100%, of the Current Market Price of the Common Shares on the Exchange Business Day immediately preceding the date of the first public announcement of the terms of issue of such Share-Related Securities or the terms of such grant, the Exercise Price shall be subject to adjustment in accordance with this Section 12(g). However, if any such issue or grant also falls within the terms of Section 12(d) (Common Shares, Securities Rights and Share-Related Securities Issued to Shareholders), Section 12(e) (Issue of Other Securities to Shareholders) or Section 12(f) (Issues of Common Shares at Below Current Market Price), the Exercise Price shall not be subject to adjustment in accordance with this Section 12(g).
|
|
|
(ii)
|
Effective Date: For the purposes of this Section 12(g) the "Effective Date" means the date of issue of the Share-Related Securities or the grant of the relevant rights.
|
|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
|
|
|
(iv)
|
Formula: If on the date (for purposes of this Section 12(g), the "Specified Date") of issue of the relevant Share-Related Securities or date of grant of such rights the maximum number of Common Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Section 12(g)(iv), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.
|
|
|
(v)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this 12(f)(v) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
|
|
|
(h)
|
Amendment of Terms of Securities Rights or Share-Related Securities:
|
|
|
(i)
|
Adjustment Event: If and whenever the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of any Securities Rights or Share-Related Securities are amended (other than in accordance with their terms of issue (including terms as to adjustment of such rights)) so that following such amendment the Consideration per Common Share is (1) reduced and (2) less than 100%, of the Current Market Price of the Common Shares on the Exchange Business Day immediately preceding the date of the first public announcement of the proposals for such amendment, the Exercise Price shall be subject to adjustment in accordance with this Section 12(h).
|
|
|
(ii)
|
Effective Date: For the purposes of this Section 12(h), "Effective Date" means the date of amendment of such rights.
|
|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
|
|
|
(iv)
|
Formula: If on the date (for purposes of this Section 12(h), the "Specified Date") of such amendment the maximum number of Common Shares which could be issued upon exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Securities Rights or Share-Related Securities is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time then, for the purposes of this Section 12(h), "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Specified Date and as if such subscription, purchase or acquisition had taken place on the Specified Date.
|
|
|
(v)
|
Effect of Adjustment: The Exercise Price as adjusted pursuant to this Section 12(h) shall apply, with effect from and including the Effective Date, where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date. Any such adjustment shall be subject to any subsequent adjustment pursuant to the provisions of this Warrant.
|
|
|
(i)
|
Other Arrangements to Acquire Securities:
|
|
|
(i)
|
Adjustment Event: If and whenever the Company or (pursuant to arrangements with the Company) any other person or entity shall offer any securities in connection with which offer Shareholders as a class are entitled to participate in arrangements whereby such securities may be acquired by them, the Exercise Price shall be subject to adjustment in accordance with this Section 12(i). However, if any such offer also causes the Exercise Price to be adjusted within the terms of Section 12(d) (Common Shares, Securities Rights and Share-Related Securities Issued to Shareholders) or Section 12(e) (Issue of Other Securities to Shareholders) (or would cause the Exercise Price to be so adjusted if the relevant Consideration per Common Share was less than 100% of the Current Market Price per Common Share on the relevant Exchange Business Day), the Exercise Price shall not be subject to adjustment in accordance with this Section 12(i).
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|
|
(ii)
|
Effective Date: For the purposes of this Section 12(i), the "Effective Date" means the first date on which the Common Shares are traded ex-rights on the Principal Exchange.
|
|
|
(iii)
|
Adjustment to the Exercise Price: Where the Exercise Date in respect of the relevant part (if applicable) of the Warrant has not occurred prior to the Effective Date, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the Effective Date by the following fraction:
|
|
|
(j)
|
Other Events; Contemporaneous Events:
|
|
|
(i)
|
Adjustment Event: If either the Company determines and gives notice in writing thereof to the Company that:
|
|
|
(A)
|
an adjustment should be made to the Exercise Price as a result of one or more events or circumstances not referred to in Section 12(a) (Dividends) to Section 12(i) (Other Arrangements to Acquire Securities) (even if the relevant event or circumstance is specifically excluded from the operation of Section 12(a) (Dividends) to Section 12(i) (Other Arrangements to Acquire Securities)) in order to preserve the theoretical value of the aggregate number of Common Shares which may be delivered on exercise of the Warrant or on exercise of the right to subscribe in each case pursuant to the terms of this Warrant; or
|
|
|
(B)
|
more than one event which gives rise or may give rise to an adjustment to the Exercise Price has occurred or will occur within such a short period of time that a modification to the operation of the adjustment provisions is required in order to preserve the theoretical value of the aggregate number of Common Shares which may be delivered on exercise of the Warrant or on exercise of the right to subscribe in each case pursuant to the terms of this Warrant; or
|
|
|
(C)
|
one event which gives rise or may give rise to more than one adjustment to the Exercise Price has occurred or will occur such that a modification to the operation of the adjustment provisions is required in order to preserve the theoretical value of the aggregate number of Common Shares which may be delivered on exercise of the Warrant or on exercise of the right to subscribe in each case pursuant to the terms of this Warrant,
|
|
|
(ii)
|
Effective Date: Upon such determination, the Company shall procure that such adjustment (if any) shall be made and shall take effect in accordance with such determination, provided, however, that an adjustment shall only be made pursuant to this Section 12(d) if the relevant Expert is requested to make such a determination not more than sixty (60) days after the date on which the relevant event occurs or circumstances exist.
|
|
|
(k)
|
Adjustments for Exercise near a Record Date:
|
|
|
(i)
|
Adjustment Event: If and whenever the Exercise Price is to be adjusted pursuant to any of Section 12(a) (Dividends) to Section 12(j) (Other Events; Contemporaneous Events) and the Exercise Date in respect of the relevant part (if applicable) of the Warrantholder is either:
|
|
|
(A)
|
after the Record Date for any such issue, distribution, grant or offer as is mentioned in the relevant provision of this Warrant but before the relevant adjustment becomes effective under such provision; or
|
|
|
(B)
|
before the Record Date for any such issue, distribution, grant or offer as is mentioned in the relevant provision of this Warrant but in circumstances where the Warrantholder is unable, by the relevant Record Date, to become duly entitled to the Common Shares for the purpose of receiving the issue, distribution, grant or offer as is mentioned in the relevant provision of this Warrant, the Exercise Right shall be subject to adjustment in accordance with this Section 12(k).
|
|
|
(ii)
|
Adjustment to the Exercise Right: Upon the relevant adjustment becoming effective under the relevant provision of this Warrant, the Company shall procure that there shall be issued to the Warrantholder or in accordance with the instructions contained in the Exercise Agreement (subject to any applicable exchange control or other laws or other regulations) such additional number of Common Shares as, together with the Common Shares issued or to be issued on exercise, is equal to the number of Common Shares which would have been required to be issued on exercise if the relevant adjustment to the Exercise Price had in fact been made and become effective immediately before the Exercise Date in respect of the relevant part (if applicable) of the Warrant.
|
|
|
(l)
|
Aggregate Consideration and Consideration per Common Share:
|
|
|
(i)
|
Applicability of these Provisions: For the purpose of calculating any adjustment to the Exercise Price pursuant to the provisions of this Warrant, in the case of any:
|
|
|
(A)
|
issue, grant or offer of Common Shares, Share-Related Securities, Securities Rights in respect of Common Shares or Securities Rights in respect of Share-Related Securities; or
|
|
|
(B)
|
grant to any existing securities issued of such rights as to make such securities Share-Related Securities; or
|
|
|
(C)
|
amendment of the terms of any Securities Rights or Share-Related Securities (other than in accordance with their terms of issue),
|
|
|
(ii)
|
Shares for Cash: In the case of an issue, grant or offer of Common Shares for cash:
|
|
|
(A)
|
the Aggregate Consideration shall be the amount of such cash, provided that in no such case shall any deduction be made for any commissions or any expenses paid or incurred by the Company for any underwriting of the issue or otherwise in connection therewith; and
|
|
|
(B)
|
the Number of Common Shares shall be the number of Common Shares so issued, granted or offered.
|
|
|
(iii)
|
Shares not for Cash: In the case of the issue, grant or offer of Common Shares for a consideration in whole or in part other than cash:
|
|
|
(A)
|
the Aggregate Consideration shall be the amount of such cash (if any) plus the consideration other than cash, which shall be deemed to be the Fair Market Value thereof or, if pursuant to applicable law such determination is to be made by application to a court of competent jurisdiction, the value thereof as determined by such court or an appraiser appointed by such court, irrespective of the accounting treatment thereof; and
|
|
|
(B)
|
the Number of Common Shares shall be the number of Common Shares so issued, granted or offered.
|
|
|
(iv)
|
Issue of Share-Related Securities: In the case of the issue, grant or offer of Share-Related Securities or Securities Rights in respect of Share-Related Securities or the grant to any securities issued of such rights as to make such securities Share-Related Securities:
|
|
|
(A)
|
the Aggregate Consideration shall be:
|
|
|
(1)
|
the consideration (if any) received by the Company for such Share-Related Securities and (if applicable) Securities Rights or, as the case may be, such grant; and
|
|
|
(2)
|
the additional consideration (if any) to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Share-Related Securities at the initial price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Securities Rights at the initial price or rate, the consideration in each case to be determined in the same manner as provided in paragraphs (ii) and (iii) of this Section 12(l); and
|
|
|
(B)
|
the Number of Common Shares shall be the number of Common Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Share-Related Securities at the initial price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Securities Rights at the initial price or rate.
|
|
|
(v)
|
Amendment of Share-Related Securities/Securities Rights in Respect of Share-Related Securities: In the case of the amendment of the terms of any Share-Related Securities and/or Securities Rights in respect of Share-Related Securities (in either case, other than in accordance with their terms of issue):
|
|
|
(A)
|
the Aggregate Consideration shall be:
|
|
|
(1)
|
the consideration (if any) received by the Company for such amendment; and
|
|
|
(2)
|
the additional consideration (if any) to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Share-Related Securities at the initial price or rate or (in the case of an amendment to the terms of such Share-Related Securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Securities Rights at the initial price or rate or (in the case of an amendment to the terms of such Securities Rights) the amended price or rate,
|
|
|
(B)
|
the Number of Shares shall be the number of Shares to be issued upon (and assuming) such exercise in full of the rights to subscribe for, purchase or otherwise acquire Shares pursuant to the terms of such Share-Related Securities at the initial price or rate or (in the case of an amendment to the terms of such Share-Related Securities) the amended price or rate and (if applicable) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Rights at the initial price or rate or (in the case of an amendment to the terms of such Rights) the amended price or rate.
|
|
|
(vi)
|
Securities Rights in Respect of Common Shares: In the case of the issue, grant or offer of Securities Rights in respect of Common Shares or the amendment of the terms of any Securities Rights in respect of Common Shares (other than in accordance with their terms of issue):
|
|
|
(A)
|
the Aggregate Consideration shall be:
|
|
|
(1)
|
the consideration received by the Company for any such Securities Rights or, as the case may be, such amendment; and
|
|
|
(2)
|
the additional consideration to be received by the Company upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Securities Rights at the initial price or rate or (in the case of an amendment to the terms of such Securities Rights) the amended price or rate, the consideration in each case to be determined in the same manner as provided in paragraphs (ii) and (iii) of this Section 12(l); and
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(B)
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the Number of Common Shares shall be the number of Common Shares to be issued upon (and assuming) the exercise in full of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Securities Rights at the initial price or rate or (in the case of an amendment to the terms of such Securities Rights) the amended price or rate.
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(vii)
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Currency Translation: If any of the consideration referred to in any of the preceding paragraphs of this Section 12 is receivable in a currency other than U.S. dollars, such consideration shall be translated into U.S. dollars for the purposes of this Section 12:
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(A)
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in any case where there is a fixed rate of exchange between U.S. dollars and the relevant currency for the purposes of the issue, grant or offer of the Common Shares, Share-Related Securities or Securities Rights, the exercise of the rights to subscribe for, purchase or otherwise acquire Share-Related Securities pursuant to the terms of such Securities Rights or the exercise of the rights to subscribe for, purchase or otherwise acquire Common Shares pursuant to the terms of such Securities Rights or Share-Related Securities, at such fixed rate of exchange; and
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(B)
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in all other cases, at the Screen Rate on the date as of which the said consideration is required to be calculated.
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(m)
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Common Shares Issuances: The foregoing provisions of this Section 12 shall not apply to issuances or sales of (i) the Warrant Shares, (ii) Common Shares upon conversion, exercise or exchange of Convertible Securities outstanding on the issuance date hereof in accordance with the terms in effect on such issuance date, or (iii) Common Shares or Convertible Securities under the Company's duly adopted stock option and bonus plans for employees and directors (whether or not such stock option or bonus plans or the issuance of any shares thereunder remain to be approved by shareholders of the Company). For the purposes of the foregoing adjustments, in the case of the issuance of any Convertible Securities, the maximum number of shares of Common Shares issuable upon exercise, exchange or conversion of such Convertible Securities shall be deemed to be outstanding, provided that no further adjustment shall be made upon the actual issuance of Common Shares upon exercise, exchange or conversion of such Convertible Securities.
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(n)
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Successive Adjustments: The adjustments provided for in Section 12 are cumulative and shall apply (without duplication) to successive events resulting in any adjustment under the provisions of this Section 12.
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(o)
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Rounding of Adjustments: All calculations under this Section 12 shall be made to four decimal places for dollar amounts or the nearest 1/100th of a share, as the case may be.
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(p)
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Notice of Adjustments: Whenever the Exercise Price is adjusted pursuant to Sections 12(a) through 12(j), inclusive, the Company shall promptly deliver to the Warrantholder, a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, provided that any failure to so provide such notice shall not affect the automatic adjustment hereunder.
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(q)
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Capital Reorganization: If and whenever at any time prior to Expiration Date there shall be a reorganization, reclassification or other change of Common Shares outstanding at such time or change of the Common Shares into other shares or into other securities, or a consolidation, amalgamation, arrangement or merger of the Company with or into any other corporation or other entity (other than a consolidation, amalgamation, arrangement or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares), or a sale, conveyance or transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or entity in which the holders of Common Shares are entitled to receive shares, other securities or property, including cash (any of such events being herein called a "Capital Reorganization"), any Warrantholder who exercises its right to subscribe for and purchase Warrant Shares pursuant to the exercise of the Warrant after the effective date of such Capital Reorganization shall be entitled to receive, and shall accept for the same aggregate consideration in lieu of the number of Warrant Shares to which the Warrantholder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property, including cash, which the Warrantholder would have received as a result of such Capital Reorganization had it exercised its right to acquire Warrant Shares immediately prior to the effective date or record date, as the case may be, of the Capital Reorganization and had it been the registered holder of such Warrant Shares on such effective date or record date, as the case may be, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in Sections 13(a) through 13(j), inclusive. No Capital Reorganization shall be completed by the Company unless the foregoing provisions of this Section 13(r) have been complied with to the satisfaction of the Warrantholder and the Warrantholder has confirmed the same in writing to the Company, which confirmation shall not be unreasonably withheld.
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13.
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Fractional Interest
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14.
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Benefits
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15.
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Notices to Warrantholder
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16.
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Notices
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17.
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Registration Rights
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18.
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Successors
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19.
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Governing Law
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20.
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Replacement Warrants
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21.
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Absolute Obligation to Issue Warrant Shares
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22.
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Assignment, Etc.
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POLYMET MINING CORP.
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By:
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/s/ Douglas Newby
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Name:
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Douglas Newby
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Title:
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CFO
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Attest:
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| Sign: |
/s/ Joseph Walsh
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| Print Name: | Joseph Walsh |
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Name
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||
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Address
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Name
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||
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Address
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| Dated: | Signature: | |||
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Name (please print)
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||||
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Address
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1.
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Definitions
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2.
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Assignment and Assumption
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3.
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Paramountcy
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4.
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Successors and Assigns
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5.
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Further Assurances
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6.
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Governing Law
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7.
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Time of the Essence
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8.
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Headings, Extended Meanings
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[NAME OF WARRANTHOLDER]
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||
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We have authority to bind the Corporation
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POLYMET MINING CORP.
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We have authority to bind the Corporation
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THE COMPANY:
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POLYMET MINING CORP.
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By:
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/s/ Douglas Newby
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Name: Douglas Newby
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Title: Chief Financial Officer
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GLENCORE:
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GLENCORE AG
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By:
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/s/ Andreas Hubmann
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Name: Andreas Hubmann
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Title: Director
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By:
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/s/ Barbara Bodmer
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Name: Barbara Bodmer
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Title: Officer
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·
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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·
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in the over-the-counter market;
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·
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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·
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through the writing of options, whether such options are listed on an options exchange or otherwise;
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·
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in ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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·
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in block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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·
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in purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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·
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in an exchange distribution in accordance with the rules of the applicable exchange;
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·
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in privately negotiated transactions;
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·
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in short sales;
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·
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in sales pursuant to Rule 144;
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·
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broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;
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·
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by a combination of any such methods of sale; and
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·
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by any other method permitted pursuant to applicable law.
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