Ivanhoe Electric Inc S-1/A, filed Jun 21, 2022
Ivanhoe Electric Inc. (IE)
SECURITIES AND EXCHANGE COMMISSION
TO
UNDER
THE SECURITIES ACT OF 1933
| |
Delaware
(State or Other Jurisdiction of
Incorporation or Organization) |
| |
1000
(Primary Standard Industrial
Classification Code Number) |
| |
32-0633823
(I.R.S. Employer
Identification Number) |
|
Vancouver, BC V6C 3E1
Canada
(604) 689-8765
Chief Executive Officer
Ivanhoe Electric Inc.
606 – 999 Canada Place
Vancouver, BC V6C 3E1
Canada
(604) 689-8765
251 Little Falls Drive
Wilmington, Delaware 19808
(302) 636-5401
| |
Danielle Carbone
James A. Mercadante Reed Smith LLP 599 Lexington Avenue New York, NY 10022 (212) 541-5400 |
| |
Quentin Markin
Stikeman Elliott LLP 666 Burrard Street, Suite 1700 Vancouver, British Columbia V6C 2X8 Canada (604) 631-1300 |
| |
Christopher J. Cummings
Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, NY 10019-6064 (212) 373-3000 |
| |
James Clare
Christopher Doucet Bennett Jones LLP 3400 One First Canadian Place, P.O. Box 130, Toronto, ON, M5X 1A4 Canada (416) 863-1200 |
|
| | Large and accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ | | | Non-accelerated filer | | | ☒ | | | Smaller reporting company | | | ☒ | | |
Emerging growth
company |
| | ☒ | |
INFORMATION NOT REQUIRED IN PROSPECTUS
| | | |
Amount to be Paid
|
| |||
|
SEC registration fee
|
| | | $ | 19,173 | | |
|
FINRA filing fee
|
| | | | 31,525 | | |
|
NYSE American listing fee
|
| | | | 75,000 | | |
|
TSX listing fee
|
| | | | 150,000 | | |
|
Transfer agent fees
|
| | | | 6,000 | | |
|
Printing and engraving expenses
|
| | | | 450,000 | | |
|
Legal fees and expenses
|
| | | | 2,000,000 | | |
|
Accounting fees and expenses
|
| | | | 1,490,000 | | |
|
Miscellaneous
|
| | | | 78,302 | | |
|
Total
|
| | | $ | 4,300,000 | | |
| |
Exhibit
Number |
| |
Description
|
|
| | 1.1 | | | | |
| | 2.1* | | | | |
| | 3.1* | | | | |
| | 3.2* | | | | |
| | 3.3 | | | | |
| | 3.4* | | | | |
| | 3.5 | | | | |
| | 3.6 | | | | |
| | 4.1* | | | | |
| | 4.2* | | | | |
| | 4.3* | | | | |
| | 4.4* | | | | |
| | 4.5* | | | | |
| | 4.6* | | | | |
| | 4.7* | | | | |
| | 4.8* | | | | |
| | 5.1* | | | | |
| | 10.1* | | | | |
| | 10.2* | | | | |
| | 10.3* | | | | |
| | 10.4* | | | | |
| | 10.5* | | | | |
| | 10.6* | | | | |
| | 10.7* | | | | |
| | 10.8* | | | |
| |
Exhibit
Number |
| |
Description
|
|
| | 10.9* | | | | |
| | 10.10# | | | | |
| | 10.11# | | | | |
| | 10.12# | | | | |
| | 10.13# | | | | |
| | 10.14# | | | | |
| | 10.15* | | | | |
| | 10.16 | | | | |
| | 10.17* | | | | |
| | 10.18* | | | | |
| | 10.19 | | | | |
| | 21.1* | | | | |
| | 23.1 | | | | |
| | 23.2* | | | | |
| | 23.3* | | | | |
| | 23.4* | | | | |
| | 23.5* | | | | |
| | 23.6* | | | | |
| | 23.7* | | | | |
| | 23.8* | | | | |
| | 23.9* | | | | |
| | 23.10* | | | | |
| | 23.11* | | | | |
| | 23.12* | | | | |
| | 23.13* | | | | |
| | 23.14* | | | | |
| | 23.15* | | | | |
| | 23.16* | | | | |
| | 23.17* | | | | |
| | 23.18* | | | | |
| | 23.19* | | | | |
| | 23.20* | | | | |
| | 23.21* | | | | |
| | 23.22* | | | | |
| | 23.23* | | | | |
| | 24.1* | | | | |
| | 96.1* | | | |
| |
Exhibit
Number |
| |
Description
|
|
| | 96.2* | | | | |
| | 99.1* | | | | |
| | 99.2* | | | | |
| | 99.3* | | | | |
| | 99.4* | | | | |
| | 107 | | | |
Title: Chief Executive Officer
| |
Signature
|
| |
Title
|
| |
Date
|
|
| |
/s/ Robert Friedland
Robert Friedland
|
| | Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | | |
June 21, 2022
|
|
| |
/s/ Catherine Barone
Catherine Barone
|
| | Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | |
June 21, 2022
|
|
| |
*
Francis Fannon
|
| | Director | | |
June 21, 2022
|
|
| |
*
Laurent Jean-Louis Frescaline
|
| | Director | | |
June 21, 2022
|
|
| |
*
Hirofumi Katase
|
| | Director | | |
June 21, 2022
|
|
| |
*
Kenneth Lau
|
| | Director | | |
June 21, 2022
|
|
| |
*
Patrick On Yip Tsang
|
| | Director | | |
June 21, 2022
|
|
| |
*
Ian Plimer
|
| | Director | | |
June 21, 2022
|
|
| |
*By:
/s/ Robert Friedland
Robert Friedland
Attorney-in-Fact |
| | | ||||
Exhibit 1.1
[●] Shares
IVANHOE ELECTRIC INC.
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
UNDERWRITING AGREEMENT
[●], 2022
BMO Capital Markets Corp.
Jefferies LLC
As Representatives of the Several Underwriters
c/o BMO Capital Markets Corp.
151 W 42nd St.
New York, New York 10036
and
Jefferies LLC
520 Madison Avenue
New York, New York 10022
and
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Ladies and Gentlemen:
Ivanhoe Electric Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell an aggregate of [●] shares (the “Firm Shares”) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), to the several underwriters (collectively, the “Underwriters”) named in Schedule I to this agreement (this “Agreement”), for whom BMO Capital Markets Corp. (“BMOCM”) and Jefferies LLC are acting as representatives (the “Representatives”). The Company has also agreed to grant to the Underwriters an option (the “Option”) to purchase up to an additional [●] shares of Common Stock (the “Option Shares”) on the terms set forth in Section 1(b) hereof. The Firm Shares and the Option Shares are hereinafter collectively referred to as the “Shares.”
| - 1 - |
The Company confirms as follows its agreement with the Representatives and the several other Underwriters:
1. Agreement to Sell and Purchase.
(a) Purchase of Firm Shares. On the basis of the representations, warranties and agreements of the Company contained herein and subject to all the terms and conditions of this Agreement, the Company agrees to sell to the several Underwriters and each of the several Underwriters, severally and not jointly, agrees to purchase from the Company, at a purchase price per share of $[●] (the “Purchase Price”), the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I, plus such additional number of Firm Shares which such Underwriter may become obligated to purchase pursuant to Section 8 hereof.
(b) Purchase of Option Shares. Subject to all the terms and conditions of this Agreement, the Company grants the Option to the several Underwriters to purchase, severally and not jointly, all or less than all of the Option Shares at the Purchase Price less an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Option Shares. The Option may be exercised in whole or in part at any time on or before the 30th day after the date of this Agreement, upon written notice (the “Option Shares Notice”) by the Representatives to the Company no later than 12:00 noon, New York City time, at least two and no more than five business days before the date specified for closing in the Option Shares Notice (the “Option Closing Date”) setting forth the aggregate number of Option Shares to be purchased and the time and date for such purchase. On any Option Closing Date, the Company shall issue and sell to the Underwriters the number of Option Shares set forth in the Option Shares Notice and each Underwriter shall purchase from the Company such percentage of the Option Shares as is equal to the percentage of Firm Shares that such Underwriter is purchasing, as adjusted by the Representatives in such manner as they deem advisable to avoid fractional shares.
2. Delivery and Payment.
(a) Closing. Delivery of the Firm Shares shall be made to the Representatives through the facilities of the Depository Trust Company (“DTC”) for the respective accounts of the Underwriters against payment of the Purchase Price by wire transfer of immediately available funds to the Company. Such payment shall be made at 9:00 a.m., New York City time, on the second business day (the third business day, should the offering be priced after 4:00 p.m., Eastern Time) after the date on which the first bona fide offering of the Firm Shares to the public is made by the Underwriters or at such time on such other date, not later than ten business days after such date, as may be agreed upon by the Company and the Representatives (such date is hereinafter referred to as the “Closing Date”).
(b) Option Closing. To the extent the Option is exercised, delivery of the Option Shares against payment by the Representatives (in the manner and at the location specified above) shall take place at the time and date (which may be the Closing Date, but not earlier than the Closing Date) specified in the Option Shares Notice.
(c) Electronic Transfer. Electronic transfer of Shares shall be made at the time of purchase in such names and in such denominations as the Representatives shall specify.
| - 2 - |
(d) Stamp Tax. The Company shall pay, bear and hold the Underwriters harmless against any stamp duty, stamp duty reserve tax, and any other issue, transfer, registration, documentary, value added tax or sales tax or duty in any jurisdiction (“Stamp Tax”) which is payable in connection with: (i) the execution, delivery, consummation or enforcement of this Agreement; (ii) the grant, exercise or lapsing of the Option; (iii) the creation, allotment, or issue of any Shares; (iv) the initial entry of the Shares into the facilities of DTC; (v) the acquisition of the Shares by, or crediting or delivery of the Shares to or for the account of, the Underwriters (or any purchasers or subscribers procured by the Underwriters); or (vi) the sale and/or delivery of any Shares by any Underwriter to any initial purchaser in the manner contemplated in this Agreement.
3. Representations and Warranties of the Company. The Company represents and warrants to, and covenants with, each Underwriter as follows:
(a) Compliance with Registration Requirements. A registration statement on Form S-1 (Registration No. 333-265175) relating to the Shares, including a preliminary prospectus and such amendments to such registration statement as may have been required to the date of this Agreement, has been prepared by the Company under the provisions of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations (collectively referred to as the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder, and has been filed with the Commission. Copies of such registration statement and of each amendment thereto, if any, including the related preliminary prospectuses, heretofore filed by the Company with the Commission have been delivered or made available to the Underwriters. The term “Registration Statement” means the registration statement as amended at the time it becomes or became effective, including financial statements and all exhibits and any information deemed to be included therein by Rule 430A, Rule 430B or Rule 430C of the Rules and Regulations, as applicable. If the Company files a registration statement to register a portion of the Shares and relies on Rule 462(b) of the Rules and Regulations for such registration statement to become effective upon filing with the Commission (the “Rule 462 Registration Statement”), then any reference to the “Registration Statement” shall be deemed to include the Rule 462 Registration Statement, as amended from time to time. The term “U.S. preliminary prospectus” as used herein means a preliminary prospectus as contemplated by Rule 430, Rule 430A or Rule 430B of the Rules and Regulations included at any time as part of, or deemed to be part of or included in, the registration statement. The term “U.S. Prospectus” means the final prospectus in connection with this offering as first filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is required, the form of final prospectus included in the Registration Statement at the effective date. The term “Testing-the-Waters Communication” means any oral or written communication with potential investors in reliance on Section 5(d) of the Act and Section 13.4 of National Instrument 41-101 – General Prospectus Requirements (“NI 41-101”). The term “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 of the Rules and Regulations. The Company has also prepared and filed a preliminary base PREP prospectus relating to the Shares in the English language in accordance with the rules and procedures established pursuant to National Instrument 44-103—Post-Receipt Pricing (“NI 44-103”) for the pricing of securities after the receipt for a prospectus has been obtained (the “Canadian Preliminary Prospectus”) with the British Columbia Securities Commission (the “BCSC”) and with the securities commissions or other securities regulatory authorities in each of the provinces and territories of Canada other than the Québec (“Canadian Securities Commissions”). The Company has obtained a receipt from the BCSC for the Canadian Preliminary Prospectus, which receipt also evidences that a receipt for the Canadian Preliminary Prospectus has been deemed to have been issued by each of the other Canadian Securities Commissions in accordance with Multilateral Instrument 11-102—Passport System (“MI 11-102”) and National Policy 11-202—Process for Prospectus Review in Multiple Jurisdictions (“NP 11-202” together with MI 11-102, the “Passport System”). The Company has also prepared and filed with the BCSC and the other Canadian Securities Commissions a final base PREP prospectus relating to the offering of the Shares in each of the provinces and territories of Canada (other than Québec) in the English language in accordance with NI 44-103 (the “Canadian Final Prospectus”), and has obtained a receipt from the BCSC for the Canadian Final Prospectus, which receipt also evidences that a receipt for the Canadian Final Prospectus has been deemed to have been issued by each of the other Canadian Securities Commissions on the basis that the Company has satisfied the conditions pursuant to the Passport System. For purposes of this Agreement, all references to any Canadian Preliminary Prospectus, the Canadian Final Prospectus, the Canadian Supplemented Prospectus (as defined below), or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Canadian Securities Commissions pursuant to the System for Electronic Document Analysis and Retrieval (“SEDAR”). The Company will, promptly after the execution and delivery of this Agreement, prepare and file with the Canadian Securities Commissions, in accordance with NI 44-103, a supplemented PREP prospectus setting forth the PREP Information (as defined below) (the “Canadian Supplemented Prospectus”). The information included in the Canadian Supplemented Prospectus that is omitted from the Canadian Final Prospectus and which is deemed under NI 44-103 to be incorporated by reference in the Canadian Final Prospectus as of the date of the Canadian Supplemented Prospectus is referred to herein as the “PREP Information.” The U.S. Prospectus and the Canadian Supplemented Prospectus are referred to collectively as the “Prospectus.”
| - 3 - |
(b) Effectiveness of Registration. The Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto have been declared effective by the Commission under the Act or have become effective pursuant to Rule 462 of the Rules and Regulations. The Company has responded to all requests, if any, of the Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462 Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission.
(c) Accuracy of Registration Statement. Each of the Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto, at the time it became effective and at all subsequent times, complied and will comply in all material respects with the Act and the Rules and Regulations, and did not and will not 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 not misleading. The U.S. Prospectus, as amended or supplemented, as of its date and at all subsequent times, complied and will comply in all material respects with the Act and the Rules and Regulations, and did not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, in the light of the circumstances under which they were made. Each U.S. preliminary prospectus (including the preliminary prospectus or prospectuses filed as part of the Registration Statement or any amendment thereto) complied when so filed in all material respects with the Rules and Regulations, and each U.S. preliminary prospectus and the U.S. Prospectus delivered or made available to the Underwriters for use in connection with this offering is identical to the electronically transmitted copies thereof filed with the Commission on EDGAR, except to the extent permitted by Regulation S-T. The Canadian Final Prospectus when it was filed was, and as amended and supplemented, if applicable, will when filed be, true and correct in all material respects and contain full, true and plain disclosure of all material facts relating to the Company and its subsidiaries and the Shares as required by applicable securities laws in each of the provinces and territories in Canada (other than Québec) emanating from governmental authorities, including the respective rules and regulations made thereunder together with applicable published national and local instruments, policy statements, notices, blanket rules and orders of the Canadian Securities Commissions, all discretionary rulings and orders applicable to the Company, if any, of the Canadian Securities Commissions (the “Canadian Securities Laws”). The Canadian Preliminary Prospectus and the Canadian Final Prospectus comply and, as amended or supplemented (including for greater certainty, by the Canadian Supplemented Prospectus), if applicable, will comply, in all material respects with Canadian Securities Laws. As of the Applicable Time, the Canadian Final Prospectus, other than excluding the PREP Information to be included in the Canadian Supplemented Prospectus, is true and correct in all material respects and contains full, true and plain disclosure of all material facts relating to the Company and its subsidiaries and the Shares as required by the Canadian Securities Laws. The Canadian Supplemented Prospectus, as of its date and as of the Closing Date, will be true and correct in all material respects and contain full, true and plain disclosure of all material facts relating to the Company and its subsidiaries and the Shares as required by Canadian Securities Laws. The foregoing representations and warranties in this Section 3(c) do not apply to any statements or omissions made in reliance on and in conformity with information relating to any Underwriter furnished in writing to the Company by the Representatives specifically for inclusion in the Registration Statement or Prospectus or any amendment or supplement thereto. For all purposes of this Agreement, the amounts of the selling concession and information regarding stabilization set forth in the Prospectus constitute the only information (the “Underwriters’ Information”) relating to any Underwriter furnished in writing to the Company by the Representatives specifically for inclusion in the preliminary prospectus, the Registration Statement or the Prospectus.
| - 4 - |
(d) Company Not Ineligible Issuer. (i) At the time of filing the Registration Statement relating to the Shares and (ii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 of the Rules and Regulations).
(e) Disclosure at the Time of Sale. As of the Applicable Time (as defined below), neither (i) the Issuer General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the most recent preliminary prospectus related to this offering, and the information included on Schedule IV hereto, all considered together (together with the Canadian Final Prospectus, the “Time of Sale Prospectus”), nor (ii) any individual Issuer Limited Use Free Writing Prospectus (as defined below), when considered together with the Time of Sale Prospectus, nor (iii) any Written Testing-the-Waters Communication, when considered together with the Time of Sale Prospectus, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the respective items set forth in clauses (i), (ii) and (iii), taken together as described in each such clause, contain full, true and plain disclosure of all material facts relating to the Company and its subsidiaries and the Shares as required by Canadian Securities Laws. The preceding sentence does not apply to statements in or omissions from the Time of Sale Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the Underwriters’ Information.
| - 5 - |
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means __:__ [a.m.][p.m.](New York City Time) on _____, 2022 or such other time as agreed by the Company and the Representatives.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations, relating to the Shares that (i) is required to be filed with the Commission by the Company, (ii) is a “written communication that is a road show” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g); provided, however, that a Written Testing-the-Waters Communication shall be deemed not to be an Issuer Free Writing Prospectus.
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule II hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date, does not include any information that conflicts with the information contained in the Registration Statement. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with the Underwriters’ Information. If at any time following the issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the Shares or included or would include an untrue statement of material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified or will promptly notify the Representatives and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement, or omission.
| - 6 - |
(g) Distribution of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the later of the Closing Date, any Option Closing Date and the completion of the Underwriters’ distribution of the Shares, any offering material in connection with the offering or sale of the Shares other than any Testing-the-Waters Communication made in compliance with Section 3(uu) hereof, the Registration Statement, the U.S. preliminary prospectus, the Canadian Preliminary Prospectus, the Permitted Free Writing Prospectuses reviewed and consented to by the Representatives and included in Schedule II hereto, and the Prospectus.
(h) Due Incorporation; Subsidiaries.
(i) The Company is, and at the Closing Date will be, a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company has, and at the Closing Date will have, full power and authority to conduct all the activities conducted by it, to own or lease all the assets owned or leased by it and to conduct its business as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus. The Company is, and at the Closing Date will be, duly licensed or qualified to do business in and in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted by it or the character of the assets owned or leased by it makes such licensing or qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.
(ii) Each material subsidiary of the Company as listed in Schedule V hereto (each, a “Material Subsidiary”) has been duly incorporated or organized, is validly existing as a corporation or other entity in good standing under the laws of the jurisdiction of its incorporation or organization, has the corporate or other power and authority to own its property and to conduct its business as described in the Registration Statement, the Time of Sale Prospectus and Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued share capital or other issued equity interests of each Material Subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly by the Company, free and clear of all liens, charges, encumbrances, equities, security interests, restrictions on voting or transfer or any other claims, except for such restrictions on transfer contained in shareholders agreements that would not have a material adverse effect on the Company and its subsidiaries taken as a whole. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, no Material Subsidiary is currently prohibited, directly or indirectly under any agreement or instrument to which it is a party or is subject, from paying any dividends to its shareholders, from repaying the Company or any other subsidiary of the Company any loans or advances to such Material Subsidiary from the Company or such other subsidiary or from transferring any of such Material Subsidiary’s properties or assets to the Company or any other subsidiary. Schedule V is a complete and accurate list of all subsidiaries that are material to the Company and its subsidiaries, taken as a whole, including, for the avoidance of doubt, all “significant subsidiaries” of the Company as defined in Rule 1-02(w) of Regulation S-X under the Act.
| - 7 - |
(i) Capitalization. The authorized, issued and outstanding capital stock of the Company is as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus under the caption “Capitalization.” The outstanding shares of Common Stock and any other outstanding capital stock of the Company have been, and the Shares will be, duly authorized, validly issued, fully paid and non-assessable and, as of the Closing Date, will not be subject to any preemptive, first refusal, or similar right. The description of the Common Stock included in the Registration Statement at the effective date of the Registration Statement, the Time of Sale Prospectus at the Applicable Time and the Prospectus as of its date and at the Closing Date, is or will be, as applicable, complete and accurate in all material respects. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company does not have outstanding, and at the Closing Date and any Option Closing Date will not have outstanding, any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or any contracts or commitments to issue or sell, any shares of capital stock of the Company or any such warrants, convertible securities or obligations. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, and except for such agreements as will terminate on or prior to the Closing Date and be of no further force and effect thereafter, there are no stockholder agreements, voting agreements or other similar agreements, with respect to the Company’s share capital to which the Company is a party or, to the Company’s knowledge, to or between or among any of the Company’s shareholders. Upon the issuance and delivery pursuant to the terms of this Agreement, the Underwriters will acquire good and marketable title to the Shares, free and clear of any lien, charge, claim, encumbrance, pledge, security interest, defect or other restriction or equity of any kind whatsoever.
(j) Financial Statements. The financial statements (including the related notes thereto) included in the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly the financial condition of the Company and its consolidated subsidiaries as of the respective dates thereof and their results of operations and cash flows for the respective periods covered thereby, comply as to form in all material respects with the applicable requirements of Regulation S-X under the Act (“Regulation S-X”) and Canadian Securities Laws and have been prepared in conformity with generally accepted accounting principles applied in the United States on a consistent basis throughout the entire period involved. The selected financial data included in the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the financial statements included therein and the books and records of the Company and its subsidiaries. No other financial statements, schedules or reconciliations of “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) of the Company are required by the Act, the Rules and Regulations or Canadian Securities Laws to be included in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(k) Independent Accountants. Deloitte LLP (the “Accountants”), who certified the financial statements of the Company and its consolidated subsidiaries included in the Registration Statement, the Time of Sale Prospectus and the Prospectus, are (i) independent accountants as required by the Act and the Rules and Regulations, by the rules of the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and by Canadian Securities Laws, (ii) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X and (iii) a registered public accounting firm as defined by the PCAOB whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn. There has not been any reportable event (within the meaning of National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian Securities Administrators (“NI 51-102”)) with such firm. There has not been any disagreement (within the meaning of NI 51-102) with the Accountants with respect to audits of the Company.
| - 8 - |
(l) No Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement and the Prospectus and prior to the Closing Date and any Option Closing Date, except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) there has not been a material adverse change, or any development that would be expected to result in a material adverse change, in or affecting the business, properties, assets, management, business prospects, condition (financial or otherwise), results of operations or capitalization of the Company and its subsidiaries, taken as a whole, arising for any reason whatsoever (a “Material Adverse Change”), (ii) the Company has not incurred, nor will it incur, any material liabilities or obligations, direct or contingent, nor has it entered into, nor will it enter into, any material transactions not in the ordinary course of business, other than pursuant to this Agreement and the transactions referred to herein, (iii) the Company has not and will not have paid or declared any dividends or other distributions of any kind on any class of its capital stock and (iv) the Company has not materially altered its method of accounting.
(m) Investment Company. The Company is not, and, after giving effect to the issuance and sale of the Shares and the use of the proceeds therefrom as described in the Time of Sale Prospectus and the Prospectus, will not be, an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission promulgated thereunder.
(n) Litigation. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no actions, suits or proceedings pending, or to the Company’s knowledge, threatened against, the Company or any of its subsidiaries or any of their respective officers in their capacity as such, before or by any foreign, federal or state court, commission, regulatory body, including the Financial Industry Regulatory Authority, Inc. (“FINRA”), the Toronto Stock Exchange (the “TSX”) and the NYSE American LLC (the “NYSE American”), administrative agency or other governmental body, domestic or foreign, wherein an unfavorable ruling, decision or finding would reasonably be expected to (i) have a material adverse effect on the business, properties, assets, management, business prospects, condition (financial or otherwise), results of operations or capitalization of the Company and its subsidiaries, taken as a whole, or (ii) prevent or materially interfere with the consummation of the transactions contemplated hereby or the performance by the Company of its obligations hereunder (any such effect, prevention or interference, a “Material Adverse Effect”). The Company has not received any notice of proceedings relating to the revocation or modification of any material authorization, approval, order, license, certificate, franchise or permit. There are no pending investigations known to the Company involving the Company by any governmental agency having jurisdiction over the Company or its business or operations.
| - 9 - |
(o) Compliance with Laws and Regulations and Performance of Obligations and Contracts. The Company and its subsidiaries have, and at the Closing Date and any Option Closing Date will have, (i) complied in all material respects with all laws, regulations and orders applicable to it or its business and (ii) performed all obligations required to be performed by it, and is not, and at the Closing Date will not be, in default under any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement, lease, license, agreement pursuant to which the Company and its subsidiaries hold their property and assets (including any interest in, or right to earn an interest in or acquire mineral production from any property) or other agreement or instrument (individually, a “Contract” and collectively, “Contracts”) to which it is a party or by which its property is bound, in any such case which non-performance, default or event, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Company, no other party under any Contract to which it is a party is in default in any respect thereunder or has given written or oral notice to the Company of such other party’s intention to terminate, cancel or refuse to renew any Contract. The Company is not now, and at the Closing Date will not be, in violation of any provision of its certificate of incorporation or by-laws. The disclosures included in the Registration Statement, the Time of Sale Prospectus and the Prospectus concerning the effects of federal, state, local and foreign laws, rules and regulations on the business of the Company as currently conducted and as proposed to be conducted, to the extent such disclosures summarize such rules and regulations, are accurate in all material respects.
(p) No Consent of Governmental Body Needed. No consent, approval, authorization, license, registration, qualification or order of, or any filing or declaration with, any court or arbitrator or governmental or regulatory authority, agency or body is required in connection with the authorization, issuance, transfer, sale or delivery of the Shares by the Company, in connection with the execution, delivery and performance of this Agreement by the Company or in connection with the taking by the Company of any action contemplated hereby, except (i) as have been obtained under the Act, the filing of the U.S. Prospectus with the Commission and such as may be required under state securities or Blue Sky laws or the by-laws and rules of FINRA and the NYSE American in connection with the purchase and distribution by the Underwriters of the Shares to be sold by the Company or (ii) filing of the Canadian Supplemented Prospectus not yet filed on the date hereof, following its execution, with the applicable Canadian Securities Commissions.
(q) Agreement Duly Authorized. The Company has full corporate power and authority to enter into this Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(r) No Conflicts. The execution and delivery by the Company of this Agreement and the performance of this Agreement, the consummation of the transactions contemplated hereby, and the application of the net proceeds from the offering and sale of the Shares to be sold in the manner set forth in the Time of Sale Prospectus and the Prospectus under “Use of Proceeds” do not and will not (i) violate the certificate of incorporation or by-laws of the Company or (ii) result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any Material Subsidiary pursuant to the terms or provisions of, or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give any other party a right to terminate any of its obligations under, or result in the acceleration of any obligation under any Contract to which the Company or any of its Material Subsidiaries is a party or by which the Company or any of its Material Subsidiaries or any of its properties is bound, or violate or conflict with any judgment, ruling, decree, order, law, statute, rule or regulation of any court or other governmental agency or body applicable to the business or properties of the Company or any of its Material Subsidiaries, except, in the case of clause (ii), as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
| - 10 - |
(s) Title to Real and Personal Property. Except for those real properties and real property interests addressed in Section 3(nn), the Company and its subsidiaries have good and marketable title to all real and personal property described in the Registration Statement, the Time of Sale Prospectus and the Prospectus as being owned respectively by them, in each case, free and clear of all liens, charges, encumbrances or restrictions, except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, or as are not, individually or in the aggregate, material to the business of the Company. The Company and its subsidiaries have valid, subsisting and enforceable leases for any real or personal property leased by them as described in the Time of Sale Prospectus and the Prospectus, with such exceptions as do not materially interfere with the use made and proposed to be made of such real or personal property by the Company and its subsidiaries.
(t) No Material Acquisitions or Dispositions. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, neither the Company nor its subsidiaries has approved, has entered into, or has any knowledge of any binding agreement in respect of (X) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Company or its subsidiaries, whether by asset sale, transfer of shares or otherwise, (Y) the change of control (by sale or transfer of shares or sale of all or substantially all of the property and assets of the Company or its subsidiaries or otherwise) of the Company or its subsidiaries, or (Z) a proposed or planned disposition of shares by any stockholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Company or its subsidiaries.
(u) Material Interests and Third Party Properties. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company does not have any information or knowledge of any fact relating to its interests in any mining or development projects or properties (the “Mineral Interests”), which would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company does not have any knowledge that (A) any owner or operator (an “Operator”) of a property which is subject to a Mineral Interest (a “Material Third Party Property”) does not hold all requisite licenses, registrations, qualifications, permits and consents necessary or appropriate for carrying on its respective business as currently carried on with respect to the Material Third Party Property and that such licenses, registrations, qualifications, permits and consents are invalid and are not subsisting and in good standing in accordance with applicable laws; and (B) any Operator has received any notice of proceedings relating to the revocation or adverse modification of any material mining license, registration, qualification or permit, or that any Operator has received notice of the revocation or cancellation of, or any intention to revoke or cancel, any mining rights, exploration or prospecting rights, concessions or licenses with respect to any Material Third Party Property.
| - 11 - |
(v) Documents Described in Registration Statement. There is no document or Contract of a character required to be described in the Registration Statement, the Time of Sale Prospectus and the Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed as required. All such documents and Contracts described in the Registration Statement, the Time of Sale Prospectus and the Prospectus or filed as an exhibit to the Registration Statement were duly authorized, executed and delivered by the Company, constitute valid and binding agreements of the Company and are enforceable against the Company in accordance with the terms thereof.
(w) No Untrue Statement; Statistical and Market Data. No statement, representation, warranty or covenant made by the Company in this Agreement or made in any certificate or document required by this Agreement to be delivered to Representatives was or will be, when made, inaccurate, untrue or incorrect in any material respect. All statistical or market-related data included in the Registration Statement, the Time of Sale Prospectus and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate in all material respects, and the Company or the Representatives have obtained the written consent to the use of such data from such sources to the extent required.
(x) No Price Stabilization or Manipulation. Neither the Company nor any of its directors, officers or controlling persons has taken, directly or indirectly, any action intended to cause or result in, or which might reasonably be expected to cause or result in, or which has constituted, stabilization or manipulation, under the Act or otherwise, of the price of any security of the Company to facilitate the sale or resale of the Shares.
(y) No Registration Rights. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, no holder of securities of the Company has rights to register any securities of the Company because of the filing of the Registration Statement, the Time of Sale Prospectus, the Prospectus or the offering of the Shares, except for rights that have been duly waived by such holder, have expired or will expire as a result of the offering of the Shares.
(z) Stock Exchange Listing. The Shares have been approved for listing on the NYSE American, subject only to official notice of issuance. The Shares have been conditionally approved for listing and posting for trading on the TSX, subject only to the satisfaction by the Company of customary conditions imposed by the TSX in similar circumstances.
(aa) Labor Matters. Neither the Company nor any of its Material Subsidiaries is involved in any labor dispute except where the dispute would not, individually or in the aggregate, have a Material Adverse Effect, nor, to the knowledge of the Company, is any such dispute threatened.
| - 12 - |
(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries, nor any director or officer of the Company or its subsidiaries, nor, to the knowledge of the Company, any agent or employee of the Company or its subsidiaries, affiliate or other person acting on behalf of the Company or its subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment of corporate funds or benefit to any foreign or domestic government or regulatory official or employee, including, without limitation, of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, the Corruption of Foreign Public Officials Act (Canada), the U.K. Bribery Act 2010, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offense under any other applicable anti-bribery or anti-corruption laws; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company has instituted, maintained and enforced, and will continue to maintain and enforce, policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws.
(cc) Compliance with Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions in which the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(dd) No Conflicts with Sanctions Laws. Neither the Company nor any of its subsidiaries, nor any director or officer of the Company or its subsidiaries, nor, to the knowledge of the Company, any agent, employee or representative of the Company or its subsidiaries, affiliate or other person acting on behalf of the Company or its subsidiaries is currently the subject or target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its subsidiaries located, organized or resident in a country or territory that is the subject or the target of Sanctions, including, without limitation, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Cuba, Iran, North Korea and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or the target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. Since the date of its initial incorporation, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.
| - 13 - |
(ee) Taxes. The Company and its Material Subsidiaries have filed, or otherwise obtained extensions in respect of the filing of, all federal, state and foreign income and franchise tax returns and have paid all taxes required to be filed or paid by them with the United States Internal Revenue Services, the Canada Revenue Agency or any other federal, state, provincial, local or foreign entity responsible for the imposition, collection or administration of taxes in any jurisdiction and, if due and payable, any related or similar assessment, fine or penalty levied against them. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 3(j) hereof in respect of all material federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company has not been finally determined. The Company and its Material Subsidiaries are not aware of any material claims against them by any taxing authority in relation to the filing of tax returns or the payment of required taxes.
(ff) Insurance. The Company and its Material Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company believes are adequate for the conduct of their business and the value of their properties and is customary for companies engaged in similar industries, and all such insurance is in full force and effect. The Company has no reason to believe that it and its Material Subsidiaries will not be able to (i) renew their existing insurance coverage as and when such policies expire or (ii) obtain comparable coverage from similar institutions as may be necessary to conduct their business as currently conducted. Neither the Company nor any of its Material Subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.
(gg) Benefit Plans. The Company has not maintained or contributed to a defined benefit plan as defined in Section 3(35) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). No plan maintained or contributed to by the Company that is subject to ERISA (an “ERISA Plan”) (or any trust created thereunder) has engaged in a “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) that could subject the Company to any material tax penalty on prohibited transactions and that has not adequately been corrected. Each ERISA Plan is in compliance in all material respects with all reporting, disclosure and other requirements of the Code and ERISA as they relate to such ERISA Plan, except for any noncompliance which would not result in the imposition of a material tax or monetary penalty. With respect to each ERISA Plan that is intended to be “qualified” within the meaning of Section 401(a) of the Code, either (i) a determination letter has been issued by the Internal Revenue Service stating that such ERISA Plan and the attendant trust are qualified thereunder, or (ii) the remedial amendment period under Section 401(b) of the Code with respect to the establishment of such ERISA Plan has not ended and a determination letter application will be filed with respect to such ERISA Plan prior to the end of such remedial amendment period. The Company has never completely or partially withdrawn from a “multiemployer plan,” as defined in Section 3(37) of ERISA.
| - 14 - |
(hh) Title to Intellectual Property. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company and its subsidiaries own, have valid and enforceable licenses for, or otherwise have adequate rights to use all technology (including but not limited to patented, patentable and unpatented inventions and unpatentable proprietary or confidential information, systems or procedures), designs, processes, licenses, patents, trademarks, service marks, trade secrets, trade names, know how, copyrights and other works of authorship, computer programs, technical data and information and all similar intellectual property or proprietary rights (including all registrations and applications for registration of, and all goodwill associated with, any of the foregoing, as applicable) (collectively, “Intellectual Property”) that are material to their business as currently conducted or as proposed to be conducted or to the development, manufacture, operation and sale of any products and services sold or currently proposed to be sold by any of the Company or its subsidiaries, except where the failure to own, license or otherwise have rights to such Intellectual Property would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Intellectual Property of the Company and its subsidiaries has not been adjudged by a court or other administrative body of competent jurisdiction to be invalid or unenforceable in whole or in part. Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) to the knowledge of the Company, there are no third parties who have established or are able to establish, rights to any Intellectual Property owned by, or licensed to, the Company or its subsidiaries, except for, and to the extent of, the ownership rights of the owners of the Intellectual Property which the Registration Statement, the Time of Sale Prospectus and the Prospectus disclose is licensed to the Company; (ii) to the knowledge of the Company, there is no infringement, misappropriation or other violation by third parties of any Intellectual Property owned by, or licensed to, the Company or its subsidiaries; (iii) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the Company’s or any of its subsidiaries’ rights in or to any Intellectual Property owned by, or licensed to, the Company or its subsidiaries; (iv) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any Intellectual Property owned by, or licensed to, the Company and its subsidiaries; (v) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that (nor has the Company or any of its subsidiaries received any written claim from a third party that) the Company or its subsidiaries infringe, misappropriate or otherwise violate, or would, upon the commercialization of any product or service described in the Registration Statement, the Time of Sale Prospectus or the Prospectus as under development, infringe, misappropriate or otherwise violate, any Intellectual Property rights of others; (vi) the Company and its subsidiaries have complied in all material respects with and there has been no material breach or default under the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company and its subsidiaries, and all such agreements which are material to the Company’s business are in full force and effect; and (vii) there is no patent or patent application that contains claims that interfere with the issued or pending claims of any of the Intellectual Property owned by or licensed to the Company or its subsidiaries or that challenges the validity, enforceability or scope of any such Intellectual Property; except, in each case of (ii) through (vii), as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus, the Company and its subsidiaries are not obligated or under any liability whatsoever to make any material payment by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, any Intellectual Property, with respect to the use thereof or in connection with the conduct of their respective businesses or otherwise.
| - 15 - |
(ii) Trademarks. The Company and its subsidiaries own, or otherwise have the full right to use, all material trademarks and trade names that are used in or reasonably necessary for the conduct of their business as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus. The Company has not received any notice of infringement of or conflict with asserted rights of others with respect to any such material trademarks or trade names, or challenging or questioning the validity or effectiveness of any such material trademark or trade name. To the Company’s knowledge, the use of such material trademarks and trade names in connection with the business and operations of the Company and its subsidiaries does not infringe on the rights of any person. The Company and its subsidiaries are not obligated or under any liability whatsoever to make any payment by way of royalties, fees or otherwise to any owner or licensee of, or other claimant to, any material trademark, service marks or trade name with respect to the use thereof or in connection with the conduct of their business or otherwise.
(jj) Protection of Intellectual Property. The Company and its subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all their Intellectual Property in all material respects.
(kk) Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement, the Time of Sale Prospectus and the Prospectus that have not been described. Without limiting the generality of the immediately preceding sentence, no relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers or stockholders holding 5% or more of the Company’s outstanding stock on the other hand, that is required to be described in the Registration Statement, the Time of Sale Prospectus and the Prospectus and that is not so described. Since inception, the Company has not, directly or indirectly, extended or maintained credit, arranged to extend credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company, or to or for any family member or affiliate of any director or executive officer of the Company in violation of applicable laws, including Section 13(k) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
| - 16 - |
(ll) Environmental Matters.
(a) Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus (i) each of the Company and its subsidiaries is and has been in compliance with, and is not subject to any pending, or to the knowledge of the Company, threatened, costs or liability under, any and all federal, state, local and non-U.S. statutes, laws, rules, regulations, ordinances, codes, other requirements or rules of law (including common law) and judicial or administrative decisions or orders, relating to pollution, the generation, use, handling, transportation, treatment, storage, discharge, disposal or release of hazardous substances, the protection or restoration of the environment, human health and safety, noise or the protection of natural resources, including wildlife, migratory birds, eagles or endangered or threatened species or habitats (collectively, “Environmental Laws”), (ii) neither the Company nor any of its subsidiaries owns, occupies, operates, leases or uses any real property contaminated with Hazardous Substances, (iii) neither the Company nor any of its subsidiaries is conducting or funding any investigation, remediation, remedial action or monitoring of actual or suspected Hazardous Substances in the environment, (iv) neither the Company nor any of its subsidiaries is liable or allegedly liable for any release or threatened release of Hazardous Substances, including at any off-site treatment, storage or disposal site, (v) neither the Company nor any of its subsidiaries, nor to the knowledge of the Company, any principal supplier, manufacturer or contractor of the Company or any of its subsidiaries, is subject to any claim, action, suit, order, demand or notice by any governmental agency or governmental body or person relating to Environmental Laws or Hazardous Substances, (vi) the Company and its subsidiaries have received and are in compliance with all, and have no liability under any, permits, licenses, authorizations, identification numbers or other approvals required under applicable Environmental Laws to conduct their respective businesses, except in each case covered by clauses (i) – (vi) such as would not individually or in the aggregate reasonably be expected to result in a Material Adverse Effect; (b) there are no proceedings that are pending, or to the knowledge of the Company threatened, against the Company or any of its subsidiaries pursuant to any Environmental Laws by a governmental authority, other than such proceedings for which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed; and (c) there are no costs or expenditures (including capital expenditures) under or pursuant to Environmental Laws that would reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company and its subsidiaries. For purposes of this subsection, “Hazardous Substances” means (A) petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and mold, and (B) any other chemical, material or substance defined as toxic or hazardous or as a pollutant, contaminant or waste or words of similar import, or regulated or that can form the basis for liability, under Environmental Laws.
(mm) Technical Information. All technical information set forth in the Registration Statement, the Time of Sale Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, has been reviewed by the Company or independent consultants to the Company and all such information has been prepared in accordance with National Instrument 43-101 — Standards for Disclosure for Mineral Projects (“NI 43-101”) by or under the supervision of a qualified person as defined therein and, in the case of the Registration Statement, the U.S. preliminary prospectus and the U.S. Prospectus, in accordance with Items 1300 — 1305 of Regulation S-K under the Exchange Act; the methods used in estimating the Company’s mineral resources are in accordance with accepted mineral resource estimation practices and the assumptions underlying such resource estimates are reasonable and appropriate; the Company has duly filed with the Canadian Securities Commissions or the Commission, as the case may be, all technical reports required by NI 43-101 or Item 1302 of Regulation S-K of the Exchange Act, as applicable, and all such reports complied at the time thereof in all material respects with the requirements thereof;
| - 17 - |
(nn) Interests in Mineral Properties. (i) With respect to any interests in patented mining claims or private lands, in each case in the United States, owned by the Company or its subsidiaries or in which they hold a contractual interest (including through any option agreement or earn-in agreement) (“Patented Claims”), except as set forth in the Registration Statement (excluding the exhibits thereto), the Time of Sale Prospectus and the Prospectus, the Company or its subsidiaries owns or controls the minerals within or extralateral rights derived from, and owns or controls or has other enforceable legal rights to use the surface of, those Patented Claims as is reasonably sufficient to allow the Company to conduct its business as presently conducted or the exploration activities proposed to be conducted by the Company as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and (ii) all interests in unpatented mining claims, concessions, mining leases, leases of occupation, exploitation or extraction rights, participating interests or other property interests or rights or similar rights in the United States (together with the Patented Claims, “U.S. Mining Claims”) that are held by the Company or any of its subsidiaries are in good standing, are valid and enforceable (provided, however, that with respect to each of the unpatented mining claims owned or leased by the Company or any of its subsidiaries (the “Claims”), the Company represents and warrants only that (A) subject to the paramount title of the United States and the rights of third parties to use of the surface, the Company or its subsidiaries hold the possessory interest therein; (B) to the Company’s knowledge the Claims were properly laid out and monumented on available public domain land open to location by mineral location; (C) to the Company’s knowledge location notices or certificates were timely and properly recorded and filed with the appropriate governmental agencies, and all payments required in connection therewith were timely and properly made; (D) all claim maintenance and related fees have been timely paid as required by law in order to hold the Claims; and (E) all affidavits of assessment of work (from and after October 21, 1979), notices of intent to hold, evidence of payment of claim maintenance fees, and other filings required to maintain the Claims in good standing have been timely and properly recorded or filed with the appropriate governmental agencies, and such U.S. Mining Claims are free and clear of any material liens or charges, and no material royalty is payable in respect of any of them, except, in each instance, as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus), or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; there are no expropriations or similar proceedings or any material challenges to title or ownership, actual or threatened, of which the Company or its subsidiaries has received notice against the U.S. Mining Claims or any part thereof; except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, no other mineral title, surface or other rights are necessary for the conduct of the Company’s business as presently conducted or the exploration activities proposed to be conducted by the Company as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus (and subject to the limitations described therein) or the lack of which rights would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and there are no material restrictions on the ability of the Company and its subsidiaries to use or otherwise exploit any such property rights; except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company or its subsidiaries hold or have a contractual right to acquire all U.S. Mining Claims required by the Company and its subsidiaries to exploit the development potential of the properties of the Company and its subsidiaries for the purposes described in the Registration Statement, the Time of Sale Prospectus and the Prospectus. The Company or its subsidiaries are the holders of all of their respective mineral interests (including mining, exploration or prospecting rights, concessions or licenses, fee interests, or similar interests as applicable in the applicable jurisdiction) located outside of the United States (the “International Mining Claims”), under valid and subsisting title documents, or other recognized and enforceable agreements or instruments, each as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus as being held respectively by them, free and clear of any encumbrances, liens, charges or restrictions, and no material royalty is payable in respect of any such claims, in each case except as set forth in the Registration Statement, the Time of Sale Prospectus and those that would not reasonably be expected to interfere with the exploration of the property or mineral project that is the subject of the International Mining Claims. The Company or its subsidiaries have complied in all material respects with the applicable requirements of the jurisdictions in which the International Mining Claims are located in respect of such claims, including obtaining such licenses and permits, paying such fees and taking such steps as are required to establish and maintain its interest in such claims under applicable rules and regulations, in each case except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
| - 18 - |
(oo) Controls and Procedures.
(i) Disclosure Controls and Procedures. The Company has established and maintains disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that (A) are designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; (B) provide for the periodic evaluation of the effectiveness of such disclosure controls and procedures on a quarterly basis; and (C) are effective in all material respects to perform the functions for which they were established.
(ii) Internal Control Over Financial Reporting and Internal Accounting Controls. The Company maintains (i) effective “internal control over financial reporting” as defined in, and in compliance with, Rules 13a-15 and 15d-15 under the Exchange Act, and (ii) a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(iii) No Material Weakness in Internal Controls. Since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness (as defined in Rule 1-02 of Regulation S-X) in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of (x) any significant deficiency in the design or operation of its internal control over financial reporting which is reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in its internal controls since the end of the Company’s most recent audited fiscal year; or (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls.
| - 19 - |
(pp) Off-Balance Sheet Transactions. Except as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus, there are no off-balance sheet transactions (including, without limitation, transactions related to, and the existence of, “variable interest entities” within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 810), arrangements, obligations (including contingent obligations), or any other relationships with unconsolidated entities or other persons, that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
(qq) Sarbanes-Oxley. The Company is, and after giving effect to the offering and sale of the Shares will be, in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder that are applicable to the Company as an “emerging growth company” as defined in Section 2(a)(19) of the Act (an “Emerging Growth Company”) and a “smaller reporting company”.
(rr) Accurate Disclosure. The statements included in the Registration Statement, the Time of Sale Prospectus and the Prospectus under the captions “Certain U.S. Federal Income Tax and Estate Tax Consequences to Non-U.S. Holders,” “Canadian Federal Income Tax Consequences for Canadian Holders,” “Description of Capital Stock,” “Shares Eligible for Future Sale,” and “Underwriting,” and the statements in the Registration Statement under Items 14 and 15 thereof, insofar as such statements contain descriptions of the terms of statutes, rules, regulations or legal or governmental proceedings, or contracts or other documents, are fair and accurate in all material respects.
(ss) Licenses and Permits. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Company and its Material Subsidiaries hold, and are operating in compliance with, such permits, licenses, franchises, registrations, exemptions, approvals, authorizations and clearances of any governmental authorities required for the conduct of their business as currently conducted (collectively, the “Permits”), and all such Permits are in full force and effect; and (ii) the Company and its Material Subsidiaries have fulfilled and performed all of their obligations with respect to the Permits, and, to the Company’s knowledge, no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights of the holder of any Permit. The Company and its subsidiaries have not received any notification, correspondence or any other written or oral communication, including notification of any pending or, to the Company’s knowledge, threatened claim, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental authority of potential or actual material non-compliance by, or material liability of, the Company or a Material Subsidiary under any Permits. To the Company’s knowledge, there are no facts or circumstances that would reasonably be expected to give rise to any material liability of the Company or a Material Subsidiary under any Permits.
| - 20 - |
(tt) Emerging Growth Company Status. From the time of initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any Person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an Emerging Growth Company.
(uu) Testing-the-Waters Communications. The Company (i) has not engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act or, if the Testing-the-Waters Communications were made in Canada, individuals and entities that have been identified by the Underwriters as being, or that otherwise to the knowledge of the Company are, accredited investors within the meaning of NI 41-101 and (ii) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications and has not engaged in any Testing-the-Waters Communications in Canada in the 15 days prior to the date of the Canadian Preliminary Prospectus. The Company has not distributed or approved for distribution any Written Testing-the-Waters Communications other than those listed on Schedule III hereto. Each Written Testing-the-Waters Communication listed on Schedule III hereto did not, as of the Applicable Time, and at all times through the completion of the public offer and sale of the Shares will not, include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement, the Time of Sale Prospectus or the Prospectus.
(vv) Confidential Submission of Registration Statement. The Company has filed publicly on EDGAR at least 15 calendar days prior to any “road show” (as defined in Rule 433 under the Act), any confidentially submitted registration statement and registration statement amendments relating to the offer and sale of the Shares.
(ww) No Rating. Neither the Company nor any of its subsidiaries has debt securities or preferred stock that is rated by any “nationally recognized statistical rating organization” (as such term is defined in Section 3(a)(62) of the Exchange Act).
(xx) No Broker’s Fees. The Company is not a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.
(yy) Canadian Securities Commissions. None of the Canadian Securities Commissions, nor comparable Canadian authority, has issued any order: (i) requiring trading in any of the Company’s securities to cease, (ii) preventing or suspending the use of the Time of Sale Prospectus and the Prospectus, or (iii) preventing the distribution of the Shares in any province or territory of Canada. The Company has not been informed that any such proceedings have been instituted for that purpose and, to the knowledge of the Company, no such proceedings are pending or contemplated.
| - 21 - |
(zz) Insolvency. No event of insolvency has occurred in relation to the Company or its subsidiaries, nor is there, nor will there be at the Closing Date, any act which has occurred or, to the best of the Company’s knowledge, is anticipated to occur which is likely to result in an event of insolvency in relation to the Company or its subsidiaries.
(aaa) Cybersecurity. (i)(x) Except as disclosed in the Registration Statement, the Time of Sale Prospectus and the Prospectus, to the Company’s knowledge, there has been no security breach or other compromise of or relating to any of the Company’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and (y) the Company has not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data, except as would not, in the case of this clause (i), individually or in the aggregate, have a Material Adverse Effect; (ii) the Company is presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, in the case of this clause (ii), individually or in the aggregate, have a Material Adverse Effect; (iii) the Company has implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company has implemented commercially reasonable backup and disaster recovery technology consistent with industry standards and practices.
4. Agreements of the Company. The Company agrees with each Underwriter as follows:
(a) Amendments and Supplements to Registration Statement. The Company shall not, either prior to any effective date of the Registration Statement or thereafter during such period as the Prospectus is required under the Act to be delivered (whether physically or through compliance with Rule 172 of the Rules and Regulations or any similar rule) (the “Prospectus Delivery Period”) in connection with sales of the Shares by an Underwriter or dealer, amend or supplement the Registration Statement, the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communications, unless a copy of such amendment or supplement thereof shall first have been submitted to the Representatives within a reasonable period of time prior to the filing or, if no filing is required, the use thereof and the Representatives shall not have objected thereto in good faith.
| - 22 - |
(b) Amendments and Supplements to the Registration Statement, the Time of Sale Prospectus, and the Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event or development shall occur or condition exist as a result of which the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communication as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if it shall be necessary to amend or supplement the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communication in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if in the opinion of the Representatives it is otherwise necessary to amend or supplement the Registration Statement, the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communication, or to file a new registration statement containing the Prospectus, in order to comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules, including in connection with the delivery of the Prospectus, the Company agrees to (i) promptly notify the Representatives of any such event or condition and (ii) promptly prepare (subject to Section 4(a) and 4(f) hereof), file with the Commission and the Canadian Securities Commissions (and use its reasonable best efforts to have any amendment to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the Underwriters (and, if applicable, to dealers), amendments or supplements to the Registration Statement, the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communication, or any new registration statement, necessary in order to make the statements in the Time of Sale Prospectus, the Prospectus or the applicable Written Testing-the-Waters Communication as so amended or supplemented, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading or so that the Registration Statement, the Time of Sale Prospectus, the Prospectus or the applicable Written Testing-the-Waters Communication, as amended or supplemented, will comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules, Canadian Securities Laws or any other applicable law.
(c) Notifications to the Representatives. The Company shall use its reasonable best efforts to cause the Registration Statement to become effective, and shall notify the Representatives promptly and shall confirm such advice in writing, (i) when any post-effective amendment to the Registration Statement has become effective or when a receipt has been issued for any supplement or amendment to any Canadian Prospectus, (ii) of any request by the Commission or the Canadian Securities Commissions for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the commencement by the Commission, the Canadian Securities Commissions or by any state securities commission of any proceedings for the suspension of the qualification of any of the Shares for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose, including, without limitation, the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or the threat thereof, (iv) of the happening of any event during the Prospectus Delivery Period that in the judgment of the Company makes any statement of material fact made in the Registration Statement, the Prospectus or any Written Testing-the-Waters Communication misleading (including by omission) or untrue or that requires the making of any changes in the Registration Statement, the Prospectus or any Written Testing-the-Waters Communication in order to make the statements of material fact therein, in light of the circumstances in which they are made, not misleading, (v) of receipt by the Company or any representative of the Company of any other communication from the Commission or the Canadian Securities Commissions relating to the Company, the Registration Statement, any preliminary prospectus, the Canadian Preliminary Prospectus, the Prospectus or any Written Testing-the-Waters Communication and (vi) of any distribution of Written Testing-the-Waters Communication by or on behalf of the Company (other than through any Underwriter). If at any time the Commission shall issue any order suspending the effectiveness of the Registration Statement, the Company shall use reasonable best efforts to obtain the withdrawal of such order at the earliest possible moment. The Company shall comply with the provisions of and make all requisite filings with the Commission pursuant to Rules 424(b), 430A, 430B, 430C and 462(b) of the Rules and Regulations and notify the Representatives promptly of all such filings.
| - 23 - |
(d) Executed Registration Statement. The Company shall furnish to the Representatives, without charge, for transmittal to each of the other Underwriters, two facsimile signed copies of the Registration Statement and of any post-effective amendment thereto, including financial statements, excluding all exhibits thereto, and shall furnish to the Representatives, without charge, for transmittal to each of the other Underwriters, a copy of the Registration Statement and any post-effective amendment thereto, including financial statements.
(e) Undertakings. The Company shall comply with all the provisions of any undertakings contained and required to be contained in the Registration Statement.
(f) Permitted Free Writing Prospectuses. The Company represents and agrees that it has not made and, unless it obtains the prior consent of the Representatives, will not make, any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and Regulations, required to be filed with the Commission or retained by the Company under Rule 433 of the Rules and Regulations; provided that the prior written consent of the Representatives hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses included in Schedule II hereto. Any such free writing prospectus consented to by the Representatives is herein referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement relating to the Shares or would include an untrue statement of material fact or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement, or omission. The Company represents that it has satisfied the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.
| - 24 - |
(g) U.S. Prospectus. The Company shall prepare the U.S. Prospectus in a form approved by the Representatives and shall file such U.S. Prospectus with the Commission pursuant to Rule 424(b) of the Rules and Regulations with a filing date not later than the second business day following the execution and delivery of this Agreement. Promptly after the effective date of the Registration Statement, and thereafter from time to time, the Company shall deliver to each of the Underwriters, without charge, as many copies of the U.S. Prospectus and any amendment or supplement thereto as the Representatives may reasonably request. The Company consents to the use of the U.S. Prospectus and any amendment or supplement thereto by the Underwriters and by all dealers to whom the Shares may be sold, both in connection with the offering or sale of the Shares and for any period of time thereafter during the Prospectus Delivery Period. If, during the Prospectus Delivery Period any event shall occur that in the judgment of the Company or counsel to the Underwriters should be set forth in the U.S. Prospectus in order to make any statement of a material fact therein, in the light of the circumstances under which it was made, not misleading (including by omission), or if it is necessary to supplement or amend the U.S. Prospectus to comply with law, the Company shall forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and shall deliver to each of the Underwriters, without charge, such number of copies thereof as the Representatives may reasonably request.
(h) Canadian Supplemental Prospectus. The Company shall prepare the Canadian Supplemental Prospectus in a form approved by the Representatives and shall file with the BCSC and the other Canadian Securities Commissions with a filing date not later than the second business day following the execution and delivery of this Agreement. Promptly after the effective date of the Registration Statement, and thereafter from time to time, the Company shall deliver to each of the Underwriters, without charge, as many copies of the Canadian Supplemental Prospectus and any amendment or supplement thereto as the Representatives may reasonably request. The Company consents to the use of the Canadian Supplemental Prospectus and any amendment or supplement thereto by the Underwriters and by all dealers to whom the Shares may be sold, both in connection with the offering or sale of the Shares and for any period of time thereafter during the Prospectus Delivery Period. If, during the Prospectus Delivery Period any event shall occur that in the judgment of the Company or counsel to the Underwriters should be set forth in the Canadian Supplemental Prospectus in order to make any statement therein, in the light of the circumstances under which it was made, not misleading (including by omission), or if it is necessary to supplement or amend the Canadian Supplemental Prospectus to comply with law, the Company shall forthwith prepare and duly file with the BCSC and the other Canadian Securities Commissions an appropriate supplement or amendment thereto, and shall deliver to each of the Underwriters, without charge, such number of copies thereof as the Representatives may reasonably request.
(i) Canadian Marketing Materials. During the distribution of the Shares: (i) to prepare, in consultation with the Representatives, any “marketing materials” (as such term is defined in NI 41-101) (“Canadian Marketing Materials”), including any template version thereof, to be provided to potential investors in the Shares, and approve in writing any such Canadian Marketing Materials (including any template version thereof), as may reasonably be requested by the Underwriters, such marketing materials to comply with Canadian Securities Laws and to be acceptable in form and substance to the Company and the Underwriters and their respective counsel, acting reasonably; and (ii) the Representatives shall, on behalf of the Underwriters, approve in writing any such Canadian Marketing Materials, as contemplated by Canadian Securities Laws and shall not use any such Canadian Marketing Materials until such time as the Company confirms in writing that such Canadian Marketing Materials have been approved and filed in accordance with NI 41-101.
| - 25 - |
(j) The Company and each Underwriter, on a several basis, covenants and agrees that, during the distribution of the Shares, it will not provide any potential investor with any materials or information in relation to the distribution of the Shares or the Company other than the Prospectuses and any amendments or supplements thereto in accordance with this Agreement or materials prepared in accordance with Section 4(i), provided that: (A) any such materials that constitute marketing materials have been approved and delivered in accordance with Section 4(i); and (B) any such materials that constitute standard term sheets have been approved in writing by the Company and the Representatives and are provided in compliance with Canadian Securities Laws.
(k) Notwithstanding Section 4(i) and 4(j), following the approval and delivery of a template version of marketing materials in accordance with Section 4(i), the Underwriters may provide a “limited-use version” (as such term is defined in NI 41-101) of such template version to potential investors in the Shares in accordance with Canadian Securities Laws.
(l) Compliance with Blue Sky Laws. Prior to any public offering of the Shares by the Underwriters, the Company shall cooperate with the Representatives and counsel to the Underwriters in connection with the registration or qualification (or the obtaining of exemptions from the application thereof) of the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives may request, including, without limitation, the provinces and territories of Canada and other jurisdictions outside of the United States in which the Underwriters will make offers or sales of the Shares; provided, however, that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general service of process in any jurisdiction where it is not now so subject.
(m) Delivery of Financial Statements. During the period of two years commencing on the effective date of the Registration Statement applicable to the Underwriters, the Company shall furnish to the Representatives and each other Underwriter who may so request copies of such financial statements and other periodic and special reports as the Company may from time to time distribute generally to the holders of any class of its capital stock, and will furnish to the Representatives and each other Underwriter who may so request a copy of each annual or other report it shall be required to file with the Commission; provided, however, that electronically transmitted copies filed with the Commission pursuant to EDGAR or the Canadian Securities Commissions pursuant to SEDAR shall satisfy the Company’s obligation to furnish copies hereunder.
(n) Availability of Earnings Statements. The Company shall make generally available to holders of its securities as soon as may be practicable but in no event later than the last day of the fifteenth full calendar month following the calendar quarter in which the most recent effective date occurs in accordance with Rule 158 of the Rules and Regulations, an earnings statement (which need not be audited but shall be in reasonable detail) for a period of 12 months ended commencing after the effective date of the Registration Statement, and satisfying the provisions of Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
| - 26 - |
(o) Payment of Expenses. Whether or not any of the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid, or reimburse if paid by the Representatives, all costs and expenses incident to the performance of the obligations of the Company under this Agreement, including but not limited to: (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Shares and any Stamp Tax or other taxes payable in connection therewith, (ii) the costs incident to the preparation, printing and filing under the Act of the Registration Statement and exhibits to it, each preliminary prospectus, each Permitted Free Writing Prospectus, the Time of Sale Prospectus, the Prospectus, the Canadian Supplemented Prospectus, each Written Testing-the-Waters Communications, if any, and any amendment or supplement to the Registration Statement, the Prospectus or any Written Testing-the-Waters Communication, and the distribution thereof, (iii) the costs of preparing, printing and delivering certificates representing the Shares, if any, (iv) the costs of producing and delivering this Agreement, the Agreement Among Underwriters and any other related documents in connection with the offering, purchase, sale and delivery of the Shares, (v) the costs of furnishing (including costs of shipping, mailing and courier) such copies of the Registration Statement, the Prospectus, the Canadian Supplemented Prospectus, any preliminary prospectus, any Permitted Free Writing Prospectus and any Written Testing-the-Waters Communication, and all amendments and supplements thereto, as may be requested for use in connection with the offering and sale of the Shares by the Underwriters or by dealers to whom Shares may be sold, (vi) the costs, fees and expenses of listing the Shares on the NYSE American and the TSX, (vii) the filing fees incident to, and the fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Shares, (viii) the fees and expenses incident to the registration or qualification of the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions designated pursuant to Section 4(f) hereof and the securities laws of Canada, including the fees, disbursements and other charges of counsel to the Underwriters in connection therewith, and, if requested by the Representatives, the preparation and printing of preliminary, supplemental and final Blue Sky memoranda; provided, however, that the Company shall not be required to pay or reimburse the Underwriters for fees and disbursements of counsel to the Underwriters in excess of and aggregate of $30,000 in connection with clauses (vii) and (viii), (ix) the fees and expenses of counsel to the Company, (x) the costs and charges of DTC and the transfer agent for the Shares, (xi) the fees and expenses of the Accountants, (xii) the costs and expenses of the Company relating to investor presentations on any “road show” or any Testing-the-Waters Communication, undertaken in connection with the marketing of the Shares, including, without limitation, all costs and expenses associated with any electronic road show, travel and lodging expenses of the officers, employees, agents and other representatives of the Company and consultants engaged in connection with investor presentations, and the cost of any aircraft and other transportation chartered in connection with the road show (provided, that the Company shall pay 50% of the cost of any such aircraft and the Underwriters shall pay 50% of the cost of any such aircraft), and (xiii) all fees, costs and expenses for consultants used by the Company in connection with the offering. All payments to be made by the Company hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Company shall pay such additional amounts as may be necessary in order that the net amounts received by the Underwriters after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made. Except as provided in this Section 4(o) and in Section 4(p), the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel.
| - 27 - |
(p) Reimbursement of Expenses upon Termination of Agreement. If this Agreement shall be terminated by the Company pursuant to any of the provisions hereof or if for any reason the Company shall be unable to perform its obligations or to fulfill any conditions hereunder or if the Underwriters shall terminate this Agreement pursuant to Section 7 hereof, the Company shall reimburse the Underwriters for all documented out-of-pocket expenses (including the fees, disbursements and other charges of counsel to the Underwriters) reasonably incurred by them in connection herewith; provided, however, that the Company shall not be obligated to reimburse the expenses of any defaulting Underwriter under Section 8 hereof.
(q) No Stabilization or Manipulation. The Company shall not at any time, directly or indirectly, take any action intended to cause or result in, or which might reasonably be expected to cause or result in, or which will constitute, stabilization or manipulation, under the Act or Canadian Securities Laws or otherwise, of the price of the shares of Common Stock to facilitate the sale or resale of any of the Shares.
(r) Use of Proceeds. The Company shall apply the net proceeds from the offering and sale of the Shares to be sold by the Company in the manner set forth in the Time of Sale Prospectus and the Prospectus under “Use of Proceeds” and shall file such reports with the Commission with respect to the sale of the Shares and the application of the proceeds therefrom as may be required in accordance with Rule 463 under the Act.
| - 28 - |
(s) Lock-Up Agreements of Company, Management, Affiliates and Equityholders. The Company shall not, for a period of 180 days after the date of the Prospectus (the “Lock-Up Period”), without the prior written consent of each of the Representatives (which consent may be withheld in their sole discretion), (1) offer, sell, pledge, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition), directly or indirectly, or file with the Commission a registration statement under the Act to register, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or warrants or other rights to acquire shares of Common Stock or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic benefits or risks of ownership of such shares of Common Stock, securities, warrants or other rights to acquire Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, or publicly disclose the intention to enter into any transaction described in clause (1) or (2) above. The foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the Registration Statement, Time of Sale Prospectus and the Prospectus, (C) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to employee benefit plans of the Company referred to in the Registration Statement, Time of Sale Prospectus and the Prospectus, (D) the filing of a registration statement on Form S-8 relating to Common Stock granted pursuant to employee benefit plans of the Company referred to in the Registration Statement, Time of Sale Prospectus and the Prospectus, (E) Common Stock or any securities convertible into, or exercisable, or exchangeable for, Common Stock issued, sold or delivered in connection with any acquisition or strategic investment (including any joint venture, strategic alliance or partnership) as long as (x) the aggregate number of Common Stock issued or issuable does not exceed 2% of the number of Common Stock outstanding immediately after the completion of the offering of the Common Stock contemplated herein, and (y) each recipient of any such shares or other securities executes a lock-up agreement restricting the resale of such securities in the form executed by each of the executive officers and directors of the Company for the remainder of the 180-day restricted period contemplated thereby and (F) facilitating the establishment of a trading plan on behalf of a shareholder, officer or director of the Company pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock, provided that (i) such plan does not provide for the transfer of Common Stock during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the Company regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Common Stock may be made under such plan during the Lock-Up Period. The Company has caused each of its officers, directors and beneficial owners of 1% or more its capital stock, as well as substantially all other beneficial owners of its capital stock (including stockholders, option holders and other equityholders) to enter into agreements with the Representatives in the form set forth in Exhibit A.
(t) Lock-Up Releases. If each of the Representatives, in their sole discretion, agree to release or waive the restrictions set forth in a lock-up letter described in Section 5(j) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of such release or waiver.
(u) Emerging Growth Company Status. The Company shall promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) the time when a prospectus relating to the offering or sale of the Shares is not required by the Act to be delivered (whether physically or through compliance with Rule 172 of the Rules and Regulations or any similar rule) and (ii) completion of the Lock-Up Period.
(s) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares in the United States and Canada.
| - 29 - |
5. Conditions of the Obligations of the Underwriters. The obligation of each Underwriter to purchase the Firm Shares on the Closing Date or any Option Shares on the Option Closing Date, as the case may be, as provided herein is subject to the accuracy of the representations and warranties of the Company, the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:
(a) Post Effective Amendments and Prospectus Filings. Notification that the Registration Statement has become effective shall be received by the Representatives not later than 6:00 p.m., New York City time, on the date of this Agreement or at such later date and time as shall be consented to in writing by the Representatives and all filings made pursuant to Rules 424, 430A, 430B or 430C of the Rules and Regulations, as applicable, shall have been made or will be made prior to the Closing Date in accordance with all such applicable rules.
(b) No Stop Orders, Requests for Information and No Amendments. (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall be pending or, to the knowledge of the Company, shall be threatened by the Commission, (ii) no order suspending the qualification or registration of the Shares under the securities or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such purpose shall be pending before or, to the knowledge of the Company, threatened or contemplated by the authorities of any such jurisdiction, (iii) any request for additional information on the part of the staff of the Commission or the Canadian Securities Commissions or any such authorities shall have been complied with to the satisfaction of the staff of the Commission or the Canadian Securities Commissions or such authorities, as applicable and (iv) after the date hereof no amendment or supplement to the Registration Statement or the Prospectus shall have been filed unless a copy thereof was first submitted to the Representatives and the Representatives did not object thereto in good faith, and the Representatives shall have received certificates, dated the Closing Date and any Option Closing Date and signed by the Chief Executive Officer or the Chairman of the Board of Directors and the Chief Financial Officer of the Company (who may, as to proceedings threatened, rely upon the best of their information and belief), to the effect of clauses (i), (ii) and (iii).
(c) No Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement, the Time of Sale Prospectus and the Prospectus, except as set forth in the Registration Statement, the Time of Sale Prospectus and the Prospectus (i) there shall not have been a Material Adverse Change, (ii) the Company shall not have incurred any material liabilities or obligations, direct or contingent, (iii) the Company shall not have entered into any material transactions not in the ordinary course of business other than pursuant to this Agreement and the transactions referred to herein, (iv) the Company shall not have issued any securities (other than the Shares) or declared or paid any dividend or made any distribution in respect of its capital stock of any class or debt (long-term or short-term), and (v) no material amount of the assets of the Company shall have been pledged, mortgaged or otherwise encumbered.
(d) No Actions, Suits or Proceedings. Since the respective dates as of which information is given in the Registration Statement, the Time of Sale Prospectus and the Prospectus, there shall have been no actions, suits or proceedings instituted, or to the Company’s knowledge, threatened against, the Company, its subsidiaries or any of their respective officers in their capacity as such, before or by any federal, provincial, state or local court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign, except where the actions, suits or proceedings would not, individually or in the aggregate, have a Material Adverse Effect.
| - 30 - |
(e) All Representations True and Correct and All Conditions Fulfilled. Each of the representations and warranties of the Company contained herein shall be true and correct at the Closing Date as if made at the Closing Date and any Option Closing Date, as the case may be, and all covenants and agreements contained herein to be performed by the Company and all conditions contained herein to be fulfilled or complied with by the Company at or prior to the Closing Date and any Option Closing Date, shall have been duly performed, fulfilled or complied with.
(f) Opinions of Counsel to the Company. The Representatives shall have received the opinions and letters, each dated the Closing Date and any Option Closing Date, as the case may be, reasonably satisfactory in form and substance to counsel for the Underwriters, from (i) Reed Smith LLP, U.S. counsel to the Company, to the effect set forth in Exhibit C and (ii) Stikeman Elliot LLP, Canadian counsel to the Company, to the effect set forth in Exhibit D.
(g) Opinion of Counsel to the Underwriters. The Representatives shall have received (i) an opinion and negative assurance letter, each dated the Closing Date and any Option Closing Date, from Paul, Weiss, Rifkind, Wharton & Garrison LLP, U.S. counsel to the Underwriters, and (ii) an opinion, dated the Closing Date and any Option Closing Date, from Bennett Jones LLP, Canadian counsel to the Underwriters, in each case with respect to the Registration Statement, the Prospectus and this Agreement, which opinions and letters shall each be satisfactory in all respects to the Representatives.
(h) Title Opinions. The Representatives shall have received favorable title opinions, each dated the Closing Date and any Option Closing Date, from [●], with respect to the Company’s title to and ownership of certain of the Mining Claims, in form and substance reasonably satisfactory to the Representatives.
(i) Accountants’ Comfort Letter. On the date of this Agreement, the Representatives shall have received from the Accountants a letter dated the date of its delivery, addressed to the Underwriters (or to the Representatives on behalf of the Underwriters), in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus. At the Closing Date and any Option Closing Date, as the case may be, the Representatives shall have received from the Accountants a letter dated such date, in form and substance reasonably satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to the preceding sentence and have conducted additional procedures with respect to certain financial figures included in the Prospectus, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date or any Option Closing Date, as the case may be.
| - 31 - |
(j) Officers’ Certificates. At the Closing Date and any Option Closing Date, as the case may be, there shall be furnished to the Representatives an accurate certificate, dated the date of its delivery, signed by each of the Chief Executive Officer and the Chief Financial Officer of the Company, in form and substance satisfactory to the Representatives, to the effect that:
(i) each signer of such certificate has examined the Registration Statement, Time of Sale Prospectus and the Prospectus;
(ii) since the respective dates as of which information is given in the Registration Statement, the Time of Sale Prospectus and the Prospectus there has not been a Material Adverse Change;
(iii) each of the representations and warranties of the Company and its subsidiaries contained in this Agreement are, at the time such certificate is delivered, true and correct; and
(j) each of the covenants required herein to be performed by the Company on or prior to the date of such certificate has been duly, timely and fully performed and each condition herein required to be complied with by the Company on or prior to the delivery of such certificate has been duly, timely and fully complied with.
(k) Stock Exchange Listing. The Shares shall have been (i) duly authorized for listing or quotation on the NYSE American, subject only to notice of issuance and (ii) conditionally approved for listing and posting for trading on the TSX, subject only to the satisfaction by the Company of customary conditions imposed by the TSX in similar circumstances.
(l) Lock-Up Agreements. At the date of this Agreement, the Representatives shall have received the executed “lock-up” agreements referred to in Section 4(s) hereof from the Company’s officers, directors and beneficial owners (including stockholders, option holders and other equityholders) owning in the aggregate substantially all of the Company’s fully diluted capital stock.
(m) Company Certificates. The Company shall have furnished to the Representatives such certificates, in addition to those specifically mentioned herein, as the Representatives may have reasonably requested as to the accuracy and completeness at the Closing Date and any Option Closing Date of any statement in the Registration Statement, the Time of Sale Prospectus, the Prospectus or any Written Testing-the-Waters Communication, as to the accuracy at the Closing Date and any Option Closing Date of the representations and warranties of the Company herein, as to the performance by the Company of its obligations hereunder, or as to the fulfillment of the conditions concurrent and precedent to the obligations hereunder of the Underwriters.
(n) No Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Shares.
| - 32 - |
If any of the conditions hereinabove provided for in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representatives by notifying the Company of such termination in writing at or prior to the Closing Date or any Option Closing Date, as the case may be.
6. Indemnification.
(a) Indemnification of the Underwriters. The Company shall indemnify and hold harmless each Underwriter, its affiliates, the directors, officers and employees of each Underwriter and each person, if any, who controls each Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses and damages (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), to which they, or any of them, may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based on (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any information deemed to be a part thereof pursuant to Rules 430A, 430B or 430C, as applicable or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any preliminary prospectus supplement, any Issuer Free Writing Prospectus, Time of Sale Prospectus, Canadian Final Prospectus, the Prospectus or any Written Testing-the-Waters Communication (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) any untrue statement or alleged untrue statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Shares, including any road show or investor presentations made to investors by the Company (whether in person or electronically) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company shall not be liable to the extent that such loss, claim, liability, expense or damage arises from the sale of the Shares in the public offering to any person by an Underwriter and is based on an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with Underwriters’ Information. This indemnity agreement will be in addition to any liability that the Company might otherwise have.
(b) Indemnification of the Company. Each Underwriter shall, severally and not jointly, indemnify and hold harmless the Company, its affiliates, directors, officers and employees and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only insofar as losses, claims, liabilities, expenses or damages arise out of or are based on any untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with Underwriters’ Information. This indemnity will be in addition to any liability that each Underwriter might otherwise have.
| - 33 - |
(c) Indemnification Procedures. Any party that proposes to assert the right to be indemnified under this Section 6 shall, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 6, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party under the foregoing provisions of this Section 6 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) the indemnified party has reasonably concluded that a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel shall be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such reasonable fees, disbursements and other charges shall be reimbursed by the indemnifying party promptly as they are incurred upon receipt of documented notice thereof. An indemnifying party shall not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 6 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 45 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
| - 34 - |
(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 6 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Underwriters, the Company and the Underwriters shall contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Underwriters, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Underwriters may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or Representatives on behalf of the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were to be determined by pro rata allocation or by any other method of allocation (even if the Underwriters were treated as one entity for such purpose) which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred to above in this Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received by it, and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligation to contribute as provided in this Section 6(d) are several in proportion to their respective underwriting obligations and not joint. For purposes of this Section 6(d), any person who controls a party to this Agreement within the meaning of the Act will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, and each affiliate, director, officer or employee of any Underwriter will have the same rights to contribution as such Underwriter, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 6(d), will notify any such party or parties from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 6(d). No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not be unreasonably withheld).
| - 35 - |
(e) Survival. The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii) any termination of this Agreement.
7. Termination. The obligations of the several Underwriters under this Agreement may be terminated at any time prior to the Closing Date (or, with respect to the Option Shares, on or prior to any Option Closing Date), by notice to the Company from the Representatives, without liability on the part of any Underwriter to the Company, if, prior to delivery and payment for the Firm Shares (or the Option Shares, as the case may be), in the sole judgment of the Representatives, any of the following shall occur:
(a) trading of any securities of the Company shall have been suspended or limited on the NYSE American or the TSX;
(b) trading generally shall have been suspended or limited on or by, as the case may be, any “national securities exchange” (as defined in the Exchange Act), or minimum or maximum prices shall have been generally established on any such exchange, or additional material governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon trading in securities generally by any such exchange or by order of the Commission, any Canadian Securities Commission or any court or other governmental authority;
(c) a general banking moratorium shall have been declared by any of United States federal, New York or New York authorities or by Canadian federal authorities;
| - 36 - |
(d) the United States or Canada shall have become engaged in new hostilities, there shall have been an escalation in hostilities involving the United States or Canada or there shall have been a declaration of a national emergency or war by the United States or Canada or there shall have occurred such a material adverse change in general economic, political or financial conditions, including, without limitation, as a result of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States or Canada shall be such), or any other calamity or crisis shall have occurred, the effect of any of which is such as to make it impracticable or inadvisable to market the Shares on the terms and in the manner contemplated by the Prospectus;
(e) the Company shall have sustained a loss material or substantial to the Company by reason of flood, fire, accident, hurricane, earthquake, theft, sabotage, natural disaster, disease outbreak or other calamity or malicious act, whether or not such loss shall have been insured, the effect of any of which is such as to make it impracticable or inadvisable to market the Shares on the terms and in the manner contemplated by the Prospectus; or
(f) there shall have been a Material Adverse Change.
8. Substitution of Underwriters. If any one or more of the Underwriters shall fail or refuse to purchase any of the Firm Shares which it or they have agreed to purchase hereunder, and the aggregate number of Firm Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of Firm Shares, the other Underwriters shall be obligated, severally, to purchase the Firm Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase, in the proportions which the number of Firm Shares which they have respectively agreed to purchase pursuant to Section 1 hereof bears to the aggregate number of Firm Shares which all such non-defaulting Underwriters have so agreed to purchase, or in such other proportions as the Representatives may specify; provided that in no event shall the maximum number of Firm Shares which any Underwriter has become obligated to purchase pursuant to Section 1 hereof be increased pursuant to this Section 8 by more than one-tenth of the number of Firm Shares agreed to be purchased by such Underwriter without the prior written consent of such Underwriter. If any Underwriter or Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate number of Firm Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase exceeds one-tenth of the aggregate number of the Firm Shares and arrangements satisfactory to the Company and the Representatives for the purchase of such Firm Shares are not made within 48 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter, or the Company for the purchase or sale of any Shares under this Agreement. In any such case either the Representatives or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken pursuant to this Section 8 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
| - 37 - |
9. Miscellaneous.
(a) Relationship with TMX Group Limited. Each of [●] and [●], or an affiliate thereof, owns or controls an equity interest in TMX Group Limited (the “TMX Group”) and has a nominee director serving on the TMX Group’s board of directors. As such, each such investment dealer may be considered to have an economic interest in the listing of securities on any exchange owned or operated by TMX Group, including the TSX. No person or company is required to obtain products or services from TMX Group or its affiliates as a condition of any such dealer supplying or continuing to supply a product or service.
(b) Notices. Notice given pursuant to any of the provisions of this Agreement shall be in writing and, unless otherwise specified, shall be mailed, hand delivered or telecopied (a) if to the Company, at the office of the Company, 606 – 999 Canada Place, Vancouver, BC V6C 3E1, Canada, Attention: Robert Friedland or (b) if to the Underwriters, c/o BMO Capital Markets Corp., 151 W 42nd St., New York, New York 10036, Attention: Legal Department (Fax: (212) 702-1205); Jefferies LLC, 520 Madison Avenue, New York, New York 10022; Attention: [●]; and J.P. Morgan Securities LLC, 383 Madison Avenue, New York, NY 10179, Attn: Equity Syndicate Desk, Fax: (212) 622-8358. Any such notice shall be effective only upon receipt.
(c) No Third Party Beneficiaries. This Agreement has been and is made solely for the benefit of the several Underwriters, the Company and to the extent provided in Section 6 hereof, the controlling persons, affiliates, directors, officers, and employees, referred to in Section 6 hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” as used in this Agreement shall not include a purchaser of Shares from the Underwriters in his, her or its capacity as such a purchaser.
(d) Survival of Representations and Warranties. All representations, warranties and agreements of the Company contained herein or in certificates or other instruments delivered pursuant hereto shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any of their controlling persons and shall survive delivery of and payment for the Shares hereunder.
(e) Disclaimer of Fiduciary Relationship. The Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement, including the determination of the public offering price of the Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters, on the other hand, (ii) in connection with the offering contemplated by this Agreement and the process leading to such transaction, each of the Underwriters is and has been acting solely as a principal and is not the agent or fiduciary of the Company or its securityholders, creditors, employees or any other party, (iii) none of the Underwriters has assumed nor will it assume any advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Shares contemplated by this Agreement or the process leading thereto (irrespective of whether any Underwriter or its affiliates has advised or is currently advising the Company on other matters) and the Underwriters have no obligation to the Company with respect to the offering of the Shares contemplated by this Agreement except the obligations expressly set forth in this Agreement, (iv) each of the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated by this Agreement and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
| - 38 - |
(f) Recognition of U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any interest and obligation in or under this Agreement, were governed by the laws of the United States or a state of the United States. In the event that any Underwriter that is a Covered Entity or a Covered Affiliate of any such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. As used in this section: (i) “Covered Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (ii) “Covered Entity” means any of the following: (A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b), (B) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b) or (C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (iv) “U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
(g) Actions of the Representatives. Any action by the Underwriters hereunder may be taken by the Representatives on behalf of the Underwriters, and any such action taken by the Representatives shall be binding upon the Underwriters.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. Each, party hereto hereby irrevocably submits for purposes of any action arising from this Agreement brought by the other party hereto to the jurisdiction of the courts of New York State located in the Borough of Manhattan and the U.S. District Court for the Southern District of New York.
(i) Counterparts. This Agreement may be signed in two or more counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
(j) Survival of Provisions Upon Invalidity of Any Single Provision. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
| - 39 - |
(k) Waiver of Jury Trial. The Company and the Underwriters each hereby irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.
(l) Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience and reference only and are not to be considered in construing this Agreement.
(m) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may not be amended or otherwise modified or any provision hereof waived except by an instrument in writing signed by the Representatives and the Company.
[Signature page follows]
| - 40 - |
Please confirm that the foregoing correctly sets forth the agreement between the Company and the several Underwriters.
| Very truly yours, | ||
| Ivanhoe Electric Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Confirmed as of the date first above mentioned: | ||
| BMO Capital Markets Corp. | ||
| Jefferies LLC | ||
| Acting on behalf of themselves and as Representatives of the several Underwriters named in Schedule I hereof | ||
| BMO Capital Markets Corp. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Jefferies LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
Schedule I
| Underwriter | Number of | |||
| BMO Capital Markets Corp. | [●] | |||
| Jefferies LLC | [●] | |||
| J.P. Morgan Securities LLC | [●] | |||
| Raymond James & Associates, Inc. | [●] | |||
| RBC Capital Markets, LLC | [●] | |||
| Scotia Capital (USA) Inc. | [●] | |||
| Total | [●] |
| S-I-1 |
Schedule II
ISSUER FREE WRITING PROSPECTUSES:
None
| S-II-1 |
Schedule III
WRITTEN TESTING-THE-WATERS COMMUNICATIONS:
None.
| S-III-1 |
Schedule IV
| 1. | The initial public offering price per share of Common Stock shall be $[●]. |
| 2. | The Company is selling [●] shares of Common Stock. |
| 3. | The Company has granted an option to the Underwriters, severally and not jointly, to purchase up to an additional [●] shares of Common Stock. |
| S-IV-1 |
Schedule V
MATERIAL SUBSIDIARIES:
Mesa Cobre Holding Corporation
Computational Geosciences Inc.
Tintic Copper & Gold Inc
IE Montana Holdings Corp.
Geo27, Inc.
Ivanhoe Electric (BVI) Inc.
VRB Energy Inc.
IVNE Ivory Coast Inc.
| S-V-1 |
EXHIBIT A
Execution Copy
June ____, 2022
BMO Capital Markets Corp.
Jefferies LLC
As Representatives of the Several Underwriters
c/o BMO Capital Markets Corp.
151 W 42nd St.
New York, New York 10036
Jefferies LLC
520 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
In consideration of the agreement of the several underwriters (the “Underwriters”), for which BMO Capital Markets Corp. and Jefferies LLC intend to act as Representatives, to underwrite a proposed public offering (the “Offering”) of shares of common stock, par value $0.0001 per share (the “Stock”), of Ivanhoe Electric Inc., a Delaware corporation (the “Company”), the undersigned hereby irrevocably agrees that the undersigned shall not, for a period (the “Lock-Up Period”) beginning on the date of this Lock-Up Agreement and ending 180 days after the date of the final prospectus for the Offering, without the prior written consent of the Representatives (which consent may be withheld in their sole discretion), (1) offer, sell, pledge, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition), or require the Company to file with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), to register, or a prospectus with securities commissions or other securities regulatory authorities in any provinces or territories of Canada in respect of, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or warrants or other rights to acquire shares of Stock of which the undersigned is now, or may in the future become, the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (such shares, securities, warrants or rights collectively, the “Restricted Securities”), (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic benefits or risks of ownership of such Restricted Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Stock or other securities, in cash or otherwise, or (3) publicly disclose the intention to enter into any transaction described in clause (1) or (2) above. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of Restricted Securities owned either of record or beneficially by the undersigned except in compliance with the foregoing restrictions. Any securities of the Company acquired by the undersigned in the Offering (including, without limitation, in any issuer-directed share program) will also be Restricted Securities subject to this Lock-Up Agreement.
| A-1 |
The foregoing restrictions shall not apply to: (i) transfers of Restricted Securities as a bona fide gift or gifts by the undersigned; (ii) transfers or dispositions of Restricted Securities to any trust for the direct or indirect benefit of the undersigned or any member of the immediate family of the undersigned; (iii) transfers or dispositions of Restricted Securities to any of the undersigned’s affiliates (within the meaning set forth in Rule 405 under the Securities Act), limited partners, general partners, limited liability company members or stockholders; (iv) transfers of Restricted Securities by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned; (v) transfers or dispositions of shares of Stock acquired by the undersigned in open market purchases after the completion of the Offering; (vi) entry by the undersigned into any trading plan established pursuant to Rule 10b5-1 under the Exchange Act; (vii) the exercise of stock options granted pursuant to the Company’s equity incentive plans (including by “net” or “cashless exercise”) or warrants that are described in the Prospectus; provided that such restrictions shall apply to any of the undersigned’s Restricted Securities issued upon such exercise; (viii) the transfer of shares of Restricted Securities from the undersigned to the Company (or the purchase and cancellation of same by the Company) upon a vesting event of the Company’s securities or upon the exercise of options to purchase shares of Stock of the Company by the undersigned, in each case on a “cashless” or “net exercise” basis, or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise; provided that any public filing or public announcement under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Stock of the Company, or otherwise, required or voluntarily made during the Lock-Up Period shall clearly indicate in the footnotes thereto or comments section thereof that such transfer was made pursuant to the circumstances described in this clause; (ix) transfers of Stock or any securities convertible into or exercisable or exchangeable for Stock pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock involving a Change of Control of the Company, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the undersigned’s Restricted Securities shall remain subject to the restrictions contained in this Lock-Up Agreement; or (x) transfers of Stock or any securities convertible into or exercisable or exchangeable for Stock by operation of law to a spouse, former spouse, domestic partner, former domestic partner, child or other dependent pursuant to a qualified domestic order or in connection with a divorce settlement; provided that any public filing or public announcement under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of shares of Stock of the Company, or otherwise, required or voluntarily made during the Lock-Up Period shall clearly indicate in the footnotes thereto or comments section thereof that such transfer was made pursuant to the circumstances described in this clause; provided, however, that (a) in the case of (i), (ii), (iii), (iv) or (x) above, it shall be a condition to the transfer or disposition that the donee, trustee, heir, distributee or other transferee, as the case may be, agrees to be bound in writing to the restrictions set forth herein during the Lock-Up Period; (b) any transfer or disposition pursuant to (i), (ii), (iii) or (iv) above shall not involve a disposition for value; (c) in the case of a transfer or distribution pursuant to (i), (ii), (iii) or (v) above, no filing by the undersigned or any other party under the Exchange Act or any of the securities laws (including rules, regulations, policy statements or other such instruments or rulings) of each of the provinces and territories of Canada (collectively, “Canadian Securities Laws”) or other public announcement shall be required or made voluntarily during the Lock-Up Period in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Lock-Up Period or any filing required under Section 13 under the Exchange Act after the expiration of the Lock-Up Period if the undersigned is not an officer or director of the Company, so long as such required filing includes a reasonably detailed explanation of such transfer or distribution); and (d) in the case of (vi) above, such trading plan does not provide for any sales or other dispositions of Restricted Securities during the Lock-Up Period and no public announcement or filing under the Exchange Act or otherwise is made by or on behalf of the undersigned or the Company regarding the establishment of, or sales under, such plan during the Lock-Up Period. For the purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage, domestic partnership or adoption, not more remote than first cousin. For purposes of clause (ix) of this paragraph, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), after the closing of this Offering, to a person or group of affiliated persons, of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold shares having more than 50% of the voting power of all outstanding voting shares of the Company (or the surviving entity).
| A-2 |
If the undersigned is or, prior to the end of the Lock-Up Period, becomes an officer or director of the Company, the undersigned further agrees that the foregoing restrictions shall be equally applicable to any issuer-directed shares of Stock the undersigned may purchase in the Offering.
If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Restricted Securities, the Representatives will notify the Company of the impending release or waiver, and (ii) the Company will agree in the underwriting agreement relating to the Offering (the “Underwriting Agreement”) to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
With respect to the Offering only, the undersigned waives any registration rights relating to registration under the Securities Act or Canadian Securities Laws of any shares of Stock owned either of record or beneficially by the undersigned, including rights to receive notice of the Offering. In addition, the undersigned hereby irrevocably waives any and all rights to any antidilution adjustments, preemptive rights, participation rights, resale rights, rights of first refusal and similar rights that the undersigned may have in connection with the Offering, except for any such rights as have been heretofore duly exercised. For the avoidance of doubt, such waiver of antidilution adjustments shall not affect or otherwise prevent the application of any share consolidation effected by the Company in connection with the Offering.
| A-3 |
This Lock-Up Agreement shall automatically terminate and become null and void (i) at such time as the Representatives, on the one hand, or the Company, on the other hand, advises the other in writing, prior to the execution of the Underwriting Agreement, that it has determined not to proceed with the Offering, (ii) upon the termination of the Underwriting Agreement before the closing of the Offering, or (iii) on September 30, 2022, if the Offering shall not have closed by such date; provided, however, that the Representatives or the Company may, by written notice to the undersigned prior to such date, extend such date for a period of up to 30 additional days.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned. The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Offering in reliance upon this Lock-Up Agreement.
The undersigned acknowledges and agrees that the Underwriters have not provided any recommendation or investment advice nor have the Underwriters solicited any action from the undersigned with respect to the Offering and the undersigned has consulted their own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate. The undersigned further acknowledges and agrees that, although the Underwriters may provide certain Regulation Best Interest and Form CRS disclosures or other related documentation to the undersigned in connection with the Offering, the Underwriters are not making a recommendation to the undersigned to participate in the Offering or sell any Shares at the price determined in the Offering, and nothing set forth in such disclosures or documentation is intended to suggest that any Underwriter is making such a recommendation.
[Remainder of page intentionally left blank]
| A-4 |
This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state.
| Very truly yours, | ||
| Name of Officer, Director or Security Holder | ||
| (Print exact name) | ||
| By: | ||
| Signature | ||
| If not signing in an individual capacity: | ||
| Name of Authorized Signatory (Print) | ||
| Title of Authorized Signatory (Print) | ||
| (indicate capacity of person signing if signing as custodian, trustee, or on behalf of an entity) | ||
| A-5 |
EXHIBIT B
Form of Press Release
Ivanhoe Electric Inc.
606 – 999 Canada Place
Vancouver, BC V6C 3E1
Canada
[Date]
Ivanhoe Electric Inc. (the “Company”) announced today that BMO Capital Markets Corp. and Jefferies LLC, the lead book-running managers in the Company’s recent public sale of shares of common stock, is [waiving][releasing] a lock-up restriction with respect to [●] shares of the Company’s common stock held by [certain officers or directors][an officer or director] of the Company. The [waiver][release] will take effect on [●], and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
| B-1 |
EXHIBIT C
Form of Opinion of
U.S. Counsel to the Company
1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as described in the Registration Statement, the Time of Sale Prospectus and the Prospectus.
2. The Shares have been duly authorized by the Company and, when issued and delivered against payment therefore in accordance with the Underwriting Agreement, will be validly issued, fully paid and nonassessable, and the issuance of the Shares will not be subject to any preemptive or similar rights under the (i) Delaware General Corporation Law, (ii) the certificate of incorporation or by-laws of the Company, or (iii) any agreement listed on Schedule I to such opinion.
3. No consent, approval, authorization or order of, or other action by, or notice or filing with, any United States Federal or New York State governmental authority or regulatory body is required in connection with the authorization, issuance, transfer, sale or delivery of the Shares by the Company, in connection with the due execution and delivery by the Company of the Underwriting Agreement or the performance by the Company of its obligations thereunder, except as have been obtained under the Securities Act of 1933, as amended, and as may be required under state securities or “Blue Sky” laws in connection with the offer and sale by the Underwriters of the Shares.
4. The statements made in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus under the caption “Description of Capital Stock,” insofar as they constitute summaries of the terms of the capital stock of the Company, constitute accurate summaries of such terms of such capital stock in all material respects.
5. The statements made in each of the Registration Statement, Time of Sale Prospectus and the Prospectus under the caption “U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock,” insofar as such statements constitute summaries of United States federal law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.
6. The Company has full corporate power and authority to enter into and perform the obligations under the Agreement, and the Agreement has been duly authorized, executed and delivered by the Company.
| C-1 |
7. The execution and delivery by the Company of the Agreement does not, and the performance by the Company of its obligations thereunder do not and will not (i) violate the certificate of incorporation or by-laws of the Company, (ii) result in a breach or default under any agreements or instruments set forth in Schedule [B] to such opinion or (iii) result in a violation under federal laws of the United States (other than any federal securities laws), the law of the State of New York law or the Delaware General Corporation Law.
8. The Company is not, and, after giving effect to the issuance and sale by the Company of the Shares and the application of the proceeds therefrom as described in the Time of Sale Prospectus, will not be required to register as an “investment company” within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended.
9. The Registration Statement has become effective under the Act and no order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or is pending or, to the knowledge of such counsel, threatened.
In connection with the offering of the Shares, we participated in conferences with certain officers or employees of the Company, representatives of Deloitte LLP, independent registered public accounting firm of the Company, you and your representatives in the course of the preparation by the Company of the Registration Statement, the Time of Sale Prospectus and the Prospectus. We have not independently verified factual matters and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements made in the Registration Statement, the Time of Sale Prospectus and the Prospectus, except as set forth in paragraph [ ] of our opinion addressed to you, dated the date hereof.
Subject to the limitations set forth in the immediately preceding paragraph, and based upon our review of the Registration Statement, the Time of Sale Prospectus and the Prospectus, and our participation in the conferences referred to above (i) we advise you that each of the Registration Statement, as of the date it became effective under the Securities Act, the Time of Sale Prospectus, as of the Applicable Time, and the Prospectus, as of its date, appeared, on its face, to be appropriately responsive, in all material respects, to the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder, except that in each case, we express no view with respect to the financial statements or other financial or accounting data contained in or omitted from the Registration Statement, the Time of Sale Prospectus or the Prospectus or any information contained in or derived from or omitted from any technical report filed as an exhibit to the Registration Statement or referred to in the Registration Statement, Time of Sale Prospectus or the Prospectus (“Technical Information”), and (ii) nothing has come to our attention that caused us to believe that (a) the Registration Statement, as of the time it became effective under the Securities Act, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, (b) the Pricing Disclosure Package, as of [time] ([time zone] time) on [date], being the Applicable Time specified in the Underwriting Agreement, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (c) the Prospectus, as of its date or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that we express no belief in any of clauses (a), (b) or (c) above with respect to the financial statements or other financial or accounting data, or Technical Information contained in or omitted from the Registration Statement, the Pricing Disclosure Package or the Prospectus.
| C-2 |
EXHIBIT D
Form of Opinion of
Canadian Counsel to the Company
1. All necessary documents have been filed, all requisite proceedings have been taken and all necessary approvals, permits, consents and authorizations have been obtained by the Company under Canadian Securities Laws to qualify the distribution of the Shares, including the Option Shares: (i) to the public in each of the provinces and territories of Canada (the “Qualifying Jurisdictions”) through registrants registered under the Canadian Securities Laws of the Qualifying Jurisdictions who have complied with the relevant provisions of Canadian Securities Laws; and (ii) to such registrants purchasing as principals.
2. No authorization, consent or approval of, or filing, registration, permit, license, decree, qualification or recording with, any government, governmental instrumentality, authority, agency or court having jurisdiction over the Company in the Qualifying Jurisdictions is required for the performance by the Company of its obligations under the Agreement, other than those that have been obtained or made prior to the closing of the Offering.
3. The Transfer Agent has been duly appointed as transfer agent and registrar for the common shares of the Company.
4. Subject to the qualifications, assumptions, limitations and restrictions referred to in the section of the Prospectuses titled “Canadian Federal Income Tax Consequences for Canadian Holders”, the statements made therein are an accurate summary of the principal Canadian federal income tax considerations generally applicable under the Income Tax Act (Canada) to a holder of Shares described therein who acquires such Shares pursuant to the Offering.
5. The statements under the heading of the Prospectuses titled “Eligibility for Investment” are accurate, subject to the assumptions, qualifications, limitations and restrictions set out therein.
| D-1 |
Exhibit 3.3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
IVANHOE ELECTRIC INC.
Ivanhoe Electric Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:
1. The name of the Corporation is Ivanhoe Electric Inc. The date of the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware was July 14, 2020 (the “Original Certificate”).
2. Certificate of Amendments to the Original Certificate were filed with the Secretary of State of the State of Delaware on April 29, 2021 and June 16, 2022 (the “Certificates of Amendment”).
3. This Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”) amends, restates and integrates the provisions of the Original Certificate and the Certificate of Amendments.
4. The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware (the “DGCL”), duly adopted resolutions proposing to amend, restate and integrate the provisions of the Original Certificate and the Certificate of Amendments, declaring said amendment and restatement to be advisable and in the best interests of the Corporation and its stockholders, and authorizing the appropriate officers of the Corporation to solicit the consent of the stockholders therefore, and this Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of stock of the Corporation in accordance with Section 228 of the DGCL.
5. This Amended and Restated Certificate of Incorporation has been duly adopted and approved by the Board of Directors and the stockholders of the Corporation in accordance with Sections 242 and 245 of the DGCL.
6. The text of the Amended and Restated Certificate of Incorporation as heretofore amended or supplemented is hereby amended and restated in its entirety to read as set forth in Exhibit A attached hereto and is incorporated herein by reference in its entirety. This Amended and Restated Certificate of Incorporation shall be effective as of 7:00 a.m. Eastern Time on June , 2022.
IN WITNESS WHEREOF, the undersigned has executed this Amended and Restated Certificate of Incorporation this ___ day of June, 2022.
| IVANHOE ELECTRIC INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
2
EXHIBIT A
ARTICLE 1
Name
The name of the corporation is Ivanhoe Electric Inc. (the “Corporation”).
ARTICLE 2
Registered Office and Agent
The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Services Company.
ARTICLE 3
Purpose
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (the “DGCL”).
ARTICLE 4
Capital Stock
Section 1 Authorized Capital Stock. The total number of shares of capital stock which the Corporation shall have authority to issue is 750,000,000 shares of which (i) 700,000,000 shares shall be a class designated as common stock, par value $0.0001 per share (the “Common Stock”), and (ii) 50,000,000 shares shall be a class designated as undesignated preferred stock, par value $0.0001 per share (the “Preferred Stock”). Except as otherwise provided in any certificate of designation of any series of undesignated Preferred Stock, the number of authorized shares of the class of Common Stock or Preferred Stock may from time to time be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the Corporation irrespective of the provisions of Section 242(b)(2) of the DGCL.
Section 2 Preferred Stock. The Board of Directors is hereby empowered, without any action or vote by the Corporation’s stockholders (except as may otherwise be provided by the terms of any class or series of Preferred Stock then outstanding), to authorize by resolution or resolutions from time to time the issuance of one or more classes or series of Preferred Stock and to fix the designation, powers, preferences and relative, participating, optional or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, with respect to each such class or series of Preferred Stock and the number of shares constituting each such class or series, and to increase or decrease the number of shares of any such class or series to the extent permitted by the DGCL.
Section 3 Voting Rights. Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held of record by such holder. Each holder of Common Stock shall be entitled to notice of any meeting of stockholders in accordance with the bylaws of the Corporation as in effect at the time in question (the “Bylaws”) and applicable law on all matters put to a vote of the stockholders of the Corporation; provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any class or series of Preferred Stock then outstanding) that relates solely to the terms of one or more outstanding classes or series of Preferred Stock if the holders of such affected class or series are entitled, either separately or together with the holders of one or more other such classes or series, to vote thereon pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation relating to any class or series of Preferred Stock then outstanding) or pursuant to the DGCL. Except as otherwise required by law, each holder of any series of Preferred Stock shall be entitled only to the voting rights, if any, as shall expressly be granted thereto by the resolution or resolutions providing for the issuance of such series of Preferred Stock.
3
Section 4 Dividends. Subject to the rights of any holders of any series of Preferred Stock which may from time to time come into existence and be outstanding, each holder of Common Stock shall be entitled to the payment of dividends and the right to receive other distributions from the Corporation when and as declared by the Board of Directors in accordance with applicable law. Any dividends or other distributions declared by the Board of Directors to the holders of the then-outstanding Common Stock shall be paid to such holders pro rata in accordance with the number of shares of Common Stock held by each such holder as of the record date of such dividend or other distribution.
Section 5 Liquidation. Subject to the rights of any holders of any series of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the stockholders of the Corporation shall be distributed among the holders of the then-outstanding Common Stock pro rata in accordance with the number of shares of Common Stock held by each such holder as of the date of such distribution.
ARTICLE 5
Board of Directors
Section 1 Power of the Board of Directors. Except as otherwise provided in this Amended and Restated Certificate of Incorporation or in the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 2 Number of Directors. Except as otherwise provided for or fixed pursuant to Article 4, including any certificate of designation filed with respect to any series of Preferred Stock, the total number of directors shall be determined from time to time exclusively by resolution adopted by the affirmative vote of a majority of the Board of Directors.
4
Section 3 Election of Directors.
| (a) | All of the directors will be elected annually at the annual meeting of stockholders. |
| (b) | A majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors and, except as otherwise expressly required by law or by this Amended and Restated Certificate of Incorporation, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. |
| (c) | Each director shall hold office until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation or removal. |
| (d) | There shall be no cumulative voting in the election of directors. Election of directors need not be by written ballot unless the Bylaws so provide. |
Section 4 Vacancies. Subject to the rights, if any, of the holders of any series of Preferred Stock then outstanding to elect Directors and to fill vacancies in the Board of Directors relating thereto, any and all vacancies in the Board of Directors however occurring, including, without limitation, by reason of newly created directorships resulting from any increase in the number of directors or the death, resignation, disqualification or removal of a director, may be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Board of Directors, or by the sole remaining director, and not by the stockholders. Any director elected to fill a vacancy or newly-created directorship shall hold office until the next election of directors and until his or her successor is elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.
ARTICLE 6
Stockholders
Section 1 No Action by Written Consent of Stockholders. Subject to the rights of any holders of any series of Preferred Stock which may from time to time come into existence and be outstanding, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon a vote of stockholders at an annual or special meeting of stockholders duly noticed and called in accordance with the Bylaws and the DGCL and may not be taken by written consent of stockholders in lieu of a meeting.
Section 2 Special Meetings of Stockholders. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock which may from time to time come into existence and be outstanding, special meetings of stockholders for any purpose or purposes may be called at any time only by or at the direction of the Board or an officer of the Corporation authorized by the Board or designated in the Bylaws of the Corporation to call such a special meeting, but such special meetings may not be called by stockholders or any other person or persons. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.
5
Section 3 Advance Notice. Advance notice of stockholder nominations for the election of directors and of other business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
ARTICLE 7
Limitations on Liability and Indemnification
Section 1 Limited Liability. The personal liability of each director of the Corporation to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duties as director, is hereby eliminated to the fullest extent permitted by the DGCL, as it now exists or may hereafter be amended and/or supplemented. If the DGCL is amended after approval by the stockholders of this Article 7 to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.
Section 2 Right to Indemnification.
The Corporation shall indemnify to the fullest extent permitted by law, as it presently exists or may hereafter be amended, any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative, or investigative, by reason of the fact that such person is or was a director or officer of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation. Any amendment, repeal, or modification of this Section 7.2 shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. The Corporation may, by action of the Board, provide rights to indemnification and advancement of expenses to such other employees or agents of the Corporation or its subsidiaries (and any other persons to which the DGCL permits the Corporation to provide indemnification) through Bylaw provision, agreement, vote of stockholders or disinterested directors, or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL.
Section 3 Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the DGCL.
Section 4 Nonexclusivity of Rights. The rights and authority conferred in this Article 7 shall not be exclusive of any other right that any person may otherwise have or hereafter acquire.
Section 5 Preservation of Rights. Neither the amendment nor repeal of this Article 7, nor the adoption of any provision of this Amended and Restated Certificate Incorporation or the Bylaws, nor, to the fullest extent permitted by the DGCL, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).
6
ARTICLE 8
Forum selection
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom shall be the sole and exclusive forum for the following claims or causes of action: (i) any derivative claim or cause of action brought on behalf of the Corporation; (ii) any claim or cause of action for breach of a fiduciary duty owed by any current or former director, officer, employee, agent, or stockholder of the Corporation, to the Corporation or the Corporation’s stockholders, including without limitation a claim alleging the aiding and abetting of such a breach of fiduciary duty; (iii) any claim or cause of action against the Corporation or any current or former director, officer, employee, agent, or stockholder of the Corporation arising out of or pursuant to any provision of the DGCL, this Amended and Restated Certificate of Incorporation, or the Bylaws (as each may be amended from time to time); (iv) any claim or cause of action seeking to interpret, apply, enforce, or determine the validity of this Amended and Restated Certificate of Incorporation or the Bylaws (as each may be amended from time to time, including any right, obligation, or remedy thereunder); (v) any claim or cause of action as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; and (vi) any action asserting a claim related to or involving the Corporation that is governed by the internal-affairs doctrine, in all cases to the fullest extent permitted by law. This Article 8 shall not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “1933 Act”), or the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. If any action the subject matter of which is within the scope of this Article 8 is filed in a court other than the courts in the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with any action brought in any such court to enforce the provisions of this Article 8 and (y) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the 1933 Act.
To the fullest extent permitted by applicable law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article 8.
7
If any provision or provisions of this Article 8 shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article 8 (including, without limitation, each portion of any sentence of this Article 8 containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
ARTICLE 9
Amendments of Certificate of Incorporation and Bylaws
Section 1 Amendment of Certificate of Incorporation. Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Corporation required by law or by this Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a class or series of Preferred Stock that may be designated from time to time, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend, or repeal, by merger, consolidation, or otherwise, Articles 5, 6, 7, 8 and this Article 9.
Section 2 Amendment of Bylaws. The Board of Directors is expressly empowered to adopt, amend, or repeal the Bylaws. Any adoption, amendment, or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the directors then in office. The stockholders shall also have power to adopt, amend, or repeal the Bylaws; provided, however, that, in addition to any affirmative vote of the holders of any particular class or series of the Corporation required by law or by this Amended and Restated Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock that may be designated from time to time, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
8
Exhibit 3.5
AMENDED AND RESTATED BYLAWS
OF
IVANHOE ELECTRIC INC.
(A DELAWARE CORPORATION)
Table of Contents
| Page | ||
| ARTICLE I OFFICES | 1 | |
| 1.1 | Registered Office | 1 |
| 1.2 | Other Offices | 1 |
| ARTICLE II CORPORATE SEAL | 1 | |
| 2.1 | Corporate Seal | 1 |
| ARTICLE III STOCKHOLDERS’ MEETINGS | 1 | |
| 3.1 | Place of Meetings | 1 |
| 3.2 | Annual Meetings | 1 |
| 3.3 | Special Meetings | 4 |
| 3.4 | Notice of Meetings | 4 |
| 3.5 | Quorum; Action at Meeting | 5 |
| 3.6 | Adjournment and Notice of Adjourned Meetings | 5 |
| 3.7 | Voting Rights | 6 |
| 3.8 | Joint Owners of Stock | 6 |
| 3.9 | List of Stockholders | 6 |
| 3.10 | Action Without Meeting | 6 |
| 3.11 | Organization | 6 |
| ARTICLE IV DIRECTORS | 7 | |
| 4.1 | Number and Term of Office | 7 |
| 4.2 | Powers | 7 |
| 4.3 | Vacancies | 7 |
| 4.4 | Resignation | 7 |
| 4.5 | Removal | 7 |
| 4.6 | Meetings | 8 |
| 4.7 | Quorum and Voting | 8 |
| 4.8 | Action Without Meeting | 9 |
| 4.9 | Fees and Compensation | 9 |
| 4.10 | Committees | 10 |
| 4.11 | Organization | 10 |
| ARTICLE V OFFICERS | 10 | |
| 5.1 | Officers Designated | 10 |
| 5.2 | Tenure and Duties of Officers | 10 |
| 5.3 | Delegation of Authority | 11 |
| 5.4 | Resignations | 11 |
| 5.5 | Removal | 12 |
| ARTICLE VI EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION | 12 | |
| 6.1 | Execution of Corporate Instruments | 12 |
| 6.2 | Voting of Securities Owned by the Corporation | 12 |
| ARTICLE VII SHARES OF STOCK | 12 | |
| 7.1 | Form and Execution of Certificates | 12 |
| 7.2 | Lost Certificates | 13 |
| 7.3 | Transfers | 13 |
| 7.4 | Fixing Record Dates | 13 |
| 7.5 | Registered Stockholders | 13 |
| ARTICLE VIII OTHER SECURITIES OF THE CORPORATION | 14 | |
| 8.1 | Execution of Other Securities | 14 |
| ARTICLE IX DIVIDENDS | 14 | |
| 9.1 | Declaration of Dividends | 14 |
| 9.2 | Dividend Reserve | 14 |
| ARTICLE X FISCAL YEAR | 14 | |
| 10.1 | Fiscal Year | 14 |
| ARTICLE XI INDEMNIFICATION | 15 | |
| 11.1 | Indemnification of Directors, Officers, Employees and Other Agents | 15 |
| ARTICLE XII NOTICES | 17 | |
| 12.1 | Notices | 17 |
| ARTICLE XIII AMENDMENTS | 18 | |
| 13.1 | Amendments | 18 |
| ARTICLE XIV LOANS TO OFFICERS OR EMPLOYEES | 19 | |
| 14.1 | Loans to Officers or Employees | 19 |
AMENDED AND RESTATED BYLAWS
OF
IVANHOE ELECTRIC INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES
1.1 Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, New Castle County, Delaware. The name of its registered agent at such address is Corporation Service Company.
1.2 Other Offices. The corporation may also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors of the corporation (the “Board of Directors”), and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.
ARTICLE II
CORPORATE SEAL
2.1 Corporate Seal. The Board of Directors may adopt a corporate seal. If adopted, the corporate seal shall consist of a die bearing the name of the corporation and the inscription, “Corporate Seal-Delaware.” Such corporate seal shall be in the charge of the Secretary and may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
ARTICLE III
STOCKHOLDERS’ MEETINGS
3.1 Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”).
3.2 Annual Meetings.
(a) The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors or any committee thereof, (iii) as may be provided in the certificate of designations for any class or series of preferred stock or (iv) by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in paragraph (b) of this Section 3.2 and at the time of the annual meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in Section 3.2(b), and, except as otherwise required by law, any failure to comply with these procedures shall result in the nullification of such nomination or proposal. For the avoidance of doubt, clause (iv) above shall be the exclusive means for a stockholder to make nominations and submit other business (other than matters properly included in the corporation’s notice of meeting of stockholders and proxy statement under Rule 14a-8 (or any successor rule) under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “1934 Act”)) before an annual meeting of stockholders, and such stockholder must comply with the notice and other procedures set forth in Section 3.2(b) of this Bylaw to bring such nominations or business properly before an annual meeting of stockholders.
1
(b) At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under Delaware law and as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder pursuant to clause (iv) of paragraph (a) of this Section 3.2, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not less than 120 days nor more than 150 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 70 days after such anniversary date then to be timely such notice must be received by the Corporation no earlier than 120 days prior to such annual meeting and no later than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public announcement of the date of the meeting was first made by the Corporation. In no event shall the adjournment or postponement of any meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
A stockholder’s notice to the Secretary shall set forth as to each person whom the stockholder proposes to nominate for election or reelection as a director:
(1) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected);
(2) a reasonably detailed description of any compensatory, payment or other financial agreement, arrangement or understanding that such person has with any other person or entity other than the Corporation including the amount of any payment or payments received or receivable thereunder, in each case in connection with candidacy or service as a director of the Corporation (a “Third-Party Compensation Arrangement”), as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the text of the proposed amendment), the reasons for conducting such business and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made;
(3) the name and address of such stockholder (as they appear on the Corporation’s books) and any such beneficial owner;
2
(4) the class or series and number of shares of capital stock of the Corporation which are held of record or are beneficially owned by such stockholder and by any such beneficial owner;
(5) a description of any agreement, arrangement or understanding between or among such stockholder and any such beneficial owner, any of their respective affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;
(6) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or any such beneficial owner or any such nominee with respect to the Corporation’s securities;
(7) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;
(8) a representation as to whether such stockholder or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from stockholders in support of such proposal or nomination;
(9) any other information relating to such stockholder, beneficial owner, if any, or director nominee or proposed business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies in support of such nominee or proposal pursuant to Section 14 of the 1934 Act; and
(10) such other information relating to any proposed item of business as the Corporation may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
If requested by the Corporation, the information required under clauses (4), (5) and (6) of the preceding sentence of this Section 3.2(b) shall be supplemented by such stockholder and any such beneficial owner not later than 10 days after the record date for the meeting to disclose such information as of the record date.
(c) Notwithstanding the foregoing provisions of this Section 3.2, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations thereunder. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the 1934 Act; provided, however, that any references in these Bylaws to the 1934 Act or the rules and regulations thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to Section 3.2(a)(iv) of these Bylaws.
3
(d) Except as otherwise required by law, nothing in this Section 3.2 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any nominee for director or any other matter of business submitted by a stockholder.
(e) For purposes of Sections 3.2 and 3.3,
(i) “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the 1934 Act; and
(ii) “affiliates” and “associates” shall have the meanings set forth in Rule 405 under the Securities Act of 1933, as amended.
3.3 Special Meetings.
(a) Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of the stockholders of the corporation may be called, for any purpose as is a proper matter for stockholder action under Delaware law, by (i) the Chair of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the directors then in office.
(b) The Board of Directors shall determine the time and place, if any, of such special meeting. Upon determination of the time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 3.4. No business may be transacted at such special meeting otherwise than specified in the notice of meeting.
(c) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation’s notice of meeting. Nominations of persons for election to the Board of Directors of the corporation and stockholder proposals of other business shall not be brought before a special meeting of stockholders to be considered by the stockholders unless, with respect to nominations, the Board of Directors has determined that any vacancy or newly created directorship be filled by the stockholders at such special meeting or, with respect to nominations and other business, the Board of Directors has determined that such special meeting be held in lieu of an annual meeting of stockholders in accordance with Section 3.2 of these Bylaws, in which case such special meeting shall be deemed an annual meeting for purposes of these Bylaws and the provisions of Section 3.2 of these Bylaws shall govern such special meeting.
3.4 Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Without limiting the manner by which notice may otherwise be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof, or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given. The Board of Directors may postpone and reschedule any previously scheduled annual meeting or special meeting of stockholders and any record date with respect thereto, regardless of whether any notice or public disclosure with respect to any such meeting has been sent or made pursuant to Section 3.2 of these Bylaws or otherwise. In no event shall the public announcement of an adjournment, postponement or rescheduling of any previously scheduled meeting of stockholders commence a new time period for the giving of a stockholder’s notice under Section 3.2 of these Bylaws.
4
3.5 Quorum; Action at Meeting.
(a) At all meetings of stockholders, except where otherwise provided by law or by the Amended and Restated Certificate of Incorporation of the corporation (as the same may hereafter be amended and/or restated, the “Certificate of Incorporation”), or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the presiding officer of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter.
(b) A nominee in an uncontested election shall be elected to the Board of Directors if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. For purposes of these By-laws, an “uncontested election” means elections where the number of nominees for election is equal to the number of directors to be elected as set out in the proxy statement for the particular meeting. In all director elections other than uncontested elections, directors shall be elected by a plurality of the votes cast, and stockholders shall not be permitted to vote against any nominee for director. If the holders of preferred stock of the Company are entitled to elect one or more directors in accordance with a certificate adopted pursuant to Section 3 of Article 4 of the Certificate of Incorporation, such directors shall be elected in accordance with this Section unless a different vote for election is specified in such certificate. If a nominee in an uncontested election is not elected by a majority vote, then the Director shall offer to resign from his or her position as a Director. Unless the Board decides to reject the offer or to postpone the effective date of the offer, the resignation shall become effective 60 days after the date of the election. In making a determination whether to reject the offer or postpone the effective date, the Board of Directors shall consider all factors it deems relevant to the best interests of the Company. If the Board rejects the resignation or postpones its effective date, it shall issue a public statement that discloses the reason for its decision.
3.6 Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the presiding officer of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken; provided that if the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.
5
3.7 Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 3.9 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.
3.8 Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, to the fullest extent permitted by law, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his or her act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.
3.9 List of Stockholders. The Secretary (or the corporation’s transfer agent or other person authorized by these Bylaws or by law) shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall be open to examination of any stockholder who is present at the meeting during the whole time of the meeting as provided by law.
3.10 Action Without Meeting. Subject to the rights, if any, of holders of Preferred Stock to take action by written consent, no action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these Bylaws, and no action shall be taken by the stockholders by written consent or by electronic transmission.
3.11 Organization.
(a) The Board of Directors shall designate a representative to preside over all annual meetings or special meetings of stockholders, provided that if the Board of Directors does not so designate such a presiding officer, then the Chair of the Board of Directors, if one is elected, shall preside over such meetings. If the Board of Directors does not so designate such a presiding officer and there is no Chair or the Chair is absent, the Chief Executive Officer of the corporation, or, if the Chief Executive Officer is absent, then the President (if the Chief Executive Officer and President positions are held by different persons) of the corporation, shall preside over such meetings. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
6
(b) The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the presiding officer of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding officer, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the presiding officer shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot.
ARTICLE IV
DIRECTORS
4.1 Number and Term of Office. The number of directors that shall constitute the Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors. The directors shall hold office in the manner provided in the Certificate of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation.
4.2 Powers. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.
4.3 Vacancies. Vacancies in the Board of Directors shall be filled in the manner provided in the Certificate of Incorporation.
4.4 Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Chair of the Board of Directors, if one is elected, the Chief Executive Officer, the President, or Secretary, such resignation to specify whether it will be effective at a particular time. If no such specification is made, it shall be deemed effective at the time of delivery. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office for the unexpired portion of the term of the Director whose place shall be vacated and until his or her successor shall have been duly elected and qualified.
4.5 Meetings.
(a) Regular Meetings. Regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.
7
(b) Special Meetings. Special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chair of the Board of Directors, the Chief Executive Officer or a majority of the directors. The person calling any such special meeting of the Board of Directors may fix the time and place thereof.
(c) Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by United States mail, it shall be sent by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing, or by electronic transmission, at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise required by law, the Certificate of Incorporation or by these Bylaws, neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
(e) Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though it had been transacted at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
4.6 Quorum and Voting.
(a) A majority of the total number of directors then in office shall constitute a quorum for the transaction of business; provided that such number shall not be less than one third of the total authorized directors. Notwithstanding the foregoing, at any meeting of the Board of Directors, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.
4.7 Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
8
4.8 Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
4.9 Committees.
(a) Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the corporation.
(b) Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c) Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a) or (b) of this Section 4.10, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 4.10 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any Director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the members then serving on any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
9
4.10 Organization. At every meeting of the directors, the Chair of the Board of Directors, or, if a Chair has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent, the President (if a director, and if the Chief Executive Officer and President positions are held by different persons), or if the President is absent, a chair of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his or her absence, any Assistant Secretary or other officer or director or other person directed to do so by the Chair of the Board of Directors or the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
5.1 Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chair of the Board of Directors (provided that notwithstanding anything to the contrary contained in these Bylaws, the Chair of the Board of Directors shall not be deemed an officer of the corporation unless so designated by the Board of Directors), the Chief Executive Officer, the President, the Secretary and the Chief Financial Officer. The Board of Directors may also appoint one or more Assistant Secretaries and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.
5.2 Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.
(b) Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders (subject to Section 3.11) and at all meetings of the Board of Directors, unless the Chair of the Board of Directors has been appointed and is present or unless such duties are designated by the Chair to any other office. Unless an officer has been appointed Chief Executive Officer of the corporation, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business of the corporation. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other obligations, duties, and powers, as the Board of Directors shall designate from time to time.
10
(c) Duties of President. The President shall preside at all meetings of the stockholders (subject to Section 3.11) and at all meeting of the Board of Directors, unless the Chair of the Board of Directors or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the corporation, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.
(d) Duties of Other Officers. The Board of Directors may appoint, or empower the Chief Executive Officer or, in the absence of a Chief Executive Officer, the President, to appoint, such other officers as the business of the corporation may require. Each of such officers shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.
(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate from time to time. The President may direct the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate from time to time.
5.3 Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
5.4 Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.
11
5.5 Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or by the Chief Executive Officer or by other superior officers upon whom such power of removal may have been conferred by the Board of Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION
6.1 Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation.
All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
6.2 Voting of Securities Owned by the Corporation. All stock and other securities of other entities owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chair of the Board of Directors, the Chief Executive Officer, the President, or any other officer or other person so authorized by the Board of Directors.
ARTICLE VII
SHARES OF STOCK
7.1 Form and Execution of Certificates. The shares of the corporation shall be represented by certificates or shall be uncertificated. Certificates for the shares of stock, if any, of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by certificate in the corporation shall be entitled to have a certificate signed by or in the name of the corporation by any two authorized officers of the corporation, certifying the number of shares owned by him or her in the corporation. The corporate seal and any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if her or she were such officer, transfer agent, or registrar at the date of issue. Notwithstanding anything to the contrary provided in these Bylaws, the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation), and by the approval and adoption of these Bylaws the Board of Directors has determined that all classes or series of the corporation’s stock may be uncertificated, whether upon original issuance, re-issuance, or subsequent transfer.
12
7.2 Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
7.3 Transfers.
(a) Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
7.4 Fixing Record Dates.
(a) In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
7.5 Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
13
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
8.1 Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 7.1), may be signed by the Chair of the Board of Directors, the President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Chief Financial Officer or Controller of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.
ARTICLE IX
DIVIDENDS
9.1 Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.
9.2 Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
10.1 Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.
14
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification of Directors, Officers, Employees and Other Agents.
(a) Directors and Officers. The corporation shall indemnify its directors and officers to the extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have power to indemnify its employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person to such officers or other persons as the Board of Directors shall determine.
(c) Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding; provided, however, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this section or otherwise. The corporation may, at the discretion of the Board of Directors, advance to any of its other officers, employees and other agents on such basis as the Board of Directors may authorize.
(d) Right of Indemnitee to Bring Suit. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or officer. Any right to indemnification or advances granted by this section to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. The burden of proving that a director or officer is not entitled to an advancement of expenses shall be on the corporation. In any suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the corporation shall be entitled to recover such expenses upon a final adjudication that the director or officer or any other officer, employee or other agent has not met any applicable standard for indemnification set forth in the DGCL.
15
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL, or by any other applicable law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this section.
(h) Amendments. Any repeal or modification of this section, or the adoption of any provision of the Certificate of Incorporation inconsistent with this section, shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.
(i) Other Indemnification. The corporation’s obligation, if any, to indemnify or provide advancement of expenses to any person under this section as a result of such person serving, at the request of the corporation, as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or enterprise (the “Primary Indemnitor”). Any indemnification or advancement of expenses under this section owed by the corporation as a result of a person serving, at the request of the corporation, as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall only be in excess of, and shall be secondary to, the indemnification or advancement of expenses available from the applicable Primary Indemnitor(s) and any applicable insurance policies.
(j) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and officer to the full extent not prohibited by any applicable portion of this section that shall not have been invalidated, or by any other applicable law. If this section shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and officer to the full extent under any other applicable law.
16
(k) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(i) The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(ii) The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(iii) The term the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
(iv) References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(v) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
ARTICLE XII
NOTICES
12.1 Notices.
(a) Notice to Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 3.4 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means. Without limiting the manner by which notice may otherwise be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.
(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a), as otherwise provided in these Bylaws, or by overnight delivery service, facsimile, telex or telegram, except that such notice other than one which is delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
17
(c) Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person With Whom Communication is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within sixty (60) days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.
ARTICLE XIII
AMENDMENTS
13.1 Amendments. Subject to the limitations set forth in Section 11.1(h) of these Bylaws or the provisions of the Certificate of Incorporation, the Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation. Any adoption, amendment or repeal of the Bylaws of the corporation by the Board of Directors shall require the approval of a majority of the directors then in office. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.
18
ARTICLE XIV
LOANS TO OFFICERS OR EMPLOYEES
14.1 Loans to Officers or Employees. Except as otherwise prohibited by applicable law, including the Sarbanes-Oxley Act of 2002, the corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.
Adopted by the Board of Directors on June [ ], 2022 and approved by the stockholders on June [ ], 2022, subject to and effective upon the consummation of the corporation’s initial public offering.
19
Exhibit 3.6
| State
of Delaware Secretary of State Division of Corporations Delivered 11:00 AM 06/16/2022 FILED 11:00 AM 06/16/2022 SR 20222743552 - File Number 3239208 |
| CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF IVANHOE ELECTRIC INC. |
IVANHOE ELECTRIC, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: The name of the Corporation is Ivanhoe Electric Inc. (the "Corporation")
SECOND: The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 14, 2020 and a Certificate of Amendment was filed with the Secretary of State of the State of Delaware on April 29, 2021.
THIRD: The Board of Directors (the "Board") of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions amending its Certificate of Incorporation, as amended (the "Certificate of Incorporation"), as follows:
Article Four of the Certificate of Incorporation, as presently in effect, of the Corporation is hereby amended to add the following at the end thereof:
"Effective at 11:00 AM Eastern time, on the date of filing of this Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware (the "Effective Time"), the shares of the Corporation's Common Stock, par value $0.0001 per share, issued and outstanding immediately prior to the Effective Time and the shares of Common Stock issued and held in the treasury of the Corporation immediately prior to the Effective Time, without any action on the part of the respective holders thereof, shall be combined into a smaller number of shares such that each three (3) shares of issued and outstanding Common Stock immediately prior to the Effective Time are combined into one (1) validly issued, fully paid and nonassessable share of Common Stock, par value $0.0001 per share. Notwithstanding the immediately preceding sentence, no fractional shares shall be issued and, in lieu thereof, upon surrender after the Effective Time of a certificate which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, any person who would otherwise be entitled to a fractional share of Common Stock as a result of the combination, following the Effective Time (after taking into account all fractional shares of Common Stock otherwise issuable to such holder), shall be entitled to receive a cash payment equal to the fraction to which such holder would otherwise be entitled multiplied by the fair value of the Common Stock on the date of the Effective Time, as determined by the Board of Directors.
Each stock certificate that, immediately prior to the Effective Time, represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been combined (as well as the right to receive cash in lieu of fractional shares of Common Stock after the Effective Time), provided, however, that each person of record holding a certificate that represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time shall receive, upon surrender of such certificate, a new certificate (or book-entry in favor of a stockholder of record) evidencing and representing the number of whole shares of Common stock after the Effective Time into which the shares of Common Stock formerly represented by such certificate shall have been combined."
FOURTH: Thereafter, pursuant to a resolution by the Board, this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval in accordance with the provisions of Section 211 and 242 of the DGCL. Accordingly, said proposed amendment has been adopted in accordance with Section 242 of the DGCL.
- 2 -
IN WITNESS WHEREOF, IVANHOE ELECTRIC INC. has caused this Certificate of Amendment to be signed by its duly authorized officer this 16th day of June, 2022.
| IVANHOE ELECTRIC INC. | ||
| /s/ Robert Friedland | ||
| Name: | Robert Friedland | |
| Title | CEO | |
Exhibit 10.10
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the 19 day of October, 2017 (the “Effective Date”), by and between SPENST M. HANSEN, a natural person and resident of Utah, KEYSTONE SURVEYS, INC., a Utah corporation, MAMMOTH MINING COMPANY LLC, a Utah limited liability company, NORTHSTAR MINES LLC, a Utah limited liability company, SPENST HANSEN BUSINESS TRUST, a Utah business trust, and TREASURE HILL MINES LLC, a Utah limited liability company (collectively “Seller”), and HIGH POWER EXPLORATION INC., a Delaware corporation, and HPX UTAH HOLDINGS INC., a Utah corporation (collectively, “Buyer”).
RECITALS
WHEREAS, Seller is the owner of certain patented and unpatented mining claims, and in other real property mining lands and related mineral interests, located in Juab County, State of Utah, as more particularly identified on attached Exhibit A (the “Identified Interests”), together with any and all of the following (collectively with the Identified Interests, the “Subject Property”, as more particularly described in the conveyance terms and legal description contained in Schedule A to the attached Exhibit B): (a) all right, title and interest of Seller in and to appurtenant easements and rights-of-way pertaining to the Identified Interests, (b) any improvements and infrastructure located on the Identified Interests, (c) water rights, shares or interests, if any, appurtenant to or used in connection with the Identified Interests, (d) any permits, leases or authorizations associated or used in connection with the Identified Interests, and (e) other rights and interests appurtenant to or used in connection with the Identified Interests or otherwise listed on Exhibit A; and
WHEREAS, Buyer desires to purchase and acquire Seller’s interest in the Subject Property from Seller, and Seller desires to sell and convey Seller’s interest in the Subject Property to Buyer, all subject to and in accordance with the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon the terms and conditions of this Agreement, Seller hereby transfers, grants and conveys to Buyer, and Buyer hereby acquires from Seller, the Subject Property.
2. Purchase Price. The aggregate amount to be paid by Buyer to Seller for the acquisition of the Subject Property in accordance with the terms and conditions of this Agreement shall be [***] (the “Purchase Price”). The Purchase Price shall be payable as follows:
(a) On the Closing Date, Buyer shall pay to Seller [***].
(b) The remaining portion of the Purchase Price, equal to [***] (the “Remaining Balance”) shall be paid in [***] installments on or before each subsequent six (6) month anniversary of the Closing Date until the full amount of the Purchase Price is paid. Buyer shall have the right, at its sole discretion, to prepay all or any portion of the Remaining Balance at any time following the Closing Date.
The Purchase Price, including the Remaining Balance payments, shall be paid into escrow by wire transfer to a closing escrow account serviced by an escrow agent selected by Buyer and approved by Seller (the “Escrow Agent”). Upon receipt of each of the Purchase Price payments, the Escrow Agent shall, within two (2) business days of receipt of each respective Purchase Price payment from Buyer, deliver such Purchase Price payment to Seller by check or wire transfer (as directed by Seller).
3. Prorations and Credits. Seller and Buyer agree that no prorations shall be made, nor credits given, and that Buyer covenants to pay all real property taxes, assessments and other similar matters for the Subject Property.
4. The Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement shall be held concurrent with the execution of this Agreement (the “Closing Date”).
At the Closing the following shall occur, all of which shall be considered as taking place simultaneously:
(a) The Seller shall execute and deliver to the Escrow Agent a fully-executed Special Warranty Deed (the “Deed”) for the Subject Property in the form attached hereto as Exhibit B. The Escrow Agent shall hold the Deed, and deliver it to Buyer, in accordance with the terms and conditions of Section 5 of this Agreement.
(b) The Buyer shall deliver to the Seller, the Purchase Price, as set forth in Section 2.
(c) The Seller and Buyer shall execute such documents and, further, take such other actions as are reasonably necessary and appropriate to effectuate the Closing in accordance with this Agreement.
(d) Buyer shall pay all of the Escrow Agent’s fees and costs incurred with connection with the transaction, including the escrow account for the Deed as set forth in Section 5. Following delivery of the Deed as outlined in Section 5, Buyer shall be responsible for the recording of the Deed.
5. Transfer of Title. Following the Closing of the transaction contemplated by this Agreement, the Escrow Agent shall hold the Deed in escrow until the entire Purchase Price (including the Remaining Balance) has been paid by Buyer to Seller in accordance with Section 2 of this Agreement.
(a) Upon payment of the entire Purchase Price by Buyer in accordance with Section 2, the Escrow Agent shall release and deliver to Buyer the Deed.
(b) If Buyer fails or refuses to make payment of the Remaining Balance as set forth in Section 2, Seller shall have the right, following (1) written notice of the alleged default to Buyer and the Escrow Agent, and (2) a thirty (30) day opportunity to cure by. Buyer following receipt of the written notice, to direct the Escrow Agent to return the Deed to Seller. In such event, upon Seller’s receipt of the Deed, Seller shall retain all previously paid Purchase Price payments, and this Agreement shall terminate and be of no further force or effect and, except as set forth in Section 7, neither party shall have any claim or dispute against the other party arising out of or pertaining in any way to this Agreement.
2
6. Buyer’s Representations. The Buyer represents to Seller as of the date hereof as follows:
(a) Buyer has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Except as set forth in Section 7, Buyer is purchasing the Subject Property on and in an as-is, where-is, and with all faults basis and condition, subject to all defects, whether latent or patent, risks or liabilities, including, without limitation, any and all environmental defects, risks, liabilities, or conditions. Except as expressly stated herein, Buyer is relying solely on its own and its agents’ or consultants’ investigations of the Subject Property with respect to all matters, as of the Effective Date. Buyer hereby agrees that it accepts the Subject Property on and after the Closing Date on such basis and condition. Further, Buyer waives any and all right to claim, either prior to, at, or after the Closing Date that the purchase and sale is or was on any other basis or condition. Buyer shall be deemed to have released, discharged and acquitted Seller from any and all claims or causes of action, whatsoever, relating to the Subject Property.
7. Seller’s Representations. The Seller hereby represents to Buyer as of the date hereof as follows:
(a) Seller has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Seller has not previously granted, conveyed, sold, mortgaged, pledged, hypothecated or otherwise transferred any interest in the Subject Property to any other person or entity, and is not aware of any actual or threatened claim of title by any third party, by, through or under Seller, but not otherwise, to the Subject Property, except as may be particularly identified in Exhibit A and described in Schedule A of the Deed.
(c) Except as otherwise disclosed by Seller to Buyer in writing prior to Closing, Seller has not received written notice of any claims, actions, suits, or other proceedings pending or threatened by any governmental department or agency, or any other entity or person, pertaining to the Subject Property.
(d) Other than any general real property taxes for the year 2017, to Seller’s knowledge, there are no liabilities or obligations related to the Subject Property which Seller is obligated to satisfy on, before or after the Closing.
8. Areas of Interest. Seller and Buyer acknowledge that Seller owns additional mining properties within the vicinity of the Subject Property, and within the boundaries of the area designated as the Hansen Area of Interest, or “Hansen AOI” as identified on Exhibit C attached hereto (the “Hansen AOI”), and Seller intends to continue to pursue mining development within the Hansen AOI. As a condition to the Closing of the transaction contemplated by this Agreement, and the transfer of the Subject Property from Seller to Buyer, Seller and Buyer agree as follows:
(a) Following the Closing Date, and for so long thereafter as Seller, or its successors or assigns, owns mining property interests within the Hansen AOI, up to a maximum of [***] years after the Closing Date, Buyer and its affiliates may stake or acquire mining property interests within the boundary of the Hansen AOI as identified on Exhibit C attached hereto, provided that Buyer and its affiliates act in accordance with the procedure described in sub-section (c) below.
3
(b) Following the Closing Date, and for so long thereafter as Buyer, or its successors or assigns, owns the Subject Property, up to a maximum of four and one-half (41/2) years after the Closing Date, Seller and its affiliates may stake or acquire mining property interests within the boundary of the “HPX AOI” identified on Exhibit C attached hereto, provided that Seller and its affiliates act in accordance with the procedure described in sub-section (c) below.
(c) Seller and Buyer agree that if either party or its affiliates (the “Acquiring Party”) stakes or acquires mining property interests in the other party’s AOI, then the Acquiring Party shall give written notice within thirty (30) days after such event to the other party or its affiliates (the “Other Party”). The Other Party shall have ninety (90) days from the date of that notice within which to acquire such staked or acquired mining property interests from the Acquiring Party at the same price and cost, and under the same terms, conditions and covenants, as transacted by the Acquiring Party.
9. Cemetery Site. The parties acknowledge the presence of the historic cemetery located within the patented mining claims Plymouth Rock Nos. 8 and 9 (Mineral Survey Number 3680), as identified and generally depicted on Exhibit D (the “Cemetery Site”). The Buyer shall not disturb the Cemetery Site, and shall afford the site the proper reverence and respect. For the purpose of preserving the Cemetery Site, the Seller shall retain title to the surface of the Cemetery Site, as well as the subsurface to the depth of fifty (50) feet below the surface. Notwithstanding the foregoing, the Buyer shall be permitted to place drill holes and conduct other exploratory activities within the Cemetery Site, so long as such activities are conducted in a nondestructive manner, do not disturb the grave sites within the Cemetery Site, and afford the Cemetery Site the proper reverence and respect.
10. Miscellaneous. In addition to the foregoing, the parties to this Agreement agree as follows:
(a) This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all parties.
(b) This Agreement shall be binding upon, and shall inure to the benefit of the parties to it and their respective successors and assigns.
(c) The parties agree from time to time to execute such additional documents as are necessary to effect the intent of the parties as manifested by this Agreement.
(d) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah.
[Signatures on Following Pages]
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| SELLER: | |
| SPENST M. HANSEN, | |
| a natural person and resident of Utah | |
| /s/ Spenst M. Hansen | |
| Dated this 19th day of October, 2017. | |
KEYSTONE SURVEYS, INC, | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, President | |
| Dated this 19th day of October, 2017. | |
MAMMOTH MINING COMPANY LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
NORTHSTAR MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
| SELLER (continued): | |
SPENST HANSEN BUSINESS TRUST, | |
| a Utah business trust | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Authorized Trustee | |
| Dated this 19th day of October, 2017. | |
TREASURE HILL MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
| BUYER: | |
| HIGH POWER EXPLORATION INC., | |
| a Delaware corporation | |
| /s/ Graham R.T. Boyd | |
| GRAHAM R.T. BOYD, Principal Geologist | |
| Dated this 19th day of October, 2017. | |
| HPX UTAH HOLDINGS INC., | |
| a Utah corporation | |
| /s/ Graham R.T. Boyd | |
| GRAHAM R.T. BOYD, Principal Geologist | |
| Dated this 19th day of October, 2017. | |
EXHIBIT A
(Description of the Subject Property)
Certain patented and unpatented mining claims, lands and water rights located in the Juab County, State of Utah, as more particularly described as follows:
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT B
(Special Warranty Deed)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Stoel Rives, LLP
Attn: Richard R. Hall
201 S. Main St., Suite 1900
Salt Lake City, Utah 84111
(Space Above For Recorder’s Use)
PARTIAL ASSIGNMENT AND ASSUMPTION
OF THE
COMBINED LEASE AGREEMENT DATED JUNE 1, 2015
THIS PARTIAL ASSIGNMENT AND ASSUMPTION OF THE COMBINED LEASE AGREEMENT DATED JUNE 1, 2015 (the “Assignment”), is made and entered into this 19th day of October, 2017 (the “Effective Date”), by and between SPENST M. HANSEN, an individual, KEYSTONE SURVEYS, INC., a Utah corporation, GEMINI MINES LLC, a Utah limited liability company, HOMANSVILLE GOLD LLC, a Utah limited liability company, KNIGHT SILVER LLC, a Utah limited liability company, MAMMOTH MINING COMPANY LLC, a Utah limited liability company, and TREASURE HILL MINES LLC, a Utah limited liability company (collectively, the “Assignor”), collectively having a mailing address at 35 Mammoth Main Street, P.O. Box 190, Eureka, Utah 84628, and HPX UTAH HOLDINGS INC., a Utah corporation, located and having a mailing address at 201 S. Main St., Suite 1100, Salt Lake City Utah 84111 (“Assignee”). Assignor and Assignee may be referred to herein individually as a “Party,” and collectively as the “Parties.”
WITNESSETH:
THAT, Assignor, for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby assign, transfer and convey unto Assignee all of Assignor’s right, title and interest in and to the lease rights in and to those certain patented mining claims listed in Exhibit A hereto, and covered under the “Mineral Rights Lease” under Part B of that certain Combined Lease Agreement dated June 1, 2015 (the “Mineral Lease”), a copy of which is attached hereto as Exhibit B. This Assignment includes only those patented mining claims listed on Exhibit A attached hereto.
This Assignment is made and accepted without covenants or warranties whatsoever, either express or implied, and Assignee, for itself and its successors and assigns, agrees to assume and perform all the obligations of Assignor under Part B and Part C (only to the extent applicable to Part B) of the Mineral Lease.
Assignor shall retain all rights and obligations under Part A and Part C (only to the extent applicable to Part B) of the Mineral Lease.
Assignor shall give notice of this Assignment to E. Ray Okelberry and Brian Okelberry, the counter party under the Mineral Lease.
IN WITNESS WHEREOF, both Assignor and Assignee have executed this Assignment effective as of the date first above written.
| ASSIGNEE: |
| HPX UTAH HOLDINGS INC., | |
| a Utah corporation | |
| /s/ Graham R.T. Boyd | |
| GRAHAM R.T. BOYD, Principal Geologist | |
| Dated this 19th day of October, 2017. |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared GRAHAM R.T. BOYD, known or identified to me to be the PRINCIPAL GEOLOGIST of HPX UTAH HOLDINGS INC., a Utah corporation, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
 |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
ASSIGNOR:
| SPENST M. HANSEN, | |
| an individual | |
| /s/ Spenst M. Hansen | |
| Dated this 19th day of October, 2017. | |
KEYSTONE SURVEYS, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, President | |
| Dated this 19th day of October, 2017. | |
GEMINI MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
HOMANSVILLE GOLD LCC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
KNIGHT SILVER, LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
MAMMOTH MINING COMPANY LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
TREASURE HILL MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| SPENST M. HANSEN, Its Manager | |
| Dated this 19th day of October, 2017. | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, an individual, and executed the foregoing instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the President of KEYSTONE SURVEYS, INC., a Utah corporation, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the Manager of GEMINI MINES LLC, a Utah limited liability company, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such limited liability company executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the Manager of HOMANSVILLE GOLD LLC, a Utah limited liability company, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such limited liability company executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the Manager of KNIGHT SILVER LLC, a Utah limited liability company, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such limited liability company executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the Manager of MAMMOTH MINING COMPANY LLC, a Utah limited liability company, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such limited liability company executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
| STATE OF UTAH | ) | |
| ) | ss. | |
| County of Salt Lake | ) |
On this 19th day of October, 2017 before me, the undersigned, a Notary Public in and for said state, personally appeared SPENST M. HANSEN, known or identified to me to be the Manager of TREASURE HILL MINES LLC, a Utah limited liability company, that executed the instrument or the person who executed the instrument on behalf of said corporation, and acknowledged to me that such limited liability company executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
| |
/s/ Gina Rea | |
| NOTARY PUBLIC for | ||
| Residing at | Salt Lake | |
| My commission expires: | 5/7/19 | |
Exhibit A
Leased Patented Mining Claims
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Exhibit B
Copy of the Combined Lease Agreement
COMBINED LEASE AGREEMENT
This AGREEMENT, effective as of June 1, 2015 (“Effective Date”),
By and Between:
E. RAY OKELBERRY and BRIAN OKELBERRY, Joint Tenants
Of
20 South 100 West, P.O. Box 415, Goshen, Utah 84633,
(Hereinafter referred to as “the Okelberrys”)
And
SPENST HANSEN, an Individual, AND
KEYSTONE SURVEYS, INC., a Utah corporation
GEMINI MINES LLC, a Utah limited liability company
HOMANSVILLE GOLD LLC, a Utah limited liability company
KNIGHT SILVER LLC, a Utah limited liability company
MAMMOTH MINING COMPANY LLC, a Utah limited liability company
TREASURE HILL MINES LLC, a Utah limited liability company
Of
35 Mammoth Main St., P.O. Box 190, Eureka, Utah 84628,
(Hereinafter collectively referred to as “Hansen & Companies”)
WITNESSETH:
For the exchange of the various leasing rights, privileges, obligations and commitments expressed in the three Parts below, and for other good and valuable consideration of the covenants to be made and performed hereunder, the receipt and sufficiency of which is hereby acknowledged, the Okelberrys and Hansen & Companies do each, jointly and severally for and on behalf of their constituent parts and parties, enter into this Combined Lease Agreement.
This Combined Lease Agreement consists of Part A, the specific terms and conditions applicable to a Grazing leasehold; Part B, the specific terms and conditions applicable to a Minerals Rights leasehold; and Part C, the general terms and conditions applicable to both leaseholds as set forth in Parts A and B separately, all as follows:
PART A: GRAZING LEASE
This component of the Combined Lease Agreement is a Grazing Lease by and between Hansen & Companies as Owners, AND the Okelberrys as Lessee.
ENT 2506:2016 PG 2 of 8
1. GRANT OF LEASE. Owners grant to Lessee an exclusive Grazing Lease with the right to graze livestock and sheep on the Owners’ [***] acres of privately owned lands, consisting of patented lode mining claims, situate in Juab and Utah Counties, Utah, in the following Townships/Ranges: T9S R2W; T9S R3W; Tl0S R2W; TIOS R3W; Tl 1S 2W; and Tl 1S R3W.
2. TERM OF LEASE. A. Primary Term. Lessee shall hold the above-described rights and interests for a primary term of Ten (10) years from the effective date inscribed above. This Grazing Lease shall not automatically terminate at the end of any leasing term period, but shall terminate only upon default of a material term of this Combined Lease Agreement.
B. Option to Extend Term. Lessee shall have the right to extend the primary term of this lease for multiple extended terms of five-years each that shall commence immediately upon the end of the previous term period, by delivering written notice to Owners.
3. HOLD-HARMLESS PROVISION. Owners and Lessee are aware that natural and other hazards to livestock and sheep exist on the above-described leased premises. Accordingly, Lessee hereby agrees to hold Owners harmless for any accident, loss or other harm that may occur to any of the Lessee’s livestock and/or sheep while on the Owners’ premises.
* * * * * * * * *
PART B: MINERAL RIGHTS LEASE
This component of the Combined Lease Agreement is a Mineral Rights Lease by and between the Okelberrys as Lessor, AND Hansen & Companies as Lessee.
1. GRANT OF LEASE. Lessor grants, leases and lets exclusively unto Lessee the right and privilege of exploring for, mining, producing, and selling minerals and ores from the lands described on Exhibit “A” attached hereto and made a part hereof, containing 252.068 acres, more or less, situated in Juab and Utah counties, State of Utah (hereinafter referred to as “Leased Premises”). This leasehold grant includes the rights to explore and develop the minerals and ore under the surface of the Leased Premises, and the rights to mine, produce and sell the same, and the unrestricted rights of ingress and egress to and from the Leased Premises. Lessor further grants to Lessee the right to make underground excavations, tunnels, shafts, openings, and other underground improvements as may be necessary or convenient for the carrying out of exploration, development, mining and processing of such minerals and ores. The above-mentioned rights, or so much thereof as are necessary and useful for the carrying on of exploration, development, mining and processing operations, may be exercised in connection with the mining of minerals and ores from other lands adjacent to the Leased Premises.
2. TERM OF LEASE. A. Primary Term. Unless sooner terminated by the provisions hereof, Lessee shall hold the above-described rights and interests for a primary term of TEN (10) years from the effective date inscribed above. Said primary term and any extended term shall be referred to herein as the “Term.”
2
ENT 2506:2016 PG 3 of 8
B. Option to Extend Term. Lessee shall have the right to extend the Term of this lease for multiple extended terms of five-years, by delivering written notice to Lessor.
3. RESERVATIONS & EXCEPTIONS FROM LEASE. Reserving, however, to the Lessor:
A. Exc1usive Right to and Use of Surface. Lessor specifically reserves the rights of unlimited use of, and of all ingress and egress upon, the surface for grazing livestock and sheep, and for all similar purposes, as granted under Part A above. Lessee expressly warrants and covenants that Lessor’s grazing rights shall have priority with respect to the surface pertaining to the Leased Premises. Lessee agrees not to interfere with or disturb such grazing activities. In the event of surface disturbance, Lessee agrees to reclaim said surface displacement in a reasonable time and manner.
B. Other Purposes. Lessor retains the right to use or lease the surface of said Leased Premises, or any part thereof at any time, and for any purpose, other than for exploration and development of underground minerals and ores and underground mining, which other use and leasing of said surface shall at all times be subject to the dominant mining rights and privileges herein specifically granted to Lessee.
C. Inspection. Lessor retains the right at all times during the Term of this Part B of the Combined Lease Agreement to go upon said Leased Premises and every part thereof for the purpose of inspecting the same and of ascertaining whether or not Lessee, and those holding by and under Lessee, are carrying out the terms, covenants, and agreements contained in this Combined Lease Agreement.
4. PRODUCTION ROYALTY. A. “Net Smelter Return Royalty;” Definition. Lessee agrees to pay to Lessor Two Percent (2%) Net Smelter Return Royalty (herein, “Production Royalty”) on minerals, ores and products therefrom, produced and sold from the Leased Premises during the Term of Part B of this Combined Lease Agreement. As used herein, the term “Production Royalty” means 2% of the amount paid to Lessee by a smelter, refiner, or other purchaser for ores, metals, concentrates, precipitates, cathodes, leachate solutions, or other products mined and sold by Lessee from the Leased Premises during the Term of Part B of this Combined Lease Agreement, less a deduction of all costs paid by Lessee for sampling and assaying, milling, concentrating, processing, smelting and refining the mined ores to yield a saleable product, and less the cost of all transportation (including packaging and insurance) of ore and products from the Leased Premises to the point of sales, and less any taxes or other levies imposed by government upon the mining, production or sale of minerals or products therefrom.
B. Definition of “Minerals” and “Product.” As used herein, “minerals” means all valuable minerals or ores containing metals or other valuable constituents, non-metallic industrial metals or rocks, clay, soil sand and gravel; “product” means any valuable metal substance or material produced from or in connection with the mining and/or processing of metalliferous minerals, and excludes petroleum, coal or hydrocarbon fuels. Lessor shall be entitled to Production Royalty only if minerals and ores are removed from property owned by the Lessor.
C. Calculation of Royalty. All Production Royalties shall be calculated on a calendar-quarter basis, and shall be paid to Lessor following the end of each quarter, within thirty days after receipt by Lessee of final payment during that quarter for such ores or products. Production Royalty shall not be paid on ores or products which are stockpiled upon the Leased Premises, or which are not recovered and sold by the Lessee or for which payment is not made to the Lessee by the purchaser thereof. Failure to pay Production Royalty to Lessor when due shall be grounds for Lessor to cancel Part B of the Combined Lease Agreement if payment is not made within 30 days after Lessor delivers written notice to Lessee.
3
ENT 2506:2016 PG 4 of 8
5. MINING METHODS. Lessee shall use such methods of mining as shall insure the extraction of the greatest possible ores consistent with prevailing good mining practice. Lessee agrees not to allow pits or excavations to become a hazard to persons or livestock.
6. WEIGHT OF MINERAL BEARING ORES. It is agreed that ore mined and taken from the Leased Premises shall be weighed and the weight thereof shall be entered in due form in books kept for such purposes by Lessee. It is agreed that the term “ton” as used herein means a ton of 2,000 pounds as shown by official railroad scale tickets, or by weight determined at the mine site scale, or by weightometer.
7. CO-MINGLING. Ores from the Leased Premises may be co-mingled with ores from other properties, provided that mined ores shall be weighed and assayed prior to co-mingling, and proper records of ores produced and valued derived from each property are kept by Lessee.
8. REPORTS. After mining operations have begun, Lessor has the right to request and receive from Lessee quarterly reports, setting forth the exact amount weighed and assayed, and all net revenues received or due for all ores mined and sold from the Leased Premises during the calendar quarter requested.
9. RIGHT OF REMOVAL. In the event Part B of the Combined Lease Agreement is terminated by forfeiture, surrender, cancellation, or the expiration of Term, the Lessee may, within one hundred eighty (180) days after termination, remove all of its equipment from the Leased Premises, and such removal shall be accomplished without unnecessary waste or injury to the Leased Premises. Improvements or equipment remaining on the Leased Premises after one hundred eighty days shall become the property of Lessor.
* * * * * * * * *
PART C: TERMS & CONDITIONS APPLICABLE TO PARTS A and B
This component of the Combined Lease Agreement is by and between the Okelberrys and Hansen & Companies, and expresses the general terms and conditions applicable to Part A and Part B, above.
1. TITLE AND INTEREST. A. Covenant of Title. Each party hereby represents and covenants to the other that to the best of its knowledge and belief that it holds the full surface and mineral title to the leasehold estate in undivided, fee-simple interest, and it has not assigned or encumbered the surface or mineral title, as applicable. Each party agrees that the other may, as applicable, pay and discharge any taxes, mortgages or other liens existing, levied or assessed on or against the applicable leasehold property, and shall have the right but not the obligation to cure any title defects. Each party shall cooperate with the other party and shall execute all documents and take such steps as either party may reasonably request in connection with such action.
4
ENT 2506:2016 PG 5 of 8
B. Other Than Entire Fee-Simple Interest. In the event that the true and actual surface and/or mineral interest owned by a party in a leasehold estate is anything less than the entire and undivided fee simple title as specified herein, then the rights and privileges shall be applicable proportionately. In the event that a party does not own the surface estate and the other party is obligated to pay fee or surface damages to the true and actual owner, then the full amount paid shall be set off against any payments due.
2. COMPLIANCE WITH LAW. Each party covenants and agrees during the continuance of this Combined Lease Agreement that it will fully comply with all the provisions, terms and conditions of all federal, state and local laws, regulations, ordinances and rules.
3. NOTICES. It is agreed that any notice required or permitted to be given under the provisions of this Combined Lease Agreement may be delivered in person or sent by private courier or certified U.S. Mail (return receipt requested) to the address set forth at the beginning of this Agreement, or to such other address as a party may indicate in writing to the other, and such delivery shall be deemed sufficient and in full compliance with the terms of this Agreement. Notices sent by private courier or certified mail shall be considered delivered on the date set forth in the receipt, or when unsuccessful delivery was attempted.
4. ASSIGNMENT. Either party shall have the right to assign this lease as to all or part of the interest of the other, and as to all or any part of the leasehold estates covered hereby.
5. TAXES. During the period of this Combined Lease Agreement, each party shall separately pay the property taxes levied or assessed upon or against its own property.
6. DEFAULT AND TERMINATION. A. Default; Procedures Before Termination or Forfeiture. It is agreed that this Combined Lease Agreement shall not be deemed forfeited or terminated for failure by one party to perform in whole or in part any of the covenants until after thirty (30) days following delivery of written notice of default to that party. If default is contested, and the notified party shall have been finally judicially determined that such default or failure exists, then the defaulting party shall be given a reasonable time therefrom to cure the default or failure, or otherwise comply with any such covenant. Only upon failure to cure shall termination occur.
B. Termination By Surrender. A party may surrender its applicable rights under either Part A or Part B, and thereby terminate that applicable Part of this Combined Lease Agreement at any time by delivering written notice to the other party. In such case, each party may retain the benefit of performance of all past obligations as full liquidation damages. The remaining Parts shall continue in force unless and until the parties have surrendered both Part A and Part B. Upon surrender of both Parts, all rights and privileges, on the one hand, and all obligations and commitments on the other hand, shall immediately cease.
7. ENFORCEMENT. All prior agreements are revoked and are hereby deemed null and void. This Agreement shall be applicable to all successors of the parties and shall be governed by the laws and construed by the courts and administrative agencies of the State of Utah. Should it become necessary to enforce any provision of this Combined Lease Agreement, the party prevailing in such action or effort shall be entitled to recover all direct costs incurred to enforce its rights, including reasonable attorney, expert and witness fees.
5
ENT 2506:2016 PG 6 of 8
IN WITNESS WHEREOF, the undersigned have executed this Combined Lease Agreement to be effective on the day and year first above written:
E. RAY OKELBERRY and BRIAN OKELBERRY, Joint Tenants
| /s/ E. Ray Okelberry | /s/ Brian Okelberry | |
E. Ray Okelberry, as Joint Tenant |
Brian Okelberry, as Joint Tenant |
SPENST HANSEN
| /s/ Spenst Hansen | |
| For and on Behalf of: | |
| HIMSELF, as an Individual | |
| KEYSTONE SURVEYS, INC., a Utah corporation, as its President | |
| GEMINI MINES LLC, a Utah limited liability company, as its Manager | |
| HOMANSVILLE GOLD LLC, a Utah limited liability company, as its Manager | |
| KNIGHT SILVER LLC, a Utah limited liability company, as its Manager | |
| MAMMOTH MINING COMPANY LLC, a Utah limited liability company, as its Manager | |
| TREASURE HILL MINES LLC, a Utah limited liability company, as its Manager | |
ACKNOWLEDGMENTS
| STATE OF UTAH | ) | ||
| SS. | |||
| COUNTY OF | UTAH | ) | |
On the 29th day of July , 2015, before me a Notary Public in and for said County and State, personally appeared E. RAY OKELBERRY, Joint Tenant, who being duly sworn did state that he executed the above instrument on behalf of himself and the joint tenancy.
 | ||
| /s/ Keith Clay O’Dell | ||
| Notary Public | ||
| My Commission Expires | 1/13/19 | |
6
ENT 2506:2016 PG 7 of 8
| STATE OF UTAH | ) | ||
| SS. | |||
| COUNTY OF | UT | ) | |
On the 29 day of July, 2015, before me a Notary Public in and for said County and State, personally appeared BRIAN OKELBERRY, Joint Tenant, who being duly sworn did state that he executed the above instrument on behalf of himself and the joint tenancy.
| /s/ Keith Clay O’Dell |  | |
| Notary Public | ||
| My Commission Expires | 1/13/19 |
| STATE OF UTAH | ) | ||
| SS. | |||
| COUNTY OF | UTAH | ) | |
On the 12 day of June, 2015, before me a Notary Public in and for said County and State, personally appeared SPENST HANSEN, who being duly sworn did state that he is the President of: KEYSTONE SURVEYS, INC., a Utah corporation, and the Manager of the following Utah limited liability companies: GEMINI MINES LLC, HOMANSVILLE GOLD LLC, KNIGHT SILVER LLC, MAMMOTH MINING COMPANY LLC, and TREASURE HILL MINES LLC, and that he executed the above instrument on behalf of himself and of said business entities by authority of their representative Board and/or Members, and he acknowledged to me that he and said business entities each did execute the same.
| /s/ Benjamin Glazner |  | |
| Notary Public | ||
| My Commission Expires | 7/28/2017 |
7
ENT 2506:2016 PG 8 of 8
EXHIBIT A
To the Combined Lease Agreement, dated June 1, 2015, by and between the Okelberrys AND Hansen & Companies, covering under Part B thereof, the Okelberrys' 100% ownership of the following patented mining claims situate in Juab and Utah counties, State of Utah:
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
8
ASSIGNMENT
For Ten Dollars ($10.00) and other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, KEYSTONE SURVEYS, INC., a Utah corporation, having a mailing address of 35 Mammoth Main Street, P.O. Box 190, Eureka, Utah 84628 (the “Assignor”), as Assignor, to and for the benefit of HPX UTAH HOLDINGS INC., a Utah corporation, located and having a mailing address at 201 S. Main St., Suite 1100, Salt Lake City Utah 84111 (the “Assignee”), as Assignee, sells, assigns, and transfers to the Assignee and the Assignee hereby accepts, all right, title, and interest in and to the three (3) Prospecting Application and Permits filed by Assignor with the US Bureau of Land Management, as more particularly described in the attached Exhibit A.
IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment by their duly authorized representatives as of October 19, 2017.
| ASSIGNOR: | |
| KEYSTONE SURVEYS, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| Spenst M. Hansen, President | |
| Dated this 19th day of October, 2017. | |
| ASSIGNEE: | |
| HPX UTAH HOLDINGS INC., | |
| a Utah corporation | |
| /s/ GRAHAM R.T. BOYD | |
| GRAHAM R.T. BOYD, Principal Geologist | |
| Dated this 19th day of October, 2017. |
EXHIBIT A
Prospecting Application and Permits –
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
2
EXHIBIT C
(Depiction of the Areas of Interest)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT D
(Description of the Cemetery Site)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Exhibit 10.11
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
PURCHASE AND SALE AGREEMENT
(Mammoth Group Properties)
This PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the 4th day of October, 2018 (the “Effective Date”), by and between MAMMOTH MINING COMPANY LLC, a Utah limited liability company, CENTRAL STANDARD GOLD MINES, INC., a Utah corporation, MAMMOTH MINING COMPANY, a Nevada corporation, GEMINI MINES LLC, a Utah limited liability company, VICTORIA SILVER MINES, INC., a Utah corporation, KEYSTONE SURVEYS, INC., and SPENST M. HANSEN, aka SPENST HANSEN, an individual (collectively “Seller”), and HIGH POWER EXPLORATION, INC., a Delaware corporation and HPX UTAH HOLDINGS INC., a Utah corporation (collectively, “Buyer”).
RECITALS
WHEREAS, Seller is the owner of certain patented mining claims located in Juab and Utah Counties, State of Utah, as more particularly described on attached Exhibit A (the “Mining Claims”), less and excepting those certain surface rights that are reserved and retained by Seller, as more particularly identified by table and described in Exhibit A as the “Mammoth Town Area Excluded Surface Rights”). As thusly qualified, Seller desires to sell to Buyer the Mining Claims, together with any and all interests, rights and appurtenances thereto, and with any and all tenements, hereditaments, and appurtenances thereunto belonging (collectively with the Mining Claims, the “Subject Property”); and
WHEREAS, Buyer desires to purchase and acquire Seller’s interest in the Subject Property from Seller, and Seller desires to sell and convey Seller’s interest in the Subject Property to Buyer, all subject to and in accordance with the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon the terms and conditions of this Agreement, Seller hereby transfers, grants and conveys to Buyer, and Buyer hereby acquires from Seller, the Subject Property.
2. Purchase Price. The aggregate amount to be paid by Buyer to Seller for the acquisition of the Subject Property in accordance with the terms and conditions of this Agreement shall be [***] (the “Purchase Price”). The Purchase Price shall be payable as set forth in Exhibit B attached hereto.
3. Prorations and Credits. Buyer and Seller agree that Buyer shall pay all closing costs and all real property taxes, assessments and other similar matters pertaining to the Subject Property, including those due on November 30, 2018, and that no prorations or credits are to be made or due.
4. The Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement shall be held concurrent with the execution of this Agreement (the “Closing Date”).
At the Closing the following shall occur, all of which shall be considered as taking place simultaneously:
(a) The Seller shall execute and deliver to Metro National Title Company (the “Escrow Agent”) a fully-executed Special Warranty Deed (the “Deed”) for the Subject Property in the form attached hereto as Exhibit C. The Escrow Agent shall hold the Deed, and deliver it to Buyer, in accordance with the terms and conditions of Section 5 of this Agreement.
(b) The Seller and Buyer shall execute and deliver to the Escrow Agent the Escrow Agreement and Instructions.
(c) The Buyer shall deliver to the Seller, the Purchase Price, as set forth in Exhibit B.
(d) The Seller and Buyer shall execute such documents and, further, take such other actions as are reasonably necessary and appropriate to effectuate the Closing in accordance with this Agreement.
(e) Buyer shall pay all of the Escrow Agent’s fees and costs incurred in connection with the transaction. Following delivery of the Deed, Buyer shall be responsible for the recording of the Deed.
5. Transfer of Title. Following the Closing of the transaction contemplated by this Agreement, the Escrow Agent shall hold the Deed in escrow until the entire Purchase Price has been paid by Buyer to Seller in accordance with Exhibit B of this Agreement.
(a) Upon payment of the entire Purchase Price by Buyer in accordance with Exhibit B, the Escrow Agent shall release and deliver to Buyer the Deed.
(b) If Buyer fails or refuses to make payment of the Remaining Balance as set forth in Exhibit B, Seller shall have the right, following (1) written notice of the alleged default to Buyer and the Escrow Agent, and (2) a thirty (30) day opportunity to cure by Buyer following receipt of the written notice, to direct the Escrow Agent to return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments as liquidate damages, and this Agreement shall terminate and be of no further force or effect.
(c) If Buyer terminates this Agreement as set forth in Section 10 of this Agreement, the Escrow Agent shall return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments, and this Agreement shall terminate and be of no further force or effect.
6. Buyer’s Representations. The Buyer represents to Seller as of the date hereof as follows:
(a) Buyer has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Except as set forth in Section 7, Buyer is purchasing the Subject Property on and in an as-is, where-is, and with all faults basis and condition, subject to all defects, whether latent or patent, risks or liabilities, including, without limitation, any and all environmental defects, risks, liabilities, or conditions. Except as expressly stated herein, Buyer is relying solely on its own and its agents’ or consultants’ investigations of the Subject Property with respect to all matters, as of the Effective Date. Buyer hereby agrees that it accepts the Subject Property on and after the Closing Date on such basis and condition. Further, Buyer waives any and all right of claim, either prior to, at, or after the Closing Date that the purchase and sale is or was on any other basis or condition. Buyer shall be deemed to have released, discharged and acquitted Seller from any and all claims or causes of action, whatsoever, relating to the Subject Property.
(c) Buyer agrees, during the term of this Agreement, to provide Seller, upon its reasonable request, with the right to access, enter upon and inspect the Subject Property; and Buyer further agrees to provide Seller with access to and copies of all technical, interpretative and other consultative data and reports (geologic, geochemical, and geophysical).
(d) Buyer agrees, that if this Agreement terminates pursuant to Section 5(b) of this Agreement, to surrender the Subject Property to Seller and to defend, indemnify and hold Seller harmless regarding all of Buyer’s obligations, liens and other liabilities (i) to its third party contractors, suppliers, and the like, and (ii) for all reclamation and remediation resulting from Buyer’s activities after the Effective Date; and Buyer further agrees to remove all of Buyer’s personal property from the Subject Property within six (6) months after Buyer’s termination and surrender under this Agreement, or such personal property shall become the property of the Seller after the six-month period.
7. Seller’s Representations. The Seller represents to Buyer as of the date hereof as follows:
(a) Seller has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Seller has not previously granted, conveyed, sold, mortgaged, pledged, hypothecated or otherwise transferred any interest in the Subject Property to any other person or entity, and is not aware any actual or threatened claim of title by any third party, by, through or under Seller, but not otherwise, to the Subject Property.
(c) Except as otherwise disclosed by Seller to Buyer in writing prior to Closing, Seller has not received written notice of any claims, actions, suits, or other proceedings pending or threatened by any governmental department or agency, or any other entity or person, pertaining to the Subject Property.
(d) Other than any general real property taxes for the year 2018, to Seller’s knowledge, there are no liabilities or obligations related to the Subject Property which Seller is obligated to satisfy on, before or after the Closing.
(e) Seller agrees, during the term of this Agreement, that Buyer shall have all necessary access to, entry upon, and use of the Subject Properties to conduct mining exploration and development activities; and Seller further agrees to execute such documents and take all other actions as are reasonably necessary and appropriate for Buyer to effectuate these activities.
8. Seller’s and Buyer’s Respective Mining Activities. Seller and Buyer understand and agree as follows:
(a) Seller has retained and reserved unto itself, and its affiliates, heirs and assigns, all ownership of the “Mammoth Town Area Excluded Surface Rights”, identified in Table 2 of Exhibit A, which pertain to certain building lots and the Mammoth Mine Center in the Mammoth town area. Buyer understands and agrees that Seller shall preserve its ongoing surface ownership of the Mammoth town area properties, improvements, and related activities, after the Effective Date hereof.
(b) Seller understands and agrees that Buyer desires to conduct exploration and development activities at the Subject Property. Seller further agrees that during the term of this Agreement Buyer shall have the right, with respect to the entirety of the surface and mineral estates of all of the Subject Property, to enter onto and undertake mining exploration, investigation and development activities, to sample and conduct exploratory drilling activities, and conduct metallurgical analysis.
(c) Seller and Buyer agree to keep each other reasonably informed of their respective proposed and actual activities referred to above in this Section, and to not unreasonably interfere with the other party’s activities or other rights, but to work with the other party in achieving workable alternatives for both, when necessary.
9. Miscellaneous. In addition to the foregoing, the parties to this Agreement agree as follows:
(a) This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all parties.
(b) This Agreement shall be binding upon, and shall inure to the benefit of the parties to it and their respective successors and assigns.
(c) The parties agree from time to time to execute such additional documents as are necessary to effectuate the intent of the parties as manifested by this Agreement.
(d) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah, and the United States of America.
(e) Concurrent with the execution of this Agreement, the parties shall execute and acknowledge a memorandum of this Agreement in the form attached hereto as Exhibit D. The executed memorandum of agreement shall be recorded in real estate records of Juab and Utah Counties, Utah. This Agreement will not be recorded.
10. Termination. Buyer shall have the right to terminate this Agreement at any time upon written notice to Seller and the Escrow Agent, in which event, Section 5(c) of this Agreement shall apply.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| SELLER: | |
| MAMMOTH MINING COMPANY LLC, | |
| a Utah limited liability company |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its Manager | ||
| Dated this 4th day of October, 2018. | ||
| CENTRAL STANDARD GOLD MINES, INC., | |
| a Utah corporation |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its President | ||
| Dated this 4th day of October, 2018. | ||
| MAMMOTH MINING COMPANY, | |
| a Nevada corporation |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its President | ||
| Dated this 4th day of October, 2018. | ||
| GEMINI MINES LLC, | |
| a Utah limited liability company |
| /s/ Spenst M. Hansen | ||
| SPENST M. HANSEN, Its Manager | ||
|
Dated this 4th day of October, 2018. | ||
| SELLER (cont’d): |
| VICTORIA SILVER MINES, INC., | |
| a Utah corporation |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its President | ||
| Dated this 4th day of October, 2018. | ||
| KEYSTONE SURVEYS, INC., | |
| a Utah corporation |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its President | ||
| Dated this 4th day of October, 2018. | ||
| SPENST M. HANSEN, aka SPENST HANSEN, | |
| an individual |
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, aka SPENST HANSEN | ||
|
Dated this 4th day of October, 2018. | ||
| BUYER: |
| HIGH POWER EXPLORATION, INC., | |
| a Delaware corporation |
| /s/ Eric Finlayson | ||
| By: ERIC FINLAYSON, Its President | ||
| Dated this 4th day of October, 2018. | ||
| HPX UTAH HOLDINGS INC., | |
| a Utah corporation |
| /s/ Eric Finlayson | ||
| By: ERIC FINLAYSON, Its Director | ||
| Dated this 4th day of October, 2018. | ||
EXHIBIT A
(Mammoth Group Properties)
DESCRIPTION OF THE SUBJECT PROPERTY
Certain patented mining claims, land, water rights and leasehold interests, located in Juab County and Utah County, State of Utah, with a reservations of Surface Rights, retained by Seller and its affiliates, assigns and heirs, all as separately identified in the following Tables, and more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT B
Purchase Price Payment Schedule
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT C
(Special Warranty Deed)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Schedule “A”
(Mammoth Group Properties)
DESCRIPTION OF THE SUBJECT PROPERTY
Certain patented mining claims, land, water rights and leasehold interests, located in Juab County and Utah County, State of Utah, with a reservations of Surface Rights, retained by Seller and its affiliates, assigns and heirs, all as separately identified in the following Tables, and more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT D
(Memorandum of Purchase and Sale Agreement)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Exhibit 10.12
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
PURCHASE AND SALE AGREEMENT
(Northstar Group Properties)
This PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the 4th day of October, 2018 (the “Effective Date”), by and between KNIGHT SILVER LLC, a Utah limited liability company, NORTHSTAR MINES LLC, a Utah limited liability company, PROCESSING AND RECOVERY LLC, a Utah limited liability company, MAMMOTH MINING COMPANY LLC, a Utah limited liability company, MAMMOTH MINING COMPANY, a Nevada corporation, CENTRAL STANDARD GOLD MINES, INC., a Utah corporation, KEYSTONE SURVEYS, INC., a Utah corporation, VICTORIA SILVER MINES, INC., a Utah corporation, and SPENST HANSEN BUSINESS TRUST, a Utah business trust (collectively "Seller", whose address is 35 Mammoth Main St., P.O. Box 190, Eureka, UT 84628); and HIGH POWER EXPLORATION, INC., a Delaware corporation and HPX UTAH HOLDINGS INC., a Utah corporation (collectively, “Buyer”, whose address is 654-999 Canada Place, Vancouver, BC, Canada V6C 3E1).
RECITALS
WHEREAS, Seller is the owner of certain patented mining claims located in Juab and Utah Counties, State of Utah, as more particularly described on attached Exhibit A (the “Northstar Mining Claims”);
WHEREAS, Seller is the owner of certain patented mining claims located in Juab County, State of Utah, as more particularly described on attached Exhibit B (the “Bessarabia Mining Claims”);
WHEREAS, Seller desires to sell to Buyer the Northstar Mining Claims and the Bessarabia Mining Claims, together with any and all interests, rights and appurtenances thereto as set forth in Exhibit A, as well as any and all improvements thereon (if any), subject to reservations of access and mineral rights referred to as “Northstar and Bessarabia Excluded Mineral Rights” set forth in Section 9(a) of this Agreement and less and excepting those certain surface rights pertaining the Bessarabia Mining Claims that are reserved and retained by Seller, as set forth in Exhibit B (collectively and as thusly qualified, the “Mining Claims”);
WHEREAS, Seller also desires to grant to Buyer certain RIGHTS OF ENTRY (ROW) to certain patented mining claims located in Juab and Utah Counties, State of Utah, as more particularly described on attached Exhibit C (the “Chief No. 2 ROW”), as further set forth in Section 6 of this Agreement; and
WHEREAS, Buyer desires to purchase and acquire Seller interest in the Mining Claims and the Chief No. 2 ROW (the “Subject Property”) from Seller, and Seller desires to sell and convey Seller’s interest in said Subject Property to Buyer, all subject to and in accordance with the terms and conditions of this Agreement.
1
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon the terms and conditions of this Agreement, Seller hereby transfers, grants and conveys to Buyer, and Buyer hereby acquires from Seller, the Subject Property.
2. Purchase Price. The aggregate amount to be paid by Buyer to Seller for the acquisition of the Subject Property in accordance with the terms and conditions of this Agreement shall be [***] (the “Purchase Price”). The Purchase Price shall be payable as set forth in Exhibit D attached hereto.
3. Prorations and Credits. Buyer and Seller agree that Buyer shall pay all closing costs and all real property taxes, assessments and other similar matters pertaining to the Subject Property, including those due on November 30, 2018, and that no prorations or credits are to be made or due.
4. The Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement shall be held concurrent with the execution of this Agreement (the “Closing Date”).
At the Closing the following shall occur, all of which shall be considered as taking place simultaneously:
(a) The Seller shall execute and deliver to Metro National Title Company (the “Escrow Agent”) a fully-executed Special Warranty Deed (the “Deed”) for the Subject Property in the form attached hereto as Exhibit E. The Escrow Agent shall hold the Deed, and deliver it to Buyer, in accordance with the terms and conditions of Section 5 of this Agreement.
(b) The Seller and Buyer shall execute and deliver to the Escrow Agent the Escrow Agreement and Instructions.
(c) The Buyer shall deliver to the Seller, the Purchase Price, as set forth in Exhibit D.
(d) The Seller and Buyer shall execute such documents and, further, take such other actions as are reasonably necessary and appropriate to effectuate the Closing in accordance with this Agreement.
(e) Buyer shall pay all of the Escrow Agent’s fees and costs incurred in connection with the transaction. Following delivery of the Deed, Buyer shall be responsible for the recording of the Deed.
5. Transfer of Title. Following the Closing of the transaction contemplated by this Agreement, the Escrow Agent shall hold the Deed in escrow until the entire Purchase Price has been paid by Buyer to Seller in accordance with Exhibit D of this Agreement.
(a) Upon payment of the entire Purchase Price by Buyer in accordance with Exhibit D, the Escrow Agent shall release and deliver the Deed to Buyer.
(b) If Buyer fails or refuses to make payment of the Remaining Balance as set forth in Exhibit D, Seller shall have the right, following (1) written notice of the alleged default to Buyer and the Escrow Agent, and (2) a thirty (30) day opportunity to cure by Buyer following receipt of the written notice, to direct the Escrow Agent to return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments as liquidated damages, and this Agreement shall terminate and be of no further force or effect.
2
(c) If Buyer terminates this Agreement as set forth in Section 11 of this Agreement, the Escrow Agent shall return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments, and this Agreement shall terminate and be of no further force or effect.
6. Access. Seller shall convey to Buyer a right of ingress, egress, and access to and through the Chief No. 2 shaft, which is located in the NE¼NW¼SE¼ of Section 18, Township 10 South, Range 2 West of the Salt Lake Base and Meridian (and approximately located at the following coordinates: NAD83 State Plane Utah Central N: 7152674 and E: 1470696), and the underground workings on the patented mining claims described on Exhibit C, to other properties held, now or in the future, by Buyer and their respective successors and assigns (the “Chief No. 2ROW”). The Chief No. 2 ROW will be for the benefit of other properties held, now or in the future, by Buyer and their respective successors and assigns and the patented mining claims described on Exhibit C. The parties agree to execute such documents and take all other actions as are reasonably necessary and appropriate to reflect of record that the property subject to the Chief No. 2 ROW is subject to the Chief No. 2 ROW.
7. Buyer’s Representations. The Buyer represents to Seller as of the date hereof as follows:
(a) Buyer has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Except as set forth in Section 8, Buyer is purchasing the Subject Property on and in an as-is, where-is, and with all faults basis and condition, subject to all defects, whether latent or patent, risks or liabilities, including, without limitation, any and all environmental defects, risks, liabilities, or conditions. Except as expressly stated herein, Buyer is relying solely on its own and its agents’ or consultants’ investigations of the Subject Property with respect to all matters, as of the Effective Date. Buyer hereby agrees that it accepts the Subject Property on and after the Closing Date on such basis and condition. Further, Buyer waives any and all right of claim, either prior to, at, or after the Closing Date that the purchase and sale is or was on any other basis or condition. Buyer shall be deemed to have released, discharged and acquitted Seller from any and all claims or causes of action, whatsoever, relating to the Subject Property.
(c) Buyer agrees, during the term of this Agreement, to provide Seller, upon its reasonable request, with the right to access, enter upon and inspect the Subject Property; and Buyer further agrees to provide Seller with access to and copies of all technical, interpretative and other consultative data and reports (geologic, geochemical, and geophysical).
(d) Buyer agrees, that if this Agreement terminates pursuant to Section 5(b) of this Agreement, to surrender the Subject Property to Seller and to defend, indemnify and hold Seller harmless regarding all of Buyer’s obligations, liens and other liabilities (i) to its third party contractors, suppliers, and the like, and (ii) for all reclamation and remediation resulting from Buyer’s activities after the Effective Date; and Buyer further agrees to remove all of Buyer’s personal property from the Subject Property within six (6) months after Buyer’s termination and surrender under this Agreement, or such personal property shall become the property of the Seller after the six-month period.
8. Seller’s Representations. The Seller represents to Buyer as of the date hereof as follows:
(a) Seller has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
3
(b) Seller has not previously granted, conveyed, sold, mortgaged, pledged, hypothecated or otherwise transferred any interest in the Subject Property to any other person or entity, and is not aware any actual or threatened claim of title by any third party, by, through or under Seller, but not otherwise, to the Subject Property.
(c) Except as otherwise disclosed by Seller to Buyer in writing prior to Closing, Seller has not received written notice of any claims, actions, suits, or other proceedings pending or threatened by any governmental department or agency, or any other entity or person, pertaining to the Subject Property.
(d) Other than any general real property taxes for the year 2018, to Seller’s knowledge, there are no liabilities or obligations related to the Subject Property which Seller is obligated to satisfy on, before or after the Closing.
(e) Seller agrees, during the term of this Agreement, that Buyer shall have all necessary access to, entry upon, and use of the Subject Properties to conduct mining exploration and development activities; and Seller further agrees to execute such documents and take all other actions as are reasonably necessary and appropriate for Buyer to effectuate these activities.
9. Seller’s and Buyer’s Respective Mining Activities. Seller and Buyer understand and agree as follows:
(a) Seller shall at Closing retain and reserve unto itself, and its affiliates, heirs and assigns, all of Seller’s interest in the Northstar Mining Claims and the Bessarabia Mining Claims to an elevation of 5,590 above sea level (the “Northstar and Bessarabia Excluded Mineral Rights”). Seller also retains and reserves unto itself, and its affiliates, heirs and assigns, all of Seller’s ownership interest in the surface rights to the Bessarabia Mining Claims. Seller hereby conveys to Buyer all of Seller’s ownership interest in the surface rights to the Northstar Mining Claims. Buyer and Seller acknowledge and agree that the reservation of the Northstar and Bessarabia Excluded Mineral Rights shall reserve to Seller the saleable clay, silica, iron oxides and quartz material deposits located at or above an elevation of 5,590 above sea level, but that such reservation expressly excludes all other minerals on the Subject Property, expressly including all Metallic Minerals, which minerals shall be transferred to Buyer. For purposes of this Agreement, “Metallic Minerals” shall be defined to include minerals with a high specific gravity and/or metallic luster, such as gold, silver, lead, copper, zinc, molybdenum, titanium, tungsten, uranium, tin, etc., but shall exclude any such Metallic Minerals that are intermingled within any economically-recoverable clay, iron oxides, silica and quartz mineral deposits located at or above an elevation of 5,590 above sea level. The economic recoverability of a clay, iron oxides, silica or quartz mineral deposit shall be determined by Seller in its reasonable and professional judgment. Buyer understands and agrees that Seller shall undertake or continue its ongoing surface development activities, including open pit mining, after the Effective Date hereof, at the Bessarabia Mining Claims (including related underground activities relating to the development of saleable clay, iron oxides, silica and quartz). Seller understands and agrees that Buyer may undertake exploration, development and extraction activities, including open pit mining, after the Effective Date hereof, at the Subject Property (including underground activities relating to the exploration, development and extraction of Metallic Minerals located at or above an elevation of 5,590 above sea level).
4
(b) Seller understands and agrees that Buyer desires to conduct exploration and development activities at Mining Claims, Seller further agrees that during the term of this Agreement Buyer shall have the right, with respect to the entirety of the surface and mineral estates of all of the Mining Claims, to enter onto and undertake mining exploration, investigation and development activities, to sample and conduct exploratory drilling activities, and conduct metallurgical analysis.
(c) Seller and Buyer agree to keep each other reasonably informed of their respective proposed and actual activities referred to above in this Section, and to not unreasonably interfere with the other party’s activities, but to work with the other party in achieving workable alternatives for both, when necessary. In particular, Buyer agrees that it shall not do anything that in Seller’s sole determination may adversely affect Seller’s operations, ownership or rights.
10. Right of First Refusal. Seller hereby grants to Buyer the exclusive and irrevocable right of first refusal to purchase the Northstar and Bessarabia Excluded Mineral Rights (collectively, the “ROFR Interests”). In the event Seller proposes to accept a bona fide offer to purchase, directly or indirectly, all or any portion of the ROFR Interests, from a third party, Seller shall provide written notice of the offer to Buyer, and Buyer shall have a right of first refusal to acquire all or the portion of ROFR Interests that Seller proposes to sell subject to the following terms and conditions.
Buyer must notify Seller within thirty (30) days after receipt of the written notice that Buyer intends to exercise the right of first refusal. The purchase price and payment terms shall be substantially the same as those in the offer. Buyer shall have the longer of (i) forty-five (45) days or (ii) the time provided in the offer to close the purchase. If Buyer fails to exercise the right of first refusal and Seller fails to close the transaction with the third party in accordance with the terms of the offer, this right of first refusal shall continue in full force and effect. If Buyer fails to exercise the right of first refusal and the terms or conditions of the purchase by the third party thereafter are modified, Buyer shall be given a right of first refusal with respect to the modified offer as provided herein as if it were a new offer. This right of first refusal shall remain in effect with respect to any portion of the ROFR Interests not sold pursuant to the offer.
11. Termination. Buyer shall have the right to terminate this Agreement at any time upon written notice to Seller and the Escrow Agent, in which event, Section 5(c) of this Agreement shall apply.
12. Notice. All notices (“Notices”) required or permitted in this Agreement shall be in writing and shall be delivered in person, by certified mail (return receipt requested), or via private courier to the address stated at the beginning of this Agreement, or to such other address as Buyer or Seller may indicate in writing to the other. Notice made in person shall be considered delivered on the day signed for by the receiving party. Notice made by certified mail or private courier shall be considered delivered on the date set forth on the signed return receipt, or on the last date when unsuccessful delivery was attempted.
13. Miscellaneous. In addition to the foregoing, the parties to this Agreement agree as follows:
(a) This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all parties.
(b) This Agreement shall be binding upon, and shall inure to the benefit of the parties to it and their respective successors and assigns.
(c) The parties agree from time to time to execute such additional documents as are necessary to effectuate the intent of the parties as manifested by this Agreement.
5
(d) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah, and the United States of America.
(e) Concurrent with the execution of this Agreement, the parties shall execute and acknowledge a memorandum of this Agreement in the form attached hereto as Exhibit F. The executed memorandum of agreement shall be recorded in real estate records of Juab and Utah Counties, Utah. This Agreement will not be recorded.
[Signatures on Following Page]
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| SELLER: | |
| KNIGHT SILVER LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. | |
| NORTHSTAR MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. | |
| PROCESSING AND RECOVERY LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. | |
| MAMMOTH MINING COMPANY LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. |
7
| SELLER (cont’d): | |
| MAMMOTH MINING COMPANY, | |
| a Nevada corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. | |
| CENTRAL STANDARD GOLD MINES, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. | |
| KEYSTONE SURVEYS, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. | |
| VICTORIA SILVER MINES, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. |
8
| SELLER (cont’d): | |
| SPENST HANSEN BUSINESS TRUST, | |
| a Utah business trust | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Primary Trustee | |
| Dated this 4th day of October, 2018. | |
| BUYER: | |
| HIGH POWER EXPLORATION, INC., | |
| a Delaware corporation | |
| /s/ Eric Finlayson | |
| By: ERIC FINLAYSON, President | |
| Dated this 4th day of October, 2018. | |
| HPX UTAH HOLDINGS INC., | |
| a Utah corporation | |
| /s/ Eric Finlayson | |
| By: ERIC FINLAYSON, Director | |
| Dated this 4th day of October, 2018. |
9
EXHIBIT A
(Northstar Mining Claims)
DESCRIPTION
Certain patented mining claims, land, water rights and leasehold interests, located in Juab County and Utah County, State of Utah, as more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
10
EXHIBIT B
(Bessarabia Mining Claims)
DESCRIPTION
Certain patented mining claims, land, water rights and leasehold interests, located in Juab County and Utah County, State of Utah, with a reservations of Surface Rights, retained by Seller and its affiliates, assigns and heirs, as more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
11
EXHIBIT C
(Chief No.2 ROW)
DESCRIPTION
Right of entry to certain patented mining claims located in Juab County and Utah County, State of Utah, as more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
12
EXHIBIT D
Purchase Price Payment Schedule
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
13
EXHIBIT E
(Special Warranty Deed)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
14
EXHIBIT F
(Memorandum of Purchase and Sale Agreement)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
| 15 |
Exhibit 10.13
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
PURCHASE AND SALE AGREEMENT
(Gemini Group Properties)
This PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the 4th day of October, 2018 (the “Effective Date”), by and between GEMINI MINES LLC, a Utah limited liability company, MAMMOTH MINING COMPANY LLC, a Utah limited liability company, CENTRAL STANDARD GOLD MINES, INC., a Utah corporation, MAMMOTH MINING COMPANY, a Nevada corporation, KNIGHT SILVER LLC, a Utah limited liability company, and SPENST HANSEN BUSINESS TRUST, a Utah business trust (collectively “Seller”), and HIGH POWER EXPLORATION, INC., a Delaware corporation and HPX UTAH HOLDINGS INC., a Utah corporation (collectively, “Buyer”).
RECITALS
WHEREAS, Seller is the owner of certain patented mining claims located in Juab County (only), State of Utah, as more particularly described on attached Exhibit A (the “Mining Claims”), less and excepting those certain surface rights that are reserved and retained by Seller, as more particularly identified by table and described in Exhibit A as the “Gemini Town Area Excluded Surface Rights”). As thusly qualified, Seller desires to sell to Buyer the Mining Claims, together with any and all interests, rights and appurtenances thereto, and with any and all tenements, hereditaments, and appurtenances thereunto belonging (collectively with the Mining Claims, the “Subject Property”); and
WHEREAS, Buyer desires to purchase and acquire Seller’s interest in the Subject Property from Seller, and Seller desires to sell and convey Seller’s interest in the Subject Property to Buyer, all subject to and in accordance with the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon the terms and conditions of this Agreement, Seller hereby transfers, grants and conveys to Buyer, and Buyer hereby acquires from Seller, the Subject Property.
2. Purchase Price. The aggregate amount to be paid by Buyer to Seller for the acquisition of the Subject Property in accordance with the terms and conditions of this Agreement shall be [***] (the “Purchase Price”). The Purchase Price shall be payable as set forth in Exhibit B attached hereto.
3. Prorations and Credits. Buyer and Seller agree that Buyer shall pay all closing costs and all real property taxes, assessments and other similar matters pertaining to the Subject Property, including those due on November 30, 2018, and that no prorations or credits are to be made or due.
4. The Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement shall be held concurrent with the execution of this Agreement (the “Closing Date”).
Page 1 of 11
At the Closing the following shall occur, all of which shall be considered as taking place simultaneously:
(a) The Seller shall execute and deliver to Metro National Title Company (the “Escrow Agent”) a fully-executed Special Warranty Deed (the “Deed”) for the Subject Property in the form attached hereto as Exhibit C. The Escrow Agent shall hold the Deed, and deliver it to Buyer, in accordance with the terms and conditions of Section 5 of this Agreement.
(b) The Seller and Buyer shall execute and deliver to the Escrow Agent the Escrow Agreement and Instructions.
(c) The Buyer shall deliver to the Seller, the Purchase Price, as set forth in Exhibit B.
(d) The Seller and Buyer shall execute such documents and, further, take such other actions as are reasonably necessary and appropriate to effectuate the Closing in accordance with this Agreement.
(e) Buyer shall pay all of the Escrow Agent’s fees and costs incurred in connection with the transaction. Following delivery of the Deed, Buyer shall be responsible for the recording of the Deed.
5. Transfer of Title. Following the Closing of the transaction contemplated by this Agreement, the Escrow Agent shall hold the Deed in escrow until the entire Purchase Price has been paid by Buyer to Seller in accordance with Exhibit B of this Agreement.
(a) Upon payment of the entire Purchase Price by Buyer in accordance with Exhibit B, the Escrow Agent shall release and deliver to Buyer the Deed.
(b) If Buyer fails or refuses to make payment of the Remaining Balance as set forth in Exhibit B, Seller shall have the right, following (1) written notice of the alleged default to Buyer and the Escrow Agent, and (2) a thirty (30) day opportunity to cure by Buyer following receipt of the written notice, to direct the Escrow Agent to return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments as liquidate damages, and this Agreement shall terminate and be of no further force or effect.
(c) If Buyer terminates this Agreement as set forth in Section 10 of this Agreement, the Escrow Agent shall return the Deed to Seller. In such event, upon Seller’s receipt of Deed, Seller shall retain all previously paid Purchase Price payments, and this Agreement shall terminate and be of no further force or effect.
6. Buyer’s Representations. The Buyer represents to Seller as of the date hereof as follows:
(a) Buyer has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Except as set forth in Section 7, Buyer is purchasing the Subject Property on and in an as-is, where-is, and with all faults basis and condition, subject to all defects, whether latent or patent, risks or liabilities, including, without limitation, any and all environmental defects, risks, liabilities, or conditions. Except as expressly stated herein, Buyer is relying solely on its own and its agents’ or consultants’ investigations of the Subject Property with respect to all matters, as of the Effective Date. Buyer hereby agrees that it accepts the Subject Property on and after the Closing Date on such basis and condition. Further, Buyer waives any and all right of claim, either prior to, at, or after the Closing Date that the purchase and sale is or was on any other basis or condition. Buyer shall be deemed to have released, discharged and acquitted Seller from any and all claims or causes of action, whatsoever, relating to the Subject Property.
Page 2 of 11
(c) Buyer agrees, during the term of this Agreement, to provide Seller, upon its reasonable request, with the right to access, enter upon and inspect the Subject Property; and Buyer further agrees to provide Seller with access to and copies of all technical, interpretative and other consultative data and reports (geologic, geochemical, and geophysical).
(d) Buyer agrees, that if this Agreement terminates pursuant to Section 5(b) of this Agreement, to surrender the Subject Property to Seller and to defend, indemnify and hold Seller harmless regarding all of Buyer’s obligations, liens and other liabilities (i) to its third party contractors, suppliers, and the like, and (ii) for all reclamation and remediation resulting from Buyer’s activities after the Effective Date; and Buyer further agrees to remove all of Buyer’s personal property from the Subject Property within six (6) months after Buyer’s termination and surrender under this Agreement, or such personal property shall become the property of the Seller after the six-month period.
7. Seller’s Representations. The Seller represents to Buyer as of the date hereof as follows:
(a) Seller has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Seller has not previously granted, conveyed, sold, mortgaged, pledged, hypothecated or otherwise transferred any interest in the Subject Property to any other person or entity, and is not aware any actual or threatened claim of title by any third party, by, through or under Seller, but not otherwise, to the Subject Property.
(c) Except as otherwise disclosed by Seller to Buyer in writing prior to Closing, Seller has not received written notice of any claims, actions, suits, or other proceedings pending or threatened by any governmental department or agency, or any other entity or person, pertaining to the Subject Property.
(d) Other than any general real property taxes for the year 2018, to Seller’s knowledge, there are no liabilities or obligations related to the Subject Property which Seller is obligated to satisfy on, before or after the Closing.
(e) Seller agrees, during the term of this Agreement, that Buyer shall have all necessary access to, entry upon, and use of the Subject Properties to conduct mining exploration and development activities; and Seller further agrees to execute such documents and take all other actions as are reasonably necessary and appropriate for Buyer to effectuate these activities.
Page 3 of 11
8. Seller’s and Buyer’s Respective Mining Activities. Seller and Buyer understand and agree as follows:
(a) Seller has retained and reserved unto itself, and its affiliates, heirs and assigns, all ownership of the “Gemini Town Area Excluded Surface Rights”, identified in Table 2 of Exhibit A, which pertain to certain building lots and the Mammoth Mine Center in the Mammoth town area. Buyer understands and agrees that Seller shall preserve its ongoing surface ownership of the Mammoth town area properties, improvements, and related activities, after the Effective Date hereof.
(b) Seller understands and agrees that Buyer desires to conduct exploration and development activities at the Subject Property. Seller further agrees that during the term of this Agreement Buyer shall have the right, with respect to the entirety of the surface and mineral estates of all of the Subject Property, to enter onto and undertake mining exploration, investigation and development activities, to sample and conduct exploratory drilling activities, and conduct metallurgical analysis.
(c) Seller and Buyer agree to keep each other reasonably informed of their respective proposed and actual activities referred to above in this Section, and to not unreasonably interfere with the other party’s activities or other rights, but to work with the other party in achieving workable alternatives for both, when necessary.
9. Miscellaneous. In addition to the foregoing, the parties to this Agreement agree as follows:
(a) This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all parties.
(b) This Agreement shall be binding upon, and shall inure to the benefit of the parties to it and their respective successors and assigns.
(c) The parties agree from time to time to execute such additional documents as are necessary to effectuate the intent of the parties as manifested by this Agreement.
(d) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah, and the United States of America.
(e) Concurrent with the execution of this Agreement, the parties shall execute and acknowledge a memorandum of this Agreement in the form attached hereto as Exhibit D. The executed memorandum of agreement shall be recorded in real estate records of Juab and Utah Counties, Utah. This Agreement will not be recorded.
10. Termination. Buyer shall have the right to terminate this Agreement at any time upon written notice to Seller and the Escrow Agent, in which event, Section 5(c) of this Agreement shall apply.
[Signatures on Following Page]
Page 4 of 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| SELLER: | |
| GEMINI MINES LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. | |
| MAMMOTH MINING COMPANY LLC, | |
| a Utah limited liability company | |
| /s/ Spenst M. Hansen |
| By: SPENST M. HANSEN, Its Manager | |
| Dated this 4th day of October, 2018. | |
| CENTRAL STANDARD GOLD MINES, INC., | |
| a Utah corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. | |
| MAMMOTH MINING COMPANY | |
| a Nevada corporation | |
| /s/ Spenst M. Hansen | |
| By: SPENST M. HANSEN, Its President | |
| Dated this 4th day of October, 2018. |
Page 5 of 11
| SELLER (cont’d): | ||
| KNIGHT SILVER LLC, | ||
| a Utah limited liability company | ||
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its Manager | ||
| Dated this 4th day of October, 2018. | ||
|
SPENST HANSEN BUSINESS TRUST | |
| a Utah business trust | ||
| /s/ Spenst M. Hansen | ||
| By: SPENST M. HANSEN, Its Primary Trustee | ||
| Dated this 4th day of October, 2018. | ||
Page 6 of 11
| BUYER: | ||
| HIGH POWER EXPLORATION, INC., | ||
| a Delaware corporation | ||
| /s/ Eric Finlayson | ||
| By: ERIC FINLAYSON, Its President | ||
| Dated this 4th day of October, 2018. | ||
| HPX UTAH HOLDINGS INC., | ||
| a Utah corporation | ||
| /s/ Eric Finlayson | ||
| By: ERIC FINLAYSON, Its Director | ||
| Dated this 4th day of October, 2018. | ||
Page 7 of 11
EXHIBIT A
Gemini Group Properties)
DESCRIPTION OF THE SUBJECT PROPERTY
Certain patented mining claims, land, water rights and leasehold interests, located in Juab County, State of Utah, with a reservations of Surface Rights, retained by Seller and its affiliates, assigns and heirs, all as separately identified in the following Tables, and more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Page 8 of 11
EXHIBIT B
Purchase Price Payment Schedule
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Page 9 of 11
EXHIBIT C
(Special Warranty Deed)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Page 10 of 11
EXHIBIT D
(Memorandum of Purchase and Sale Agreement)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Page 11 of 11
Exhibit 10.14
Certain identified information has been excluded from this exhibit because it is both not material and is the type that the registrant treats as private or confidential. Information that was omitted has been noted in this document with a placeholder identified by the mark “[***]”.
PURCHASE AND SALE AGREEMENT
(Oldroyd Properties)
This PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the 14 day of June, 2019 (the “Effective Date”), by and between MARK OLDROYD, an individual, whose address is 386 East Sumac Ave., Provo, Utah 84604 (“Seller”), and TINTIC COPPER AND GOLD, INC., a Utah corporation, whose address is 201 S. Main St., Suite 1100, Salt Lake City, Utah 81111 (“Buyer”).
RECITALS
WHEREAS, Seller is the owner of two patented mining claims located in Juab County, State of Utah, as more particularly described on attached Exhibit A (the “Mining Claims”).
WHEREAS, Seller desires to sell to Buyer the Mining Claims, together with any and all interests, rights and appurtenances thereto, and with any and all tenements, hereditaments, and appurtenances thereunto belonging (collectively with the Mining Claims, the “Subject Property”); and
WHEREAS, Buyer desires to purchase and acquire the Subject Property from Seller, all subject to and in accordance with the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon the terms and conditions of this Agreement, Seller hereby transfers, grants and conveys to Buyer, and Buyer hereby acquires from Seller, the Subject Property.
2. Purchase Price. The aggregate amount to be paid by Buyer to Seller for the acquisition of the Subject Property shall be [***] (the “Purchase Price”).
3. Prorations and Credits. Buyer and Seller agree that Buyer shall pay all closing costs and all real property taxes, assessments and other similar matters pertaining to the Subject Property, including those due on November 30, 2019, and that no prorations or credits are to be made or due.
4. The Closing. The closing (the “Closing”) of the transaction contemplated by this Agreement shall be held concurrent with the execution of this Agreement (the “Closing Date”).
At the Closing the following shall occur, all of which shall be considered as taking place simultaneously:
(a) The Seller shall execute a fully-executed Special Warranty Deed (the “Deed”) for the Subject Property in the form attached hereto as Exhibit B.
(b) The Buyer shall deliver to the Seller the Purchase Price.
(c) The Seller and Buyer shall execute such documents and, further, take such other actions as are reasonably necessary and appropriate to effectuate the Closing in accordance with this Agreement.
5. Buyer’s Representations. The Buyer represents to Seller as of the date hereof Buyer has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
6. Seller’s Representations. The Seller represents to Buyer as of the date hereof as follows:
(a) Seller has the requisite right, power and authority to enter into this Agreement without obtaining the consent or approval of any governmental authority or any other person or entity to which Buyer may be subject.
(b) Seller holds 100% fee simple ownership in the Subject Property.
(c) Except as otherwise disclosed by Seller to Buyer in writing prior to Closing, Seller has not received written notice of any claims, actions, suits, or other proceedings pending or threatened by any governmental department or agency, or any other entity or person, pertaining to the Subject Property.
(d) Other than any general real property taxes for the year 2019, to Seller’s knowledge, there are no liabilities or obligations related to the Subject Property which Seller is obligated to satisfy on, before or after the Closing.
7. Removal of Historic Artifacts. Up until December 31, 2020 (the “Removal Deadline”), Seller shall have the right to take possession of and remove any artifacts, old mining equipment and other historic items located on the Subject Property, at Seller’s sole cost and expense, whether known or unknown to the parties as of the Closing Date. In the event Buyer discovers any such items on the Subject Property prior to the Removal Deadline that were previously unknown to the parties, Buyer shall notify Seller of the presence of such items and Seller shall have up until the Removal Deadline to remove such items.
8. Miscellaneous. In addition to the foregoing, the parties to this Agreement agree as follows:
(a) This Agreement constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations and understandings of the parties with respect thereto. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all parties.
(b) This Agreement shall be binding upon, and shall inure to the benefit of the parties to it and their respective successors and assigns.
(c) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Utah.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
| SELLER: | ||
| MARK OLDROYD, | ||
| an individual | ||
| /s/ Mark Oldroyd | ||
| Dated this 14 day of June, 2019. | ||
| BUYER: | ||
| TINTIC COPPER AND GOLD, INC. | ||
| a Utah corporation | ||
| /s/ Graham Boyd | ||
| Name: | Graham Boyd | |
| Title: | Vice President | |
| Dated this 14 day of June, 2019. | ||
EXHIBIT A
(Oldroyd Properties)
DESCRIPTION OF THE SUBJECT PROPERTY
Certain patented mining claims located in Juab County, State of Utah, as more particularly described below.
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
EXHIBIT B
(Special Warranty Deed)
This exhibit has been omitted pursuant to Item 601(a)(5) of Regulation S-K because the information contained herein is not material and is not otherwise publicly disclosed. The registrant undertakes to furnish supplementally a copy of this schedule to the Securities and Exchange Commission upon request.
Exhibit 10.16
IVANHOE ELECTRIC, INC.
2022 LONG TERM INCENTIVE PLAN
ARTICLE 1.
PURPOSE
This 2022 Long Term Incentive Plan was adopted by the Company’s Board of Directors on June , 2022, and approved by the Company’s stockholders on June , 2022. The purpose of the Ivanhoe Electric, Inc. 2022 Long Term Incentive Plan (as it may be amended or restated from time to time, the “Plan”) is to recognize the contributions made by our employees, consultants and directors, and to provide these individuals with an additional incentive to use maximum efforts for the future success of Ivanhoe Electric, Inc. (the “Company”). The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
ARTICLE 2.
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 “Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 11. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 11.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.
2.2 “Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.
2.3 “Applicable Law” shall mean any applicable law, including without limitation: (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (c) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
2.4 “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, an Other Stock Based award, a Deferred Share Unit award or a Dividend Equivalent award, which may be awarded or granted under the Plan.
2.5 “Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.
2.6 “Board” shall mean the Board of Directors of the Company.
2.7 “Cause” with respect to a Holder shall mean “Cause” (or any term of similar effect) as defined in such Holder’s employment agreement with the Company if such an agreement exists and contains a definition of Cause (or term of similar effect), or, if no such agreement exists or such agreement does not contain a definition of Cause (or term of similar effect), then Cause shall include, but not be limited to: (i) the Holder’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) the Holder’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by the Holder of any proprietary information or trade secrets of the Company or any other party to whom the Holder owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) the Holder’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Holder is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Holder. The foregoing definition does not in any way limit the Company’s ability to terminate a Holder’s employment or consulting relationship at any time as provided in the Plan, and the term “Company” will be interpreted to include any subsidiary, parent or affiliate, as appropriate.
2.8 “Change in Control” shall mean and includes each of the following, unless provided otherwise in a Holder’s applicable Award Agreement:
(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) directly or indirectly acquires beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company or any of its Subsidiaries; (ii) any acquisition by an employee benefit plan maintained by the Company or any of its Subsidiaries, (iii) any acquisition which complies with Sections 2.8(c)(i), 2.8(c)(ii) and 2.8(c)(iii); or (iv) in respect of an Award held by a particular Holder, any acquisition by the Holder or any group of persons including the Holder (or any entity controlled by the Holder or any group of persons including the Holder); or
(b) The Incumbent Directors cease for any reason to constitute a majority of the Board; or
(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
(i) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and
2
(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.8(c)(ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; and
(iii) after which at least a majority of the members of the board of directors (or the analogous governing body) of the Successor Entity were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such transaction; or
(d) The date which is 10 business days prior to the completion of a liquidation or dissolution of the Company.
Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder, whether issued prior or subsequent to the grant of any Award.
2.10 “Committee” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board or the Compensation Committee of the Board described in Article 11 hereof.
2.11 “Common Stock” shall mean the common stock of the Company, par value $0.0001 per share.
2.12 “Company” shall have the meaning set forth in Article 1.
2.13 “Consultant” shall mean any consultant or adviser engaged to provide services to the Company or any Subsidiary who qualifies as a consultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.
2.14 “Deferred Share Unit” shall mean a right to receive Shares under Article 9.
2.15 “Director” shall mean a member of the Board, as constituted from time to time.
2.16 “Director Limit” shall have the meaning set forth in Section 4.6.
3
2.17 “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 9.2.
2.18 “DRO” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.
2.19 “Effective Date” shall be June , 2022, provided that the adoption of the Plan by the Board is approved by a majority of the votes cast at a duly held meeting of stockholders held on or prior to June , 2023 at which a quorum representing a majority of the outstanding voting stock of the Company is, either in person or by proxy, present and voting.
2.20 “Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Administrator.
2.21 “Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any Subsidiary.
2.22 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per-share value of the Common Stock underlying outstanding Awards.
2.23 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
2.24 “Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows:
(a) If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, NYSE American LLC, the Toronto Stock Exchange (the “TSX”), the NASDAQ Capital Market, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(b) If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith and in accordance with Section 409A of the Code.
4
2.25 “Good Reason,” with respect to a Holder, shall mean “Good Reason” (or any term of similar effect) as defined in such Holder’s applicable Award Agreement or written employment or other agreement between a Holder and the Company or, if no such agreement exists or such agreement does not contain a definition of “Good Reason” (or term of similar effect), then “Good Reason” shall mean, without the Holder’s prior written consent and within two years following a Change in Control, (I) a material reduction of the Holder’s base salary; provided, however, that a material reduction in the Holder’s base salary pursuant to a salary reduction program affecting all or substantially all of the employees of the Company and that does not adversely affect Holder to a greater extent than other similarly situated employees shall not constitute Good Reason; or (II) the Holder being required to relocate the Holder’s primary work location to a facility or location that would increase the Holder’s one way commute distance by more than thirty-five (35) miles from the Holder’s primary work location as of immediately prior to such change. Notwithstanding the foregoing, a Holder’s Termination of Service shall not constitute a termination for “Good Reason” as a result of any event described in the preceding sentence unless (A) the Holder provides written notice outlining such conditions, acts or omissions to the Company within thirty (30) days after the first occurrence of such event, (B) to the extent correctable, the Company fails to remedy such circumstance or event within thirty (30) days following the Company’s receipt of such written notice and (C) the effective date of the Holder’s resignation for “Good Reason” is not later than thirty (30) days after the expiration of the Company’s cure period.
2.26 “Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).
2.27 “Holder” shall mean a person who has been granted an Award.
2.28 “Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.
2.29 “Incumbent Directors” shall mean for any period of 12 consecutive months, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.8(a) or 2.8(c)) whose election or nomination for election to the Board was approved by a vote of at least a majority (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) of the Directors then still in office who either were Directors at the beginning of the 12-month period or whose election or nomination for election was previously so approved. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
2.30 “Non-Employee Director” shall mean a Director of the Company who is not an Employee.
2.31 “Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6.
2.32 “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code.
5
2.33 “Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 5. An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.
2.34 “Option Term” shall have the meaning set forth in Section 5.4.
2.35 “Organizational Documents” shall mean, collectively, (a) the Company’s articles of incorporation, certificate of incorporation, bylaws or other similar organizational documents relating to the creation and governance of the Company, and (b) the Committee’s charter or other similar organizational documentation relating to the creation and governance of the Committee.
2.36 “Other Stock Based Award” shall mean a stock payment, stock bonus award, performance award or incentive award that is paid in cash, Shares or a combination of both, awarded under Section 9.1.
2.37 “Performance Criteria” shall mean the criteria (and adjustments) that the Administrator selects for an Award for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:
(a) The Performance Criteria that shall be used to establish Performance Goals are as follows: (i) net earnings or losses (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue or sales or revenue growth; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, operating cash flow and free cash flow); (vii) return on assets; (viii) return on capital (or invested capital) and cost of capital; (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs, reductions in costs and cost control measures; (xiv) expenses; (xv) working capital; (xvi) earnings or loss per share; (xvii) adjusted earnings or loss per share; (xviii) price per share or dividends per share (or appreciation in and/or maintenance of such price or dividends); (xix) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercialization of a product); (xx) implementation or completion of critical projects; (xxi) market share; (xxii) economic value, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices and (xxiii) such other performance criteria determined by the Administrator in its discretion.
(b) The Administrator, in its sole discretion, may provide that one or more determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in Applicable Accounting Standards; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; (xix) items attributable to expenses incurred in connection with a reduction in force or early retirement initiative; (xx) items relating to foreign exchange or currency transactions and/or fluctuations; or (xxi) items relating to any other unusual or nonrecurring events or changes in Applicable Law, Applicable Accounting Standards or business conditions.
6
2.38 “Performance Goals” shall mean, for a Performance Period, one or more goals established in writing by the Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a Subsidiary, division, business unit, or an individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards.
2.39 “Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, vesting of, and/or the payment in respect of, an Award.
2.40 “Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, as defined in the General Instructions to Form S-8 Registration Statement under the Securities Act (or any successor form thereto), or any other transferee specifically approved by the Administrator after taking into account Applicable Law.
2.41 “Plan” shall have the meaning set forth in Article 1.
2.42 “Prior Plan” shall mean the Company’s Equity Incentive Plan adopted on June 30, 2021.
2.43 “Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.
2.44 “Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.
2.45 “Restricted Stock Units” shall mean the right to receive Shares awarded under Article 8.
2.46 “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Effective Date.
2.47 “Securities Act” shall mean the Securities Act of 1933, as amended.
2.48 “Shares” shall mean shares of Common Stock.
2.49 “Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
7
2.50 “Substitute Award” shall mean an Award granted under the Plan in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, in any case, upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.
2.51 “Termination of Service” shall mean:
(a) As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Subsidiary.
(b) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Subsidiary.
(c) As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Subsidiary.
The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, whether a Termination of Service has occurred, whether a Termination of Service resulted from a discharge for Cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of any Program, Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relationship shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Holder ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).
8
ARTICLE 3.
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to Sections 12.1, 12.2 and 3.1(b), the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan shall be equal to the sum of (i) 3,250,000 Shares, (ii) any of the Shares which as of the Effective Date are available for issuance under the Prior Plan, or are subject to awards under the Prior Plan that, on or after the Effective Date, terminate, expire or lapse for any reason without the delivery of Shares to the holder thereof or are repurchased by the Company at the original purchase price thereof, and (iii) an annual increase on the first day of each year beginning in 2023 and ending in 2032 equal to the lesser of (A) five percent (5%) of the Shares outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board (such sum, the “Share Limit”). Notwithstanding the foregoing, and subject to Sections 12.1, 12.2 and 3.1(b), the aggregate maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options is 20,000,000 Shares. Notwithstanding the foregoing, to the extent permitted under Applicable Law, Awards that provide for the delivery of Shares subsequent to the applicable grant date may be granted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remain under the Share Limit in this Section 3.1(a) at the time that Shares would otherwise be issued in respect of such Award. As of the Effective Date, no further awards may be granted under the Prior Plan; however, any awards under the Prior Plan that are outstanding as of the Effective Date shall continue to be subject to the terms and conditions of the Prior Plan.
(b) If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. In addition, until the termination of the Plan, the following Shares shall be available for future grants of Awards under the Plan: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option or any stock option granted under the Prior Plan; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award or any equity award granted under the Prior Plan; and (iii) Shares subject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation Rights on exercise thereof. Notwithstanding anything to the contrary contained herein, Shares purchased on the open market with the cash proceeds from the exercise of Options shall not be available for future grants of Awards. Until the termination of the Plan, any Shares repurchased by the Company under Section 5.5 or Section 7.4 hereof at the same price paid by the Holder or a lower price so that such Shares are returned to the Company will again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.
(c) The number of Shares that may be issued to Directors and executive officers (collectively “Insiders” and individually an “Insider”) within any one year period, or be issuable to Insiders at any time, cannot exceed 10% of the outstanding shares of the Company.
(d) Substitute Awards shall not reduce the Shares authorized for grant under the Plan, except as may be required by reason of Section 422 of the Code.
ARTICLE 4.
GRANTING OF AWARDS
4.1 Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. Except for any Non-Employee Director’s right to Awards that may be required pursuant to the Non-Employee Director Equity Compensation Policy as described in Section 4.6, no Eligible Individual or other Person shall have any right to be granted an Award pursuant to the Plan and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly. Participation by each Holder in the Plan shall be voluntary and nothing in the Plan or any Program shall be construed as mandating that any Eligible Individual or other Person shall participate in the Plan.
9
4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such Award as determined by the Administrator in its sole discretion (consistent with the requirements of the Plan and any applicable Program). Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.
4.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
4.4 At-Will Service. Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Subsidiary, or shall interfere with or restrict in any way the rights of stockholders to elect or remove Directors or the rights of the Company and any Subsidiary, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Subsidiary. Vested and unvested Awards shall be forfeited upon a Termination of Service for Cause. Unless otherwise provided in an Award Agreement, unvested Awards are forfeited upon a voluntary resignation, vested awards are retained and not forfeited upon a Termination of Service by the Company without Cause, subject to any post-termination exercise periods, and vesting of unvested Awards may continue for the longer of (i) any notice period or (ii) three months, and otherwise unvested award are forfeited and vesting ceases upon a Termination of Service.
4.5 Foreign Holders. Notwithstanding any provision of the Plan or applicable Program to the contrary, in order to comply with the laws in countries other than the United States in which the Company and its Subsidiaries operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any foreign securities exchange or other Applicable Law, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with Applicable Law (including, without limitation, applicable foreign laws or listing requirements of any foreign securities exchange); (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; provided, however, that no such subplans and/or modifications shall increase the Share Limit or the Director Limit; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any foreign securities exchange.
10
4.6 Non-Employee Director Awards.
(a) Non-Employee Director Equity Compensation Policy. The Administrator, in its sole discretion, may provide that Awards granted to Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its sole discretion. The Non-Employee Director Equity Compensation Policy may be modified by the Administrator from time to time in its sole discretion.
(b) Director Limit. Notwithstanding any provision to the contrary in the Plan or in the Non-Employee Director Equity Compensation Policy, the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of cash- and equity-based Awards granted to a Non-Employee Director as compensation for services as a Non-Employee Director during any fiscal year of the Company may not exceed $750,000 (the applicable amount, the “Director Limit”).
ARTICLE 5.
GRANTING OF OPTIONS
5.1 Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.
5.2 Qualification of Incentive Stock Options. The Administrator may grant Options intended to qualify as Incentive Stock Options only to employees of the Company, any of the Company’s present or future “parent corporations” or “subsidiary corporations” as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any parent corporation or subsidiary corporation thereof (as defined in Section 424(e) and 424(f) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The rule set forth in the immediately preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the fair market value of stock shall be determined as of the time the respective options were granted. Any interpretations and rules under the Plan with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. Neither the Company nor the Administrator shall have any liability to a Holder, or any other Person, (a) if an Option (or any part thereof) which is intended to qualify as an Incentive Stock Option fails to qualify as an Incentive Stock Option or (b) for any action or omission by the Company or the Administrator that causes an Option not to qualify as an Incentive Stock Option, including without limitation, the conversion of an Incentive Stock Option to a Non-Qualified Stock Option or the grant of an Option intended as an Incentive Stock Option that fails to satisfy the requirements under the Code applicable to an Incentive Stock Option.
11
5.3 Option Exercise Price. The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option, as applicable, is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) or such higher price if required by the applicable stock exchange rules, including the “market price” as defined by the TSX rules. In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) or such higher price if required by the applicable stock exchange rules. Notwithstanding the foregoing, in the case of an Option that is a Substitute Award, the exercise price per share of the Shares subject to such Option, as applicable, may be less than the Fair Market Value per share on the date of grant; provided that the exercise price of any Substitute Award shall be determined in accordance with the applicable requirements of Section 424 and 409A of the Code.
5.4 Option Term. The term of each Option (the “Option Term”) shall be set by the Administrator in its sole discretion; provided, however, that the Option Term shall not be more than (a) ten (10) years from the date the Option is granted to an Eligible Individual (other than a Greater Than 10% Stockholder), or (b) five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder or the first sentence of this Section 5.4 and without limiting the Company’s rights under Section 10.7, the Administrator may extend the Option Term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder or otherwise, and may amend, subject to Section 10.7 and 12.1, any other term or condition of such Option relating to such Termination of Service of the Holder or otherwise.
5.5 Option Vesting and Early Exercise. The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and set forth in the applicable Award Agreement. Unless otherwise determined by the Administrator in the Award Agreement, the applicable Program or by action of the Administrator following the grant of the Option, (a) Options will vest 25% on the first anniversary of the grant date and 25% on each of the following three anniversaries of the grant date, and are subject to acceleration in the discretion of the Administrator, (b) no portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except that an Option may continue to vest for the longer of any notice period or three months following Termination of Service by the Company without Cause, and (c) except as provided in (b), the portion of an Option that is unexercisable at a Holder’s Termination of Service shall automatically expire on the date of such Termination of Service. Notwithstanding the vesting criteria, if permitted by the Administrator, at the election of the Holder an Option may be exercised in whole or in part at any time as to Shares that have not yet vested, conditioned upon the Holder executing a Restricted Stock Purchase Agreement with respect to the unvested Shares and which may contain a repurchase right on behalf of the Company with respect to such Shares. Otherwise, the Company will not have a repurchase right for shares acquired upon exercise of Options.
ARTICLE 6.
EXERCISE OF OPTIONS
6.1 Exercise and Payment. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.
12
6.2 Manner of Exercise. Except as set forth in Section 6.3, all or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock plan administrator of the Company or such other person or entity designated by the Administrator, or his, her or its office, as applicable:
(a) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed or otherwise acknowledged electronically by the Holder or other person then entitled to exercise the Option or such portion thereof;
(b) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with Applicable Law.
(c) In the event that the Option shall be exercised pursuant to Section 10.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and
(d) Full payment of the exercise price and applicable withholding taxes for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by the Administrator in accordance with Sections 10.1 and 10.2.
6.3 Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two years from the date of grant (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the date of transfer of such Shares to such Holder. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Holder in such disposition or other transfer.
ARTICLE 7.
AWARD OF RESTRICTED STOCK
7.1 Award of Restricted Stock. The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan or any applicable Program, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate. The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by Applicable Law.
7.2 Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the Plan, any applicable Program and/or the applicable Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares to the extent such dividends and other distributions have a record date that is on or after the date on which the Holder to whom such Restricted Stock are granted becomes the record holder of such Restricted Stock; provided, however, that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the Shares may be subject to the restrictions set forth in Section 7.3. In addition, dividends which are paid prior to vesting shall only be paid out to the Holder to the extent that the vesting conditions are subsequently satisfied and the share of Restricted Stock vests.
13
7.3 Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall be subject to such restrictions and vesting requirements as the Administrator shall provide in the applicable Program or Award Agreement. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the applicable Program or Award Agreement.
7.4 Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration on the date of such Termination of Service. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Program or Award Agreement. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide that upon certain events, including, without limitation, a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall not lapse, such Restricted Stock shall vest and cease to be forfeitable and, if applicable, the Company shall cease to have a right of repurchase.
7.5 Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof with the Internal Revenue Service.
ARTICLE 8.
AWARD OF RESTRICTED STOCK UNITS
8.1 Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator.
8.2 Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or any Subsidiary, one or more Performance Criteria, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the Administrator.
14
8.3 Settlement and Payment. At the time of grant, the Administrator shall specify the settlement date applicable to each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise determined by the Administrator, and subject to compliance with Section 409A, in no event shall the settlement date relating to each Restricted Stock Unit occur following the later of (a) the 15th day of the third month following the end of calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b) the 15th day of the third month following the end of the Company’s fiscal year in which the applicable portion of the Restricted Stock Unit vests. On the settlement date, the Company shall, in accordance with the applicable Award Agreement and subject to Section 10.4(f), transfer to the Holder one unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares on the settlement date or a combination of cash and Common Stock as determined by the Administrator.
8.4 Settlement upon Termination of Service. An Award of Restricted Stock Units shall only vest and be settled while the Holder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that the Administrator, in its sole discretion, may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may vest and be settled subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.
ARTICLE 9.
AWARD
OF OTHER STOCK BASED AWARDS, DIVIDEND EQUIVALENTS,
AND DEFERRED SHARE UNITS
9.1 Other Stock Based Awards. The Administrator is authorized to grant Other Stock Based Awards, including awards entitling a Holder to receive Shares or cash to be delivered immediately or in the future, to any Eligible Individual. Subject to the provisions of the Plan and any applicable Program, the Administrator shall determine the terms and conditions of each Other Stock Based Award, including the term of the Award, any exercise or purchase price, performance goals, including the Performance Criteria, transfer restrictions, vesting conditions and other terms and conditions applicable thereto, which shall be set forth in the applicable Award Agreement. Other Stock Based Awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator, and may be available as a form of payment in the settlement of other Awards granted under the Plan, as stand-alone payments, as a part of a bonus, deferred bonus, deferred compensation or other arrangement, and/or as payment in lieu of compensation to which an Eligible Individual is otherwise entitled.
9.2 Dividend Equivalents. Dividend Equivalents may be granted by the Administrator, either alone or in tandem with another Award, based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date the Dividend Equivalents are granted to a Holder and the date such Dividend Equivalents terminate or expire, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the Administrator. Dividend Equivalents with respect to an Award shall only be paid out to the Holder to the extent that the vesting conditions are subsequently satisfied and the Award vests. Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options, Stock Appreciation Rights or other purchase rights.
9.3 Deferred Share Units. Deferred Share Units may be granted by the Administrator to Directors, entitling the Director to receive Shares or cash in the future. Subject to the provisions of the Plan and any applicable Program, the Administrator shall determine the terms and conditions of each Deferred Share Unit, including the right receive the appreciation in value of Shares over a period of time measured from the date of grant, transfer restrictions, vesting conditions and other terms and conditions applicable thereto, which shall be set forth in the applicable Award Agreement. Deferred Share Units may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator, and may be available as a form of payment in lieu of retainer fees and other amounts to which a Director is otherwise entitled.
15
ARTICLE 10.
ADDITIONAL TERMS OF AWARDS
10.1 Payment. The Administrator shall determine the method or methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such minimum period of time as may be established by the Administrator, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (d) other form of legal consideration acceptable to the Administrator in its sole discretion, or (e) any combination of the above permitted forms of payment. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
10.2 Tax Withholding. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA, employment tax or other social security contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan or any Award. The Administrator may, in its sole discretion and in satisfaction of the foregoing requirement, allow a Holder to satisfy such obligations by any payment means described in Section 12.1 hereof, including without limitation, by allowing such Holder to have the Company or any Subsidiary withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding or repurchase no greater than the aggregate amount of such liabilities based on the maximum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income (or such other number as would not result in adverse financial accounting consequences for the Company or any of its Subsidiaries). The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.
16
10.3 Transferability of Awards.
(a) Except as otherwise provided in Sections 10.3(b) and 10.3(c):
(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than (A) by will or the laws of descent and distribution or (B) subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;
(ii) No Award or interest or right therein shall be liable for or otherwise subject to the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to satisfaction of these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by Section 10.3(a)(i); and
(iii) During the lifetime of the Holder, only the Holder may exercise any exercisable portion of an Award granted to such Holder under the Plan, unless it has been disposed of pursuant to a DRO. After the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution.
(b) Notwithstanding Section 10.3(a), the Administrator, in its sole discretion, may determine to permit a Holder or a Permitted Transferee of such Holder to transfer an Award other than an Incentive Stock Option (unless such Incentive Stock Option is intended to become a Nonqualified Stock Option) to any one or more Permitted Transferees of such Holder by gift, or for estate planning purposes or, in non-U.S. jurisdictions, into designated retirement savings accounts, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than (A) to another Permitted Transferee of the applicable Holder or (B) by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award to any Person other than another Permitted Transferee of the applicable Holder); and (iii) the Holder (or transferring Permitted Transferee) and the receiving Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer. In addition, and further notwithstanding Section 10.3(a), hereof, the Administrator, in its sole discretion, may determine to permit a Holder to transfer Incentive Stock Options to a trust that constitutes a Permitted Transferee if, under Section 671 of the Code and other Applicable Law, the Holder is considered the sole beneficial owner of the Incentive Stock Option while it is held in the trust.
(c) Notwithstanding Section 10.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder and any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is delivered in writing to the Administrator prior to the Holder’s death.
17
10.4 Conditions to Issuance of Shares.
(a) The Administrator shall determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Law and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Administrator may require that a Holder make such reasonable covenants, agreements and representations as the Administrator, in its sole discretion, deems advisable in order to comply with Applicable Law.
(b) All share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any share certificate or book entry to reference restrictions applicable to the Shares (including, without limitation, restrictions applicable to Restricted Stock).
(c) The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.
(d) No fractional Shares shall be issued and the Administrator, in its sole discretion, shall determine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.
(e) The Company, in its sole discretion, may (i) retain physical possession of any stock certificate evidencing Shares until any restrictions thereon or performance criteria applicable thereto shall have lapsed or been achieved and/or (ii) require that the stock certificates evidencing such Shares be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Shares.
(f) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).
10.5 Forfeiture and Claw-Back Provisions. All Awards (including any proceeds, gains or other economic benefit actually or constructively received by a Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award and any payments of a portion of an incentive-based bonus pool allocated to a Holder) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, whether or not such claw-back policy was in place at the time of grant of an Award, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.
18
10.6 No Repricing. The Administrator shall not, without the approval of the stockholders of the Company, have the authority to (a) amend any outstanding Option or Stock Appreciation Right or other purchase right to reduce its exercise price per Share, or (b) cancel any Option or Stock Appreciation Right or other purchase right in exchange for cash or another Award or (c) permit any repricing of such awards to be accomplished through repurchase or otherwise, in each case other than adjustments or substitutions in accordance with Section 12.2.
10.7 Amendment of Awards. Subject to Applicable Law, the Administrator may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or settlement, and converting an Incentive Stock Option to a Non-Qualified Stock Option. The Holder’s consent to such action shall be required unless (a) the Administrator determines that the action, taking into account any related action, would not materially and adversely affect the Holder, or (b) the change is otherwise permitted under the Plan (including, without limitation, under Section 12.2 or 12.10).
10.8 Data Privacy. As a condition of receipt of any Award, each Holder explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 10.8 by and among, as applicable, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Holder’s participation in the Plan. The Company and its Subsidiaries may hold certain personal information about a Holder, including but not limited to, the Holder’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its Subsidiaries, details of all Awards, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the “Data”). The Company and its Subsidiaries may transfer the Data amongst themselves as necessary for the purpose of implementation, administration and management of a Holder’s participation in the Plan, and the Company and its Subsidiaries may each further transfer the Data to any third parties assisting the Company and its Subsidiaries in the implementation, administration and management of the Plan. These recipients may be located in the Holder’s country, or elsewhere, and the Holder’s country may have different data privacy laws and protections than the recipients’ country. Through acceptance of an Award, each Holder authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Holder’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Subsidiaries or the Holder may elect to deposit any Shares. The Data related to a Holder will be held only as long as is necessary to implement, administer, and manage the Holder’s participation in the Plan. A Holder may, at any time, view the Data held by the Company with respect to such Holder, request additional information about the storage and processing of the Data with respect to such Holder, recommend any necessary corrections to the Data with respect to the Holder or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel Holder’s ability to participate in the Plan and, in the Administrator’s discretion, the Holder may forfeit any outstanding Awards if the Holder refuses or withdraws his or her consents as described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Holders may contact their local human resources representative.
19
ARTICLE 11.
ADMINISTRATION
11.1 Administrator. The Committee shall administer the Plan (except as otherwise permitted herein). To the extent necessary to comply with Rule 16b-3 of the Exchange Act, then the Committee shall take all action with respect to such Awards, and the individuals taking such action shall consist solely of two or more Non-Employee Directors, each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule. Additionally, to the extent required by Applicable Law, each of the individuals constituting the Committee shall be an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 11.1 or the Organizational Documents. Except as may otherwise be provided in the Organizational Documents or as otherwise required by Applicable Law, (a) appointment of Committee members shall be effective upon acceptance of appointment, (b) Committee members may resign at any time by delivering written or electronic notice to the Board and (c) vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, (i) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” as used in the Plan shall be deemed to refer to the Board and (ii) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 11.6.
11.2 Duties and Powers of Administrator. It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions. The Administrator shall have the power to interpret the Plan, all Programs and Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan and any Program as are not inconsistent with the Plan, to interpret, amend or revoke any such rules and to amend the Plan or any Program or Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any such Program or Award Agreement are not materially and adversely affected by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 10.7 or Section 12.10. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee in its capacity as the Administrator under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.
11.3 Action by the Administrator. Unless otherwise established by the Board, set forth in any Organizational Documents or as required by Applicable Law, a majority of the Administrator shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Administrator in lieu of a meeting, shall be deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
20
11.4 Authority of Administrator. Subject to the Organizational Documents, any specific designation in the Plan and Applicable Law, the Administrator has the exclusive power, authority and sole discretion to:
(a) Designate Eligible Individuals to receive Awards;
(b) Determine the type or types of Awards to be granted to each Eligible Individual (including, without limitation, any Awards granted in tandem with another Award granted pursuant to the Plan, provided, however, that Incentive Stock Options may not be granted in tandem with Nonqualified Stock Options);
(c) Determine the number of Awards to be granted and the number of Shares to which an Award will relate;
(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any Performance Criteria or other performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and claw-back and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;
(e) Determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be identical for each Holder;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Establish, adopt, or revise any Programs, rules and regulations as it may deem necessary or advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement;
(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and
(k) Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Section 12.2.
11.5 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program or any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding and conclusive on all Persons.
11.6 Delegation of Authority. The Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Article 11; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, or (b) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under any Organizational Documents and Applicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation or that are otherwise included in the applicable Organizational Documents, and the Board or Committee, as applicable, may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 11.6 shall serve in such capacity at the pleasure of the Board or the Committee, as applicable, and the Board or the Committee may abolish any committee at any time and re-vest in itself any previously delegated authority.
21
ARTICLE 12.
MISCELLANEOUS PROVISIONS
12.1 Amendment, Suspension or Termination of the Plan.
(a) Except as otherwise provided in Section 12.1(b), the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board; provided that, except as provided in Section 10.7 and Section 12.10, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, materially and adversely affect any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides.
(b) Notwithstanding Section 12.1(a), the Board may not without approval of the Company’s stockholders:
(i) Increase the Share Limit, except as provided in Section 12.2, or without approval of the Company’s stockholders given within twelve (12) months before or after such action;
(ii) Reduce the exercise or purchase price of an Award benefiting an Insider;
(iii) Extend the term of an incentive security benefiting an Insider;
(iv) Amend the Plan to remove or exceed the Insider participation limit; or
(v) Amend the Plan amendment provisions.
(c) No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and notwithstanding anything herein to the contrary, in no event may any Incentive Stock Option be granted under the Plan after the tenth (10th) anniversary of the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company’s stockholders.
12.2 Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events.
(a) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator may make equitable adjustments, if any, to reflect such change with respect to: (i) the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit and kind of Shares which may be issued under the Plan, and adjustments of the Director Limit); (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); (iv) the grant or exercise price per share for any outstanding Awards under the Plan; and (v) the number and kind of Shares (or other securities or property) for which automatic grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6.
22
(b) In the event of any transaction or event described in Section 12.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Subsidiary of the Company, or the financial statements of the Company or any Subsidiary, or of changes in Applicable Law or Applicable Accounting Standards, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in Applicable Law or Applicable Accounting Standards:
(i) To provide for the termination of any such Award in exchange for an amount of cash and/or other property with a value equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 12.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment);
(ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and applicable exercise or purchase price, in all cases, as determined by the Administrator;
(iii) To make adjustments in the number and type of Shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future;
(iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement;
(v) To replace such Award with other rights or property selected by the Administrator; and/or
(vi) To provide that the Award cannot vest, be exercised or become payable after such event.
(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 12.2(a) and 12.2(b):
(i) (i) The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted (and the adjustments provided under this Section 12.2(c)(i) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company); and/or
23
(ii) The Administrator shall make such equitable adjustments, if any, as the Administrator, in its sole discretion, may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit and kind of Shares which may be issued under the Plan).
(d) Notwithstanding any other provision of the Plan, in the event of a Change in Control, unless the Administrator elects to (i) terminate an Award in exchange for cash, rights or property, or (ii) cause an Award to become fully exercisable and no longer subject to any forfeiture restrictions prior to the consummation of a Change in Control, pursuant to Section 12.2, (A) such Award (other than any portion subject to performance-based vesting) shall continue in effect or be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation and (B) the portion of such Award subject to performance-based vesting shall be subject to the terms and conditions of the applicable Award Agreement and, in the absence of applicable terms and conditions, the Administrator’s discretion, provided, that in the event a Holder experiences a Termination of Service by the Company for other than Cause or by the Holder for Good Reason, in either case within two years following such Change in Control, then the vesting and, if applicable, exercisability of one hundred percent (100%) of the then-unvested Shares (or other securities or property) subject to the outstanding Awards held by such Holder shall accelerate upon the date of such Termination of Service.
(e) Subject to Section 12.2(d), in the event that the successor corporation in a Change in Control refuses to assume or substitute for an Award (other than any portion subject to performance-based vesting), the Administrator shall cause such Award to become fully vested and, if applicable, exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on such Award to lapse and, to the extent unexercised upon the consummation of such transaction, to terminate in exchange for cash, rights or other property pursuant to Section 12.2(b)(i). The Administrator shall notify the Holder of any Award that becomes exercisable pursuant to the preceding sentence that such Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the consummation of the Change in Control in accordance with the preceding sentence.
(f) For the purposes of this Section 12.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per-share consideration received by holders of Common Stock in the Change in Control.
(g) The Administrator, in its sole discretion, may include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.
24
(h) Unless otherwise determined by the Administrator, no adjustment or action described in this Section 12.2 or in any other provision of the Plan shall be authorized to the extent it would (i) cause the Plan to violate Section 422(b)(1) of the Code, (ii) result in short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act, or (iii) cause an Award to fail to be exempt from or comply with Section 409A.
(i) The existence of the Plan, any Program, any Award Agreement and/or the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
(j) In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company, in its sole discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.
12.3 Approval of Plan by Stockholders. The Plan shall be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan.
12.4 No Stockholders Rights. Except as otherwise provided herein or in an applicable Program or Award Agreement, a Holder shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.
12.5 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.
12.6 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary: (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Subsidiary, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.
25
12.7 Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements), and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all Applicable Law. The Administrator, in its sole discretion, may take whatever actions it deems necessary or appropriate to effect compliance with Applicable Law, including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars. Notwithstanding anything to the contrary herein, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law.
12.8 Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.
12.9 Governing Law. The Plan and any Programs and Award Agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.
12.10 Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A, the Plan, the Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A. In that regard, to the extent any Award under the Plan or any other compensatory plan or arrangement of the Company or any of its Subsidiaries is subject to Section 409A, and such Award or other amount is payable on account of a Holder’s Termination of Service (or any similarly defined term), then (a) such Award or amount shall only be paid to the extent such Termination of Service qualifies as a “separation from service” as defined in Section 409A, and (b) if such Award or amount is payable to a “specified employee” as defined in Section 409A then to the extent required in order to avoid a prohibited distribution under Section 409A, such Award or other compensatory payment shall not be payable prior to the earlier of (i) the expiration of the six-month period measured from the date of the Holder’s Termination of Service, or (ii) the date of the Holder’s death. To the extent applicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A, the Administrator may (but is not obligated to), without a Holder’s consent, adopt such amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (A) exempt the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (B) comply with the requirements of Section 409A and thereby avoid the application of any penalty taxes under Section 409A. The Company makes no representations or warranties as to the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation under this Section 12.10 or otherwise to take any action (whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Holder or any other person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A.
12.11 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Subsidiary.
26
12.12 Indemnification. To the extent permitted under Applicable Law and the Organizational Documents, each member of the Administrator shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Organizational Documents, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
12.13 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
12.14 Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.
12.15 Compliance with TSX Policies. So long as the Company is not an Eligible Interlisted Issuer (as such term is defined in the policies of the TSX), the Company will comply with the policies of the TSX regarding security based compensation arrangements, including seeking TSX and stockholder approval of the Plan and any grants hereunder as required by the policies of the TSX.
* * * * *
Hereby certified that the foregoing Plan was duly adopted by the Board of Directors of Ivanhoe Electric, Inc. on June , 2022.
* * * * *
Hereby certified that the foregoing Plan was approved by the stockholders of Ivanhoe Electric, Inc. on June , 2022.
27
Exhibit 10.19
IVANHOE ELECTRIC INC.`
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is made as of _____________, 2022 by and between Ivanhoe Electric Inc., a Delaware corporation (the “Company”), and ____________________ (“Indemnitee”).
RECITALS
WHEREAS, the Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, to serve the Company;
WHEREAS, in order to induce Indemnitee to [provide or continue to provide] services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;
WHEREAS, the Certificate of Incorporation, as amended (the “Existing Charter”) and the Amended and Restated Bylaws (the “Bylaws”) of the Company currently require, and the Amended and Restated Certificate of Incorporation (the “Public Company Charter” and together with the Existing Charter, the “Charter”) and the Second Amended and Restated Bylaws (the “Second Amended and Restated Bylaws”, and together with the Amended and Restated Bylaws, the “Bylaws”) each to be in effect immediately prior to the closing of the Company’s initial public offering, indemnification of the officers and directors of the Company, and Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, the Charter, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the Board of Directors of the Company (the “Board”), officers and other persons with respect to indemnification;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is detrimental to the best interests of the Company’s stockholders;
WHEREAS, it is reasonable and prudent for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law, regardless of any amendment or revocation of the Charter or the Bylaws, so that they will [serve or continue to serve] the Company free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided in the Charter, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; [and]
[WHEREAS, Indemnitee has certain rights to indemnification and/or insurance provided by [Name of Fund/Sponsor] which Indemnitee and [Name of Fund/Sponsor] intend to be secondary to the primary obligation of the Company to indemnify Indemnitee as provided in this Agreement, with the Company’s acknowledgment and agreement to the foregoing being a material condition to Indemnitee’s willingness to [serve or continue to serve] on the Board.]
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company. Indemnitee agrees to serve as a director of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.
Section 2. Definitions.
As used in this Agreement:
(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, as in effect on the date of this Agreement; provided, however, that no Person who is a director or officer of the Company shall be deemed an Affiliate or an Associate of any other director or officer of the Company solely as a result of his or her position as director or officer of the Company.
(b) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “Beneficially Own” and have “Beneficial Ownership” of, any securities:
(i) which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, Beneficially Owns (as determined pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in effect on the date of this Agreement);
(ii) which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has: (A) the legal, equitable or contractual right or obligation to acquire (whether directly or indirectly and whether exercisable immediately or only after the passage of time, compliance with regulatory requirements, satisfaction of one or more conditions (whether or not within the control of such Person) or otherwise) upon the exercise of any conversion rights, exchange rights, rights, warrants or options, or otherwise; (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); or (C) the right to dispose of pursuant to any agreement, arrangement or understanding (whether or not in writing) (other than customary arrangements with and between underwriters and selling group members with respect to a bona fide public offering of securities);
2
(iii) which are Beneficially Owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting or disposing of any securities of the Company; or
(iv) that are the subject of a derivative transaction entered into by such Person or any of such Person’s Affiliates or Associates, including, for these purposes, any derivative security acquired by such Person or any of such Person’s Affiliates or Associates that gives such Person or any of such Person’s Affiliates or Associates the economic equivalent of ownership of an amount of securities due to the fact that the value of the derivative security is explicitly determined by reference to the price or value of such securities, or that provides such Person or any of such Person’s Affiliates or Associates an opportunity, directly or indirectly, to profit or to share in any profit derived from any change in the value of such securities, in any case without regard to whether (A) such derivative security conveys any voting rights in such securities to such Person or any of such Person’s Affiliates or Associates; (B) the derivative security is required to be, or capable of being, settled through delivery of such securities; or (C) such Person or any of such Person’s Affiliates or Associates may have entered into other transactions that hedge the economic effect of such derivative security.
Notwithstanding the foregoing, no Person engaged in business as an underwriter of securities shall be deemed the Beneficial Owner of any securities acquired through such Person’s participation as an underwriter in good faith in a firm commitment underwriting.
(c) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person is or becomes the Beneficial Owner (as defined above), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, provided that a Change of Control shall be deemed to have occurred if subsequent to such reduction such Person becomes the Beneficial Owner, directly or indirectly, of any additional securities of the Company conferring upon such Person any additional voting power;
(ii) Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(c)(i), 2(c)(iii) or 2(c)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;
3
(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or successor entity) more than 50% of the combined voting power of the voting securities of the surviving or successor entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving or successor entity;
(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale, lease, exchange or other transfer by the Company, in one or a series of related transactions, of all or substantially all of the Company’s assets; and
(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended, whether or not the Company is then subject to such reporting requirement.
(d) “Corporate Status” describes the status of a person as a current or former director of the Company or current or former director, manager, partner, officer, employee, agent or trustee of any other Enterprise which such person is or was serving at the request of the Company.
(e) “Enforcement Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from such action. Expenses, however, shall not include fees, salaries, wages or benefits owed to Indemnitee.
(f) “Enterprise” shall mean any corporation (other than the Company), partnership, joint venture, trust, employee benefit plan, limited liability company, or other legal entity of which Indemnitee is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee.
(g) “Expenses” shall include all reasonable attorneys’ fees, court costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding or an appeal resulting from a Proceeding. Expenses, however, shall not include amounts paid in settlement by Indemnitee, the amount of judgments or fines against Indemnitee or fees, salaries, wages or benefits owed to Indemnitee.
4
(h) “Independent Counsel” means a law firm, or a partner (or, if applicable, member or shareholder) of such a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company, any subsidiary of the Company, any Enterprise or Indemnitee in any matter material to any such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(i) “Person” shall mean (i) an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, a business trust, a government or political subdivision, any unincorporated organization, or any other association or entity including any successor (by merger or otherwise) thereof or thereto, and (ii) a “group” as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(j) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, regulatory or investigative nature, and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director of the Company or is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise or by reason of any action taken by Indemnitee or of any action taken on his or her part while acting as a director of the Company or while serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided, however, that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof, initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in Section 12(a) of this Agreement.
Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee to the extent set forth in this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines, penalties, excise taxes, and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
5
Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee to the extent set forth in this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery (the “Delaware Court”) shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court shall deem proper.
Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement and except as provided in Section 7, to the extent that Indemnitee is a party to or a participant in any Proceeding and is successful in such Proceeding or in defense of any claim, issue or matter therein, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on his or her behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 6. Reimbursement for Expenses of a Witness or in Response to a Subpoena. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee, by reason of his or her Corporate Status, (i) is a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be made a party or (ii) receives a subpoena with respect to any Proceeding to which Indemnitee is not a party and is not threatened to be made a party, the Company shall reimburse Indemnitee for all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.
Section 7. Exclusions. Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement:
(a) to indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise[; provided that the foregoing shall not affect the rights of Indemnitee or the Fund Indemnitors as set forth in Section 13(c)];
6
(b) for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory or common law, (ii) any reimbursement of the Company by Indemnitee of any bonus, other incentive- or equity-based compensation or of profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act of 2002) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee thereof (including, but not limited to, any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act);
(c) to indemnify with respect to any Proceeding, or part thereof, brought by Indemnitee against the Company, any legal entity which it controls, any director or officer thereof or any third party, unless (i) the Board has consented to the initiation of such Proceeding or part thereof and (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; provided, however, that this Section 7(c) shall not apply to (A) counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee or (B) any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought as described in Section 12; or
(d) to provide any indemnification or advancement of expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).
Section 8. Advancement of Expenses. Subject to Section 9(b), the Company shall advance, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within forty-five (45) days after the receipt by the Company of a statement or statements requesting such advances (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s (i) ability to repay the expenses, (ii) ultimate entitlement to indemnification under the other provisions of this Agreement, and (iii) entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)). Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. No other form of undertaking shall be required. The right to advances under this paragraph shall in all events continue until final disposition of any Proceeding, including any appeal therein. Nothing in this Section 8 shall limit Indemnitee’s right to advancement pursuant to Section 12(e) of this Agreement.
7
Section 9. Procedure for Notification and Defense of Claim.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor specifying the basis for the claim, the amounts for which Indemnitee is seeking payment under this Agreement, and all documentation related thereto as reasonably requested by the Company.
(b) In the event that the Company shall be obligated hereunder to provide indemnification for or make any advancement of Expenses with respect to any Proceeding, the Company shall be entitled to assume the defense of such Proceeding, or any claim, issue or matter therein, with counsel approved by Indemnitee (which approval shall not be unreasonably withheld or delayed) upon the delivery to Indemnitee of written notice of the Company’s election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Proceeding; provided that (i) Indemnitee shall have the right to employ separate counsel in any such Proceeding at Indemnitee’s expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of such defense, (C) the Company shall not continue to retain such counsel to defend such Proceeding, or (D) a Change in Control shall have occurred, then the fees and expenses actually and reasonably incurred by Indemnitee with respect to his or her separate counsel shall be Expenses hereunder.
(c) In the event that the Company does not assume the defense in a Proceeding pursuant to Section 9(b), then the Company will be entitled to participate in the Proceeding at its own expense.
(d) The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed). Without limiting the generality of the foregoing, the fact that an insurer under an applicable insurance policy delays or is unwilling to consent to such settlement or is or may be in breach of its obligations under such policy, or the fact that directors’ and officers’ liability insurance is otherwise unavailable or not maintained by the Company, may not be taken into account by the Company in determining whether to provide its consent. The Company shall not, without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld or delayed), enter into any settlement which (i) includes an admission of fault of Indemnitee, any non-monetary remedy imposed on Indemnitee or any monetary damages for which Indemnitee is not wholly and actually indemnified hereunder or (ii) with respect to any Proceeding with respect to which Indemnitee may be or is made a party or may be otherwise entitled to seek indemnification hereunder, does not include the full release of Indemnitee from all liability in respect of such Proceeding.
8
Section 10. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 9(a), a determination, if such determination is required by applicable law, with respect to Indemnitee’s entitlement to indemnification hereunder shall be made in the specific case by one of the following methods: (x) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board; or (y) if a Change in Control shall not have occurred: (i) by a majority vote of the disinterested directors, even though less than a quorum; (ii) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum; or (iii) if there are no disinterested directors or if the disinterested directors so direct, by Independent Counsel in a written opinion to the Board. For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought. In the case that such determination is made by Independent Counsel, a copy of Independent Counsel’s written opinion shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within forty-five (45) days after such determination. Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel or the Company, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. The Company shall likewise cooperate with Indemnitee and Independent Counsel, if applicable, in making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel and Indemnitee, upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Company and reasonably necessary to such determination. Any out-of-pocket costs or expenses (including reasonable attorneys’ fees and disbursements) actually and reasonably incurred by Indemnitee in so cooperating with the Independent Counsel or the Company shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(b) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a), the Independent Counsel shall be selected by the Board if a Change in Control shall not have occurred or, if a Change in Control shall have occurred, by Indemnitee. Indemnitee or the Company, as the case may be, may, within ten (10) days after written notice of such selection, deliver to the Company or Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit. If, within twenty (20) days after the later of (i) submission by Indemnitee of a written request for indemnification pursuant to Section 9(a), and (ii) the final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall have been selected without objection, either Indemnitee or the Company may petition the Delaware Court for resolution of any objection which shall have been made by Indemnitee or the Company to the selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate. The person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 10(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
9
(c) Notwithstanding anything to the contrary contained in this Agreement, the determination of entitlement to indemnification under this Agreement shall be made without regard to the Indemnitee’s entitlement to and availability of insurance coverage, including advancement, payment or reimbursement of defense costs, expenses or covered loss under the provisions of any applicable insurance policy (including, without limitation, whether such advancement, payment or reimbursement is withheld, conditioned or delayed by the insurer(s)).
Section 11. Presumptions and Effect of Certain Proceedings.
(a) To the extent permitted by applicable law, in making a determination with respect to entitlement to indemnification hereunder, it shall be presumed that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof and the burden of persuasion by clear and convincing evidence to overcome that presumption in connection with the making of any determination contrary to that presumption.
(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(c) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s actions based on the records or books of account of the Company or any other Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, officers, agents or employees of the Company or any other Enterprise in the course of their duties, or on the advice of legal counsel for the Company or any other Enterprise or on information or records given or reports made to the Company or any other Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or any other Enterprise. The provisions of this Section 11(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or failure to act, of any director, manager, partner, officer, employee, agent or trustee of the Company, any subsidiary of the Company, or any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 11(c) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
10
Section 12. Remedies of Indemnitee.
(a) Subject to Section 12(f), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification for which a determination is to be made other than by Independent Counsel, (iv) payment of indemnification or reimbursement of expenses is not made pursuant to Section 5 or 6 or the last sentence of Section 10(a) of this Agreement within forty-five (45) days after receipt by the Company of a written request therefor (including any invoices received by Indemnitee, which such invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within forty-five (45) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Delaware Court of his or her entitlement to such indemnification or advancement. Alternatively, Indemnitee, at his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing time limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.
(c) If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
11
(d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(e) The Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Enforcement Expenses and, if requested by Indemnitee, shall (within forty-five (45) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company in the suit for which indemnification or advancement is being sought. Such written request for advancement shall include invoices received by Indemnitee in connection with such Enforcement Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law need not be included with the invoice.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding, including any appeal therein.
Section 13. Non-exclusivity; Survival of Rights; Insurance; [Primacy of Indemnification;] Subrogation.
(a) The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, managers, partners, officers, employees, agents or trustees of the Company or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, manager, partner, officer, employee, agent or trustee under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. The Company shall also promptly provide to Indemnitee: (i) copies of all of the Company’s potentially applicable directors’ and officers’ liability insurance policies, (ii) copies of such notices delivered to the applicable insurers, and (iii) copies of all subsequent communications and correspondence between the Company and such insurers regarding the Proceeding, in each case substantially concurrently with the delivery or receipt thereof by the Company.
12
(c) [The Company hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance provided by [Name of Fund/Sponsor] and certain of [its][their] affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Charter and/or Bylaws (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 13(c).]
(d) [Except as provided in paragraph (c) above,] [I/i]n the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee [(other than against the Fund Indemnitors)], who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) [Except as provided in paragraph (c) above,] [T/t]he Company’s obligation to provide indemnification or advancement hereunder to Indemnitee who is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement from such other Enterprise.
13
Section 14. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director of the Company or (b) one (1) year after the final termination of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Section 15. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 16. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to [serve or continue to serve] as a director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Charter, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 17. Modification and Waiver. No supplement, modification or amendment, or waiver of any provision, of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. No supplement, modification or amendment of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such supplement, modification or amendment.
14
Section 18. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification, reimbursement or advancement as provided hereunder. The failure of Indemnitee to so notify the Company or any delay in notification shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise, unless, and then only to the extent that, the Company did not otherwise learn of the Proceeding and such delay is materially prejudicial to the Company’s ability to defend such Proceeding or matter; and, provided, further, that notice will be deemed to have been given without any action on the part of Indemnitee in the event the Company is a party to the same Proceeding.
Section 19. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (iii) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (iv) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.
(b) If to the Company to:
Ivanhoe Electric Inc.
606 – 999 Canada Place
Vancouver, BC V6C 3E1
Canada
Attention: Secretary
or to any other address as may have been furnished to Indemnitee by the Company.
Section 20. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the relative benefits received by the Company and Indemnitee in connection with the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transactions.
15
Section 21. Internal Revenue Code Section 409A. The Company intends for this Agreement to comply with the Indemnification exception under Section 1.409A-1(b)(10) of the regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Code”), which provides that indemnification of, or the purchase of an insurance policy providing for payments of, all or part of the expenses incurred or damages paid or payable by Indemnitee with respect to a bona fide claim against Indemnitee or the Company do not provide for a deferral of compensation, subject to Section 409A of the Code, where such claim is based on actions or failures to act by Indemnitee in his or her capacity as a service provider of the Company. The parties intend that this Agreement be interpreted and construed with such intent.
Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) consent to service of process at the address set forth in Section 19 of this Agreement with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 23. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 24. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 25. Monetary Damages Insufficient/Specific Enforcement. The Company and Indemnitee agree that a monetary remedy for breach of this Agreement may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm (having agreed that actual and irreparable harm will result in not forcing the Company to specifically perform its obligations pursuant to this Agreement) and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he may be entitled. The Company and Indemnitee further agree that Indemnitee shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by the Court, and the Company hereby waives any such requirement of a bond or undertaking.
Remainder of Page Intentionally Left Blank.
16
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
| Ivanhoe Electric Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| [Name of Indemnitee] | ||
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement No. 333-265175 on Form S-1 of our report dated April 21, 2022, (June 16, 2022, as to the effect of the reverse stock split described in Note 1) relating to the financial statements of Ivanhoe Electric Inc. We also consent to the reference to us under the heading "Experts" in such Registration Statement.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
June 21, 2022