TRX GOLD Corp 6-K, filed Dec 21, 2020
TRX GOLD Corp (TRX)
About this 6-K
TRX GOLD Corp filed this 6-K on December 21, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2020
Commission File No. 001-32500
TANZANIAN GOLD CORPORATION
(Translation of registrant’s name into English)
Suite 202, 5626 Larch Street
Vancouver BC Canada V6M 4E1
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under the cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Offering
On December 21, 2020, Tanzanian Gold Corporation (the “Company”), entered into Subscription Agreements (the “Subscription Agreements”) with investors pursuant to which the Company agreed to sell a total of 5,545,325 common shares (“Common Shares”) and warrants to purchase up to 2,772,637 Common Shares for total gross proceeds of $2,993,390. Each Common Share sold in the offering will be accompanied by a one-half warrant, with each whole warrant (“Warrant”) exercisable to purchase one Common Share at an exercise price of $1.50 per share. Each Common share and accompanying one-half Warrant are being sold at a fixed combined purchase price of $0.5398. The Warrants will be exercisable immediately, and the Warrants will expire on the third anniversary of the date of issuance. The offer and sale of the Common Shares and Warrants pursuant to the Subscription Agreements are referred to herein as the “Offering.”
The Offering is expected to close on or about December 23, 2020, subject to the satisfaction of customary closing conditions. The net proceeds to the Company after deducting estimated offering expenses of $30,000 are expected to be approximately $2,963,390. The Offering is being made pursuant to the Company’s existing shelf registration statement on Form F-3 (File No. 333-250146), which was filed with the Securities and Exchange Commission on November 17, 2020, and declared effective by the on November 25, 2020. On December 21, 2020, the Company filed a prospectus supplement ("Supplement") in connection with the Offering.
The representations, warranties and covenants contained in the Subscription Agreements were made solely for the benefit of the parties to the Subscription Agreements. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the Subscription Agreements and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by shareholders of, or other investors in, the Company. Accordingly, the form of Subscription Agreement is filed with this report only to provide shareholders with information regarding the terms of transaction, and not to provide shareholders with any other factual information regarding the Company. Shareholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Subscription Agreements, which subsequent information may or may not be fully reflected in public disclosures.
The foregoing descriptions of the Subscription Agreements, and the Common Shares and Warrants do not purport to be complete and are qualified in its entirety by reference to the full text of the form of Subscription Agreement and form of Warrant which are filed as Exhibits 10.1 and 10.2 to this Report on Form 6-K and is incorporated by reference herein.
A copy of the opinion of Miller Thomson, LLP relating to the legality of the issuance and sale of the Common Shares, Warrants and Common Shares underlying Warrants in the Offering is attached as Exhibit 5.1 hereto.
Supplemental Agreement
On December 18, 2020, the Company and YA II PN, Ltd. and Riverfort Global Opportunities PLC (along with YA II PN Ltd., collectively the “Buyers”) entered into a Supplemental Agreement which eliminates, and adds, certain conditions under which the Company may require the Buyers to purchase Tranche B Debentures pursuant to that Securities Purchase Agreement dated July 22, 2020. A copy of the Supplemental Agreement is filed as Exhibit 10.3 to this Report on Form 6-K and is incorporated by reference herein.
Forward-Looking Statements
The statements in this report related to the completion, timing and size of the Offering are “forward-looking” statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to market conditions and the satisfaction of customary closing conditions related to the Offering. There can be no assurance that the Company will be able to complete the Offering on the anticipated terms, or at all.
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Incorporation by Reference
The information set forth in this report on Form 6-K, including the exhibits hereto (excluding Exhibit 99.1), are hereby incorporated by reference into the Company’s Registration Statement on Form F-3 as filed on November 17, 2020, and declared effective on November 25, 2020 (No. 333-250146).
Exhibits
The following exhibits are filed as part of this Form 6-K:
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Tanzanian Gold Corporation | |||
| (Registrant) | |||
| By: | /s/ James E. Sinclair | ||
| James E. Sinclair | |||
| Executive Chairman | |||
Date: December 21, 2020
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Exhibit 5.1
MILLER THOMSON LLP
December 21, 2020
Board of Directors
Tanzanian Gold Corporation
82 Richmond Street West, Suite 208
Toronto, ON,
Canada M5C 1P1
| Re: | Tanzanian Gold Corporation |
We have acted as Alberta counsel for the Company, an Alberta company. We are furnishing this opinion in connection with a prospectus supplement dated December 21, 2020 (the “Prospectus Supplement”), for the issuance of 5,545,325 common shares (“Common Shares”) and 2,772,637 warrants to purchase up to common shares (the “Warrants”), which includes the common shares that are issuable from time to time upon exercise of the Warrants (the “Warrant Shares”). The Common Shares and the Warrants will be sold in fixed combination, and the combined purchase price per Common Share and a one-half Warrant is $05398. Each whole Warrant is exercisable to purchase one additional Common Share at an exercise price of $1.50 per Common Share for a period of three years from the date of closing. The Common Share, Warrants and Warrant Shares will be offered pursuant to a registration statement on Form F-3, Registration No. 333-250146 (the “Registration Statement”), filed by the Company with the Securities and Exchange Commission, including a base prospectus (the “Base Prospectus”), and the Prospectus Supplement (together with the Base Prospectus being the “Prospectus”).
In connection with this opinion, we have examined the resolutions of the Board of Directors of the Company in respect of the Prospectus, Registration Statement and issuance of up to 5,557,613 units consisting of Common Shares and one-half share purchase Warrants (the “Resolutions”), and such matters of fact and questions of law as we have considered appropriate for purposes of this letter.
We are qualified to carry on the practice of law in the Province of Alberta. Our opinion below is expressed only with respect to the laws of the Province of Alberta and the federal laws of Canada applicable therein. We express no opinion with respect to the laws of any other jurisdiction.
Our opinion is expressed with respect to the laws of the Province of Alberta in effect on the date of this opinion. We have no responsibility or obligation to (i) update this opinion, (ii) take into account, or inform the addressee or any other person, of any changes in law, facts or other developments subsequent to this date that do or may affect the opinions we express, or (iii) advise the addressee or any other person of any other change in any matter addressed in this opinion. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion to any person other than the addressee.
In conducting all examinations we have assumed: (i) the genuineness of all signatures and the authority and legal capacity of all persons signing documents examined by us; (ii) the authenticity of all documents submitted to us as originals; (iii) the conformity to authentic originals of all documents submitted to us as certified, conformed, notarial, facsimile, true or photostatic copies of original documents and the veracity and completeness of the information contained therein; (iv) the identity, authority and capacity of all individuals acting or purporting to act as public officials; and (v) the accuracy and completeness of the records maintained by all public offices or agencies where we have searched or enquired or caused searches or enquiries to be conducted.
We have also assumed that:
| (a) | at or prior to the time of the delivery of the Common Shares and Warrants, the Registration Statement has become effective under the Securities Act of 1933, as amended, and such effectiveness will not have been terminated or rescinded; |
| (b) | the Common Shares and Warrants will be offered, issued and sold in compliance with applicable United States Federal and State securities laws and in the manner stated in the Registration Statement and Prospectus; |
| (c) | the Company will have received the agreed upon consideration for the issuance of the Common Shares and Warrants and such Common Shares and Warrants will have been delivered by or on behalf of the Company against payment therefor; |
| (d) | all documents submitted to us have been executed in the form reviewed by us, and have not been amended or modified, since the dates on which they were submitted to us, whether by written or oral agreement or by conduct of the parties thereto, or otherwise; |
| (e) | all acknowledgements, representations, warranties and certificates dated on or prior to the date hereof upon which we have relied continue to be accurate in all respects as of the time of delivery of this opinion; |
| (f) | no order, ruling or decision of any court, tribunal, securities commission or other regulatory or administrative body is or has been in effect at any material time that: (a) restricts any trades or distributions in securities of the Company; (b) affects any person or company (including the Company) that engages in such trade or distribution; or (c) restricts the ability of the Company to execute, deliver or perform any obligations to issue the Common Shares; |
| (g) | all cheques, bank drafts and other methods of payment relied upon to effect payment of the consideration for the Common Shares will be honoured upon presentation or will otherwise result in the receipt by the Company of the funds represented by such cheques, bank drafts or other methods of payment; |
| (h) | where our opinion refers to any of the Common Shares or Warrants as being “fully paid and non-assessable”, no opinion is expressed as to the adequacy of any consideration received; and |
| (i) | We have not undertaken any independent investigations to verify the accuracy or completeness of these assumptions. |
Subject to the foregoing and the other matters set forth herein, we are of the opinion that, as of the date hereof:
| (a) | each Common Share, when issued, sold and delivered in the manner and for the consideration stated in the Resolutions, upon payment of the consideration provided therein to the Company, will be validly issued, fully paid and non-assessable. | |
| (b) | each Warrant, when issued, sold and delivered in the manner and for the consideration stated in the Resolutions, upon payment of the consideration provided therein to the Company, will be validly issued, fully paid and non-assessable. |
This opinion letter has been prepared for your use in connection with the Registration Statement and Prospectus contained therein and is expressed as of the date hereof. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company.
We hereby consent to the filing of this opinion letter as an exhibit to the Form 6-K which is incorporated by reference to the Registration Statement, and to the reference to this firm on the cover page and under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder.
/s/ Miller Thomson LLP
Exhibit 10.1
| Investor Name: _________________________ | ||
| Total Purchase Price: | USD$____________ | |
| Combined Per Share-Warrant Price: | USD$0.5398 | |
| Number of Purchased Shares: | Total Purchase Price/Combined Per Share-Warrant Price1 | |
| Number of Warrants: | Number of Purchased Shares/22 |
SUBSCRIPTION AGREEMENT
Tanzanian Gold Corporation
#202, 5626 Larch Street,
Vancouver, British Columbia
Canada V6M 4E1
Ladies and Gentlemen:
The undersigned (the “Investor”) hereby confirms its agreement with Tanzanian Gold Corporation, a corporation formed under the Business Corporations Act (Alberta) and formerly known as Tanzanian Royalty Exploration Corporation, (the “Company”), as follows:
1. This Subscription Agreement, including the Terms and Conditions for the Purchase of Common Shares and Warrants, attached hereto as Annex I which is incorporated herein by this reference as if fully set forth herein (the “Terms and Conditions” and, together with this Subscription Agreement, this “Agreement”) is made as of the date set forth below between the Company and the Investor. Pursuant to this Subscription Agreement, the Company is agreeing to sell and the Investor is agreeing to purchase, common shares of the Company, no par value (the “Common Shares”) and one-half warrant, with each whole warrant exercisable to purchase one Common Share at an exercise price of USD$1.50 per share (the “Warrant(s)”). Warrants cannot be exercised for fractional amount. Accordingly, the Investor agrees that all of its representations and warranties set forth herein, and the Terms and Conditions, are true, complete and accurate as of the date hereof and the Closing Date.
2. The Company has authorized the sale and issuance to the Investor of the number of Purchased Shares (the “Purchased Shares”) of Common Shares and Number of Warrants (“Purchased Warrants”) at the Combined Per Share-Warrant Price for an aggregate purchase price of the Total Purchase Price. The Investor will pay the Total Purchase Price by cash.
3. The offering and sale of the Common Shares and Warrants and Common Shares underlying the Warrants (the “Offering”) is being made pursuant to (a) an effective Registration Statement on Form F-3, File No. 333-250146 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”), including the Prospectus contained therein (the “Base Prospectus”), (b) if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended (the “Act”)), that have been or will be filed, if required, with the Commission and delivered to the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing only certain supplemental information regarding the Common Shares, the terms of the Offering and the Company, and (c) a Prospectus Supplement (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”) containing certain supplemental information regarding the Common Shares and terms of the Offering and the Company that has been or will be filed with the Commission and has been delivered to the Investor prior to the Closing.
____________________________
1 Rounded down to the nearest whole number.
2 Rounded down to the nearest whole number.
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4. The Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor the Purchased Shares and Purchased Warrants for the Total Purchase Price.
5. The manner of settlement of the shares of Common Shares and Warrants purchased by the Investor shall be as follows:
(i) Delivery of representation of stock ownership using Direct Registration System (“DRS”) representing the Purchased Shares purchased by the Investor, or upon Investor’s request, delivery of a certificate representing the Purchased Shares purchased by the Investor at the Investor’s address by Odyssey Trust Company, the Company’s transfer agent (the “Transfer Agent”).
(ii) Delivery of a Warrant certificate representing the Purchased Warrants purchased by the Investor at the Investor’s address by the Company
NO LATER THAN 10:00 A.M. (EASTERN TIME) ON THE THIRD BUSINESS DAY IMMEDIATELY AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
(iii) Deliver to the Company, this duly completed and executed Agreement and the Total Purchase Price.
6. The Investor represents that it has received (or otherwise had made available to it by the filing by the Company of an electronic version thereof with the Commission) the Base Prospectus, declared effective by the Commission on November 25, 2020, which is a part of the Company’s Registration Statement and the documents incorporated by reference therein, any Issuer Free Writing Prospectus and the Prospectus Supplement (collectively, the “Disclosure Package”), prior to or in connection with the receipt of this Agreement. The Investor acknowledges that, prior to the delivery of this Agreement to the Company, the Investor may receive certain additional information regarding the Offering and the Company (the “Offering Information”). Such information may be provided to the Investor by any means permitted under the Act, including the Prospectus Supplement, a free writing prospectus and oral communications.
7. No offer by the Investor to buy Common Shares and Warrants will be accepted and no part of the purchase price will be delivered to the Company until the Investor has received or has public access to the Disclosure Package and the Offering Information and the Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the Company sending (orally, in writing or by electronic mail) notice of its acceptance of such offer. An indication of interest will involve no obligation or commitment of any kind until the Investor has been delivered the Disclosure Package and Offering Information and this Agreement is accepted and countersigned by or on behalf of the Company.
8. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Investor:
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(a) Subsidiaries. The Company’s subsidiaries consist of (i) 55% interest in Buckreef Gold Company Limited; (ii) 90% interest in Itetemia Mining Company Limited; (iii) 60% interest in Lunguya Mining Company Ltd.; (iv) 100% interest in Tancan Mining Company Limited; (v) 100% interest in Tanzania American International Development Corporation 2000 Limited; and (vi) 75% interest in Northwest Basemetals Company Limited.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of the Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under the Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”)) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by the Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company and the Board of Directors in connection herewith. The Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No Conflicts. The execution, delivery and performance by the Company of the Agreement to which it is a party, the issuance and sale of the Common Shares and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
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(e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority in connection with the execution, delivery and performance by the Company of the Agreement, other than: (i) the filings required pursuant to Section 9.4 of this Agreement, and (ii) the notice and/or application(s) to the NYSE American and Toronto Stock Exchange (collectively “Trading Market”) for the issuance and sale of the Common Shares and the listing of such Common Shares for trading thereon in the time and manner required thereby (collectively, the “Required Approvals”). There is no market for the Warrants and the Company does not plan on applying to list the Warrants on any trading system.
(f) Issuance of the Investor Common Shares. The Common Shares to be issued to the Investor (“Investor Shares”) are duly authorized and, when issued and paid for in accordance with the Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens imposed by the Company other than restrictions on transfer provided for in the Agreement, if any. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on November 25, 2020, including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(g) Capital Stock. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Agreement. The issuance and sale of the Investor Shares will not obligate the Company to issue Common Shares or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of the Board of Directors or others is required for the issuance and sale of the Investor Shares. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
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(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with International Financial Reporting Standards applied on a consistent basis during the periods involved (“IFRS”), and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to IFRS or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except as disclosed in the SEC Reports. The Company does not have pending before the Commission any request for confidential treatment of information. No event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the date that this representation is made.
(j) Litigation. Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Agreement or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty except as disclosed in an SEC Report. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or her capacity as such). The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
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(k) Risk Factors. An investment in the Company is subject to a number of risk and an Investor may lose all of his or her money. The material risks that the Company may be subject to is set forth in the “Risk Factor’s section of the Registration Statement.
9. Other Agreements of the Parties.
9.1 Shares Sold Pursuant to a Registration Statement. The Common Shares and Warrants to be sold to the Investor and the Common Shares underlying the Warrants (the “Securities”) when exercised will be made pursuant to an effective registration statement and the Common Shares and Common Shares underlying the Warrants will be free of all legends. If at any time following the date hereof the Registration Statement is not effective or is not otherwise available for the sale of the Investor Shares, the Company shall immediately notify the holders of the Investor Shares in writing that such Registration Statement is not then effective and thereafter shall promptly notify such holders when the Registration Statement is effective again and available for the resale of the Common Shares underlying the Warrants (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or the Investor to sell, any of the Investor Shares in compliance with applicable federal and state securities laws).
9.2 Furnishing of Information. The Company covenants to maintain the registration of the Common Shares under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
9.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Common Shares and Warrants for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
9.4 Securities Laws Disclosure; Publicity; Rights Plan. The Company shall file a Current Report on Form 6-K with the Commission describing the terms of the transaction. From and after the Form 6-K, the Company represents to the Investor that it shall have publicly disclosed all material, non-public information delivered to the Investor by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Agreement. In addition, effective upon the issuance of Form 6-K, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Investors or any of their Affiliates on the other hand, shall terminate. The Company shall not publicly disclose the name of the Investor, or include the name of the Investor in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Investor, except (a) as required by federal securities laws and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Investor with prior notice of such disclosure permitted under this clause (b). No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Investor is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Investor could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Investor Shares under the Agreement.
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9.5 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Agreement, which shall be disclosed pursuant to Section 9.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide the Investor or its agents or counsel with any information that constitutes, or the Company believes constitutes, material non-public information, unless prior thereto the Investor shall have consented to the receipt of such information, which consent shall constitute the Investor’s agreement to keep such information confidential. The Company understands and confirms that the Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to the Investor without the Investor’s consent, the Company hereby covenants and agrees that the Investor shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Investor shall remain subject to applicable law. The Company understands and confirms that the Investor shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
9.6 Indemnification of Investor. Subject to the provisions of this Section 9.6, the Company will indemnify and hold the Investor and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Investor (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Investor Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in the Agreement or (b) any action instituted against the Investor Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Investor Parties, with respect to any of the transactions contemplated by the Agreement (unless such action is based upon a breach of such Investor Party’s representations, warranties or covenants under the Agreement or understandings such Investor Parties may have with any such stockholder or any violations by such Investor Parties of state or federal securities laws or any other conduct by such Investor Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Investor Party in respect of which indemnity may be sought pursuant to this Agreement, such Investor Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Investor Party. Any Investor Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Investor Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Investor Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Investor Party under this Agreement (y) for any settlement by an Investor Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Investor Party’s breach of any of the representations, warranties, covenants or agreements made by such Investor Party in this Agreement. The indemnification required by this Section 9.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills relating to indemnifiable amounts are received by the Company. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Investor Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
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9.7 Listing of Common Shares. The sale of the Common Shares and Common Shares underlying the Warrants by the Company to the Investor is condition upon approval of the additional listing of the Common Shares by the Trading Markets. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Shares on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Investor Shares on such Trading Market and promptly secure the listing of all of the Investor Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Shares traded on any other Trading Market, it will then include in such application all of the Investor Shares. The Company will then take all action reasonably necessary to continue the listing or quotation and trading of its Common Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Shares for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Shares for the purpose of enabling the Company to issue Investor Shares pursuant to this Agreement.
Agreed and Accepted on December ___, 2020
TANZANIAN GOLD CORPORATION
___________________________________________
Name: James E. Sinclair
Title: Executive Chairman
[Company Signature Page to Tanzanian Gold Corporation Subscription Agreement]
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Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.
Dated: December __, 2020
INVESTOR
Name of Investor
By:_______________________________________
Title:______________________________________
| Address: | _______________________________ |
_______________________________
Common Shares and Warrants to be issued in the following exact name(s):
| Name | Mailing ad Delivery Address | Common Shares to be DRS unless box checked |
|
________________________
|
______________________________
|
o
|
|
________________________
|
______________________________
|
o
|
|
_______________________
|
______________________________
|
o
|
Warrants will be delivered by certificated form in the exact name indicated above.
[Investor Signature Page to Tanzanian Gold Corporation Subscription Agreement]
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF COMMON SHARES AND WARRANTS
1. Authorization and Sale of the Common Shares and Warrants. Subject to the terms and conditions of this Agreement, the Company has authorized the sale of the Securities.
2. Agreement to Sell and Purchase the Common Shares and Warrants. At the Closing (as defined in Section 3.1 below), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth herein, the Purchased Shares and the Purchased Warrants for the Total Purchase Price.
3. Closing and Delivery of the Common Shares and Warrants and Purchase Price.
3.1 Closing. The completion of the purchase and sale of the Common Shares and Warrants (the “Closing”) shall occur at a place and time (the “Closing Date”) to be specified by the Company and the Investor. At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the Investor the Purchased Shares registered in the name of the Investor pursuant to DRS, or in the alternative, at the request of the Investor, certificates representing the Purchased Shares to the Investor; (b) the Company shall deliver to the Investor the Warrants for the Purchased Warrants registered in the name of the Investor and (c) the Total Purchase Price for the Purchased Shares and Purchased Warrants being purchased by the Investor will be delivered by or on behalf of the Investor to the Company.
3.2 Conditions to the Company’s Obligations. The Company’s obligation to issue and sell the Purchased Shares and Purchased Warrants to the Investor shall be subject to: (i) the receipt by the Company of the Total Purchase Price, (ii) the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing Date, and (iii) the conditional acceptance of the Offering by the NYSE American and Toronto Stock Exchange.
4. Representations, Warranties and Covenants of the Investor. The Investor acknowledges, represents and warrants to, and agrees with, the Company that:
4.1 The Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and this Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as to the enforceability of any rights to indemnification or contribution that may violate the public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation).
4.2 The Investor had had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Offering and sale of the Securities and the business, financial condition and results of operations of the Company, and all such questions have been answered to the full satisfaction of the Investor.
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4.3 In evaluating the suitability of an investment in the Company, the Investor has not relied upon any representation or information (oral or written) other than as stated in this Agreement and the Disclosure Package. In making an investment decision the Investor has solely relied on its own examination of the Company, the Disclosure Package, the terms of the Offering, including the merits and risks involved.
4.4 The Investor is able bear the financial risks of its investment. The Investor has significant prior investment experience. The Investor is knowledgeable about investment considerations in mining companies like the Company. The Investor has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such a loss should occur. The Investor’s overall commitment to investments is not excessive in view of the Investor’s net worth and financial circumstances and the purchase of the Securities will not cause such commitment to become excessive. The investment in the Securities is a suitable one for the Investor.
4.5 The Investor has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to the Agreement or the transactions contemplated hereby.
4.6 The Securities to be purchased by the Investor are being acquired for the Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Act, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Act.
4.7 Since the date on which the Company or its agents first contacted the Investor, its representative, about the Offering, the Investor has maintained information about the Offering in confidence (other with respect to disclosures to the Investor’s advisors who are under a legal obligation of confidentiality) and has not engaged in any transactions in the securities of the Company. The Investor covenants that it has not and will not engage in any transactions in the securities of the Company or disclose any information about the Offering (other than to its advisors who are under a legal obligation of confidentiality) prior to the time that the transactions contemplated by the Agreements are publicly disclosed by the Company.
4.8 The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure Package, the Offering Information or any other materials presented to the Investor in connection with the purchase of the Securities constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors and made such investigation as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Securities. The Investor has received all documents requested by the Investor, have carefully reviewed them and understand the information contained therein.
4.9 The Investor understands that neither the Commission nor any state securities commission or other regulatory authority has approved the Securities, or passed upon or endorsed the merits of the Offering or confirmed the accuracy or determined the adequacy of the Offering. The Offering has not been reviewed by any federal, state or other regulatory authority.
4.10 The Investor was not induced to invest in the Company or in the Securities by any form of general solicitation or general advertising including, but not limited to, the following: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over the news or radio; or (ii) any seminar or meeting whose attendees were invited by any general solicitation or advertising.
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5. Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Investor herein will survive the execution of this Agreement, the delivery to the Investor of the Securities being purchased and the payment therefor.
6. Changes. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor.
7. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement.
8. Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.
9. Governing Law. This Agreement will be governed by, and construed in accordance with, the laws of the Province of Alberta, Canada, without giving effect to the principles of conflicts of law that would require the application of the laws of any other jurisdiction.
10. Counterparts. This Agreement may be executed in two or more counterparts, each of which will constitute an original, but all of which, when taken together, will constitute but one instrument, and will become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. The Company and the Investor acknowledge and agree that the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or the filing by the Company of an electronic version thereof with the Commission).
11. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or the filing by the Company of an electronic version thereof with the Commission), shall constitute written confirmation of the Company’s sale of shares of Securities to such Investor.
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Exhibit 10.2
TANZANIAN GOLD CORPORATION
WARRANT CERTIFICATE
| No.: CS-1 | Number of Warrants: ____________ |
Original Issue Date: _________________
THIS WARRANT CERTIFICATE certifies that for value received, ________________________ or its registered assigns is entitled to subscribe for and purchase, during the Term (as hereinafter defined), the number of warrants specified above, each of which entitles the holder thereof to purchase during the term, one fully paid and non-assessable common share, without par value per share, of Tanzanian Gold Corporation, a corporation incorporated under the Business Corporations Act (Alberta) (the “Issuer”), at an exercise price per common share equal to $1.50 (the “Warrant Price”), as may be adjusted, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. Capitalized terms used in this Warrant Certificate (this “Warrant” or “Warrant Certificate”) and not otherwise defined herein shall have the respective meanings specified in Section 6 hereof. Dollar amounts shall mean United States dollars.
1. Term. The term of this Warrant Certificate shall commence on the Original Issue Date and shall expire at 6:00 p.m., Eastern Time, on the third (3rd) anniversary of the Original Issue Date (such period being the “Term”).
2. Method of Exercise; Payment; Issuance of New Warrant Certificate; Transfer and Exchange.
(a) Time of Exercise. The exercise rights represented by this Warrant Certificate may be exercised at anytime during the Term.
(b) Method of Exercise. Each Warrant shall entitle the Holder to purchase one common share of the Issuer at the Warrant Price. The Holder hereof may exercise the Warrants, in whole or in part, by the surrender of the Warrant Certificate (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which the Warrant Certificate is then being exercised, payable at such Holder’s election by certified or official bank check or by wire transfer to an account designated by the Issuer.
(c) Issuance of Stock Certificates. In the event of any exercise of the Warrants in accordance with and subject to the terms and conditions hereof, certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof as soon as reasonably practicable and in no event shall such certificate be delivered later than ten (10) business days from the date in which the notice of election was received by the Issuer.
(d) Transferability of Warrant. Subject to Section 2(e) hereof, the Warrants may be transferred by a Holder, in whole or in part, without the consent of the Issuer. If transferred pursuant to this paragraph, the Warrants may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant Certificate at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached here to) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant Certificate is exchangeable at the principal office of the Issuer for Warrants to purchase the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant Certificate except as to the number of shares of Warrant Stock issuable pursuant thereto.
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(e) Compliance with Securities Laws.
(i) The Holder of this Warrant Certificate, by acceptance hereof, acknowledges that the Warrants and the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and agrees that the Holder will not acquire the Warrant Stock, offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws.
(f) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Warrant Stock.
3. Adjustment of Warrant Price and Number of Shares Issuable Upon Exercise. The Warrant Price and the Warrant Share Number shall be subject to adjustment from time to time as set forth in this Section 3. The Issuer shall give the Holder notice of any event described below that requires an adjustment pursuant to this Section 3 in accordance with the notice provisions set forth in Section 4.
(a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale.
(i) In case the Issuer after the Original Issue Date shall do any of the following (each, a “Triggering Event”): (A) consolidate or merge with or into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (B) permit any other Person to consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be changed into or exchanged for Securities of any other Person or cash or any other property, or (C) transfer all or substantially all of its properties or assets to any other Person, or (D) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made to the Warrant Price and the number of shares of Warrant Stock that may be purchased upon exercise of this Warrant Certificate so that, upon the basis and the terms and in the manner provided in this Warrant Certificate the Holder of this Warrant Certificate shall be entitled upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent the Warrants are not exercised prior to such Triggering Event, to receive at the Warrant Price as adjusted to take into account the consummation of such Triggering Event, in lieu of the Warrant Stock issuable upon such exercise of the Warrants prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such Triggering Event if such Holder had exercised the rights represented by this Warrant Certificate immediately prior thereto subject to adjustments (subsequent to such corporate action) as nearly equivalent as possible to the adjustments provided for elsewhere in this Section 3. Upon the occurrence of a Triggering Event, the Issuer shall notify the Holder in writing of such Triggering Event and provide the calculations in determining the amount of issuable Securities, cash or property issuable upon exercise of the new warrant and the adjusted Warrant Price. Upon the Holder’s request, the continuing or surviving corporation as a result of such Triggering Event shall issue to the Holder a new warrant of like tenor evidencing the right to purchase the adjusted amount of Securities, cash or property and the adjusted Warrant Price pursuant to the terms and provisions of this Section 3(a)(i).
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(b) Stock Dividends, Subdivisions and Combinations. If at any time the Issuer shall:
(i) make or issue or set a record date for the holders of the Common Shares for the purpose of entitling them to receive a dividend payable in, or other distribution of, Common Shares,
(ii) subdivide its outstanding Common Shares into a larger number of Common Shares, or
(iii) combine its outstanding Common Shares into a smaller number of Common Shares,
then (A) the number of shares of Warrant Stock for which this Warrant Certificate is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Warrant Stock which a record holder of the same number of shares of Warrant Stock for which this Warrant Certificate is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (B) the Warrant Price then in effect shall be adjusted to equal (1) the Warrant Price then in effect multiplied by the number of shares of Warrant Stock for which this Warrant is exercisable immediately prior to the adjustment divided by (2) the number of shares of Warrant Stock for which this Warrant is exercisable immediately after such adjustment.
4. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number is adjusted pursuant to Section 3 hereof (for purposes of this Section 4, each an “Adjustment”), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in reasonable detail, the event requiring the Adjustment, the amount of the Adjustment, the method by which such Adjustment was calculated (including a description of the basis on which the Board made any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such Adjustment, and shall cause copies of such certificate to be delivered to the Holder of this Warrant Certificate promptly after each Adjustment.
5. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall round the number of shares to be issued upon exercise down to the nearest whole number of shares and pay cash in lieu of such fractional interest.
6. Definitions. For the purposes of this Warrant Certificate, the following terms have the following meanings:
“Board” shall mean the Board of Directors of the Issuer.
“Capital Stock” means and includes (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type.
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“Common Share” means the common share, without par value, of the Issuer and any other Capital Stock into which such stock may hereafter be changed.
“Holders” mean the Persons who shall from time to time own any Warrant. The term “Holder” means one of the Holders.
“Issuer” means Tanzanian Gold Corporation, a corporation incorporated under the Business Corporations Act (Alberta) and its successors.
“Original Issue Date” means the date set forth on the face of this Warrant Certificate.
“Person” means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, governmental authority or other entity of whatever nature.
“Securities” means any debt or equity securities of any Person, whether now or hereafter authorized, any instrument convertible into or exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. “Security” means one of the Securities.
“Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute then in effect.
“Term” has the meaning specified in Section 1 hereof.
“Warrant Price” initially means $1.50 per share, as such price may be adjusted from time to time as shall result from the adjustments specified in this Warrant Certificate, including Section 3 hereto.
“Warrant Share Number” means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant Certificate, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof.
“Warrant Stock” means Common Shares issued or issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
7. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant Certificate may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Issuer and the Holder.
8. Governing Law. This Warrant Certificate shall be governed by and construed in accordance with the internal laws of Alberta without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Warrant Certificate shall not be interpreted or construed with any presumption against the party causing this Warrant Certificate to be drafted.
9. Notices. All notices and other communications given or made pursuant to this Warrant Certificate shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified, (ii) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the address indicated for such party in the Purchase Agreement, or at such other address as such party may designate by 10 days advance written notice to the other party given in the foregoing manner.
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10. Successors and Assigns. This Warrant Certificate and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or holder of Warrant Stock.
11. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant Certificate, but this Warrant Certificate shall be construed as if such unenforceable provision had never been contained herein.
12. Titles and Subtitles. The titles and subtitles used in this Warrant Certificate are used for convenience only and are not to be considered in construing or interpreting this Warrant Certificate.
13. Force Majeure. Neither party shall be liable for any delays or failures in performance resulting from acts beyond its reasonable control including, without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed.
| Dated: _____________________ | TANZANIAN GOLD CORPORATION | |
| By: __________________________ | ||
| Name: James E. Sinclair | ||
| Title: Executive Chairman |
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EXERCISE FORM
WARRANT
TANZANIAN GOLD CORPORATION
The undersigned, ________________________, pursuant to the provisions of the within Warrant Certificate (the “Warrant”), hereby elects to exercise _______________ warrants to purchase ____________ Common Shares of Tanzanian Gold Corporation covered by the Warrant.
Number of Common Shares beneficially owned or deemed beneficially owned by the Holder on the date of Exercise:____________________________________________
Holder represents and warrants that Holder is acquiring the Warrant Stock pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. Holder represents that all of the representations and warranties of Holder in the Warrant is true and correct as of the date hereof
In connection with the exercise of the Warrant, the Holder has paid the sum of $_________ by certified or official bank check (or via wire transfer) to the Issuer in accordance with the terms of the Warrant, which is being delivered currently with this Exercise Form.
| Dated: _______________ | ||
| Signature | ||
| Print Name Address | ||
|
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ASSIGNMENT
FOR VALUE RECEIVED, _______________________________ hereby sells, assigns and transfers unto ______________________________________________________________________________, __________________ warrants under Warrant Certificate No. ____ and all rights evidenced thereby and does irrevocably constitute and appoint _____________________________, attorney, to transfer the said Warrant on the books of the within named corporation.
| _______ | Signature | ||
| Dated: | Print Name | ||
| Address | |||
FOR USE BY THE ISSUER ONLY:
This Warrant Certificate No. _____ cancelled (or transferred or exchanged) this _____ day of ___________________, 20____, __________________________ Common Shares issued therefor in the name of _______________________, Warrant No. _____ issued for __________________________ Common Shares in the name of
____________________________________________________________________________ .
8
Exhibit 10.3
SUPPLEMENTAL AGREEMENT
This Supplemental Agreement (the “Agreement”), dated as of December 18, 2020, is entered into by between TANZANIAN GOLD CORPORATION, a company incorporated under the laws of the Province of Alberta, with its principal executive office located at #202, 5626 Larch Street, Vancouver, British Columbia, Canada V6M 4E1 (the “Company”), YA II PN, LTD, an exempted company incorporated in the Cayman Islands with limited liability and whose registered office is at PO Box 309, Ugland House, Grand Cayman KY1 1101 (“YA II”), and RIVERFORT GLOBAL OPPORTUNITIES PLC, a company incorporated in England and Wales and whose principal office is at 72 Charlotte Street, London W1T 4QQ, United Kingdom (“Riverfort” and collectively with YA II, the “Buyers”).
BACKGROUND
| (A) | On July 22, 2020 the parties entered into a securities purchase agreement (the “Securities Purchase Agreement”) pursuant to which the Company issued and sold to the Buyers, and the Buyers purchased from the Company, Tranche A Debentures in the principal amount of $7,000,000, which are convertible into shares of Common Stock of the Company, of which (i) $4,000,000 was issued and sold on July 27, 2020, (ii) $2,000,000 was issued and sold on August 20, 2020, and (iii) $1,000,000 was issued and sold on September 1, 2020, for a total purchase price of $7,000,000 in the respective amounts set forth opposite each Buyers’ name on Schedule I attached to the Securities Purchase Agreement. |
| (B) | Pursuant to the Securities Purchase Agreement the parties agreed that, upon the terms and subject to the conditions contained therein, the Company may elect to issue and sell to the Buyers, and the Buyers shall purchase Tranche B Debentures in the principal amount of up to $7,000,000, of which (i) $2,000,000 shall be purchased at least 60 days, but not later than 90 days following the Third Closing; (ii) $2,000,000 shall be purchased at least 30 days, but not later than 60 days following the Fourth Closing; (iii) $2,000,000 shall be purchased at least 30 days, but not later than 60 days following the Fifth Closing; and (iv) $1,000,000 shall be purchased at least 30 days, but not later than 60 days following the Sixth Closing, for a total purchase price of up to $7,000,000 in the respective principal amounts set forth opposite each Buyers’ name on Schedule I attached to the Securities Purchase Agreement. |
| (C) | The parties desire to supplement the Securities Purchase Agreement in order to modify the terms and conditions in respect of the issuance and sale of the Tranche B Debentures at the Tranche B Closings as set forth herein. |
AGREED TERMS
1. Definitions and interpretation
1.1 For purposes of this Agreement, the following terms shall have the following meanings
“Commitment Amount” shall have the meaning set forth in the Securities Purchase Agreement.
“End Date” shall have the meanings set forth in Clause 2.2(c) of this Agreement.
“Fourth Closing” shall have the meaning set forth in the Securities Purchase Agreement.
“Fourth Closing Raise Proceeds” shall have the meanings set forth in Clause 3.3 of this Agreement.
“Purchase Notice” shall have the meaning set forth in the Securities Purchase Agreement.
“Remaining Commitment Amount” shall have the meanings set forth in Clause 2.2 of this Agreement.
“Subsequent Tranche B Closings” shall have the meaning set forth in Clause 2.2 of this Agreement, and a Subsequent Tranche B Closing shall refer to the closing of any portion of the principal amount of Tranche B Debentures that were subject to the Fifth Closing, Sixth Closing or Seventh Closing.
“Third Closing” shall have the meaning set forth in the Securities Purchase Agreement.
“Tranche A Debentures” shall have the meaning set forth in the Securities Purchase Agreement.
“Tranche B Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
“Tranche B Closings” shall have the meaning set forth in the Securities Purchase Agreement.
“Tranche B Debentures” shall have the meaning set forth in the Securities Purchase Agreement.
1.2 All other capitalized terms not otherwise defined herein shall have the meanings set forth in the Securities Purchase Agreement.
2. Modifications to Closing Dates and Fees.
2.1 The parties hereby agree that the deadline for Company to deliver a Purchase Notice in respect of the Fourth Closing shall be extended from the 90th day from the Third Closing to January 31, 2021, or such other date as may be agreed by the parties. If the Company is unable to, or fails to provide a Purchase Notice for the Fourth Closing by January 31, 2021, or any other Purchase Notice by the applicable deadline, the Company shall nonetheless be able to subsequently provide such Purchase Notice with the consent of the Buyers.
2.2 After the occurrence of the Fourth Closing, the amount available to be advanced to the Company pursuant to the remaining Tranche B Closings will be $5,000,000 (the “Remaining Commitment Amount”). The parties hereby agree that the ability of the Company to submit Purchase Notices with respect to the Remaining Commitment Amount shall be modified such that with respect to the timing and the principal amount of the Tranche B Debentures to be issued pursuant to subsequent closings (which shall hereafter be referred to as the “Subsequent Tranche B Closings”) the parties hereby agree to the following procedures:
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The Company shall have the right to request that the Buyers purchase additional Series B Debentures at a Subsequent Tranche B Closing by providing a Purchase Notice, and subject to the satisfaction of the conditions set forth in Clause 7(b) of the Agreement, the Buyers shall be obligated to purchase such Series B Debentures at each Subsequent Tranche B Closing, provided that:
| (a) | each Subsequent Tranche B Closing shall take place at 10:00 a.m., New York time, on such Business Day selected by the Company in a Purchase Notice which shall be least 30 days following the Tranche B Closing Date in respect of the prior Tranche B Closing; |
| (b) | each Subsequent Tranche B Closing shall be in an amount to be selected by the Company in a Purchase Notice which amount shall not be in excess of $2,000,000 and shall not, when combined with the amount of all other Convertible Debentures issued hereunder, exceed the Commitment Amount; |
| (c) | each Subsequent Tranche B Closing shall be completed on or before December 31, 2021 (the “End Date”) provided that the Company may elect to extend the End Date to December 31, 2022 by paying an extension fee to the Buyers in the total amount equal to 2% of the remaining portion of the Commitment Amount at the time of such request; and |
| (d) | with respect to each Subsequent Tranche B Closing, within one day of receipt of the Company’s Purchase Notice selecting the applicable closing date, the Buyers may defer the closing date of such Subsequent Tranche B Closing by up to 30 days without regards to the End Date for which an extension fee would not be required. |
2.3 The Implementation Fee in respect of each Tranche B Closing (including, for the avoidance of doubt, the Subsequent Tranche B Closings) shall be increased from 3.95% to 6.95%. In furtherance of the foregoing, clause 1(d) of the Securities Purchase Agreement shall be deleted and replaced with the following:
1(d) Payment of Fees. On the date of the First Closing the Company shall pay a commitment fee in an amount in cash equal to 1.5% of the Commitment Amount (the “Commitment Fee”) which shall be paid to the Buyers (or their designated affiliate) in the respective amounts set forth below each Buyers’ name on Schedule I. At each Tranche A Closing the Company shall pay an implementation fee in an amount equal to 3.95% of the purchase price of each Tranche A closing and at each Tranche B Closing the Company shall pay an implementation fee in an amount equal to 6.95% of the purchase price of each Tranche B Closing (collectively, the “Implementation Fee”). The Commitment Fee due and payable at the First Closing and the Implementation Fee due and payable at each Tranche A Closing and Tranche B Closing shall be deducted from the gross proceeds of such closing. The Company authorizes each Buyer to deduct the Commitment Fee and Implementation Fee, as applicable, due hereunder from the gross process of the purchase of any Convertible Debentures due at each closing.
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3. Modifications to Conditions Precedent to the Tranche B Closings.
3.1 Market Capitalization. The market capitalization requirement set out in clause 7(b)(ii) of the Securities Purchase Agreement shall be reduced from $100 million to $50 million. In furtherance of the foregoing, clause 7(b)(ii) of the Securities Purchase Agreement shall be deleted and replaced with the following:
7(b)((ii) The market capitalization of the Company is at least $50 million, as displayed on Bloomberg LP under the ticker symbol “TRX.US” as of the last trading day immediately prior to each applicable Tranche B Closing Date.
3.2 Removal of Gold Production Condition. Clause 7(b)(iii) of the Securities Purchase Agreement shall be deleted in its entirety and replaced with “7(b)(iii) [RESERVED]” in order to maintain the continuity of the section numbers.
3.3 Additional Conditions Precedent. The following additional conditions precedent to the Tranche B Closings shall be added to the Securities Purchase Agreement as follows:
7(b)(vi) With respect to the Fourth Closing, the Company shall have raised gross proceeds of at least $1,000,000 through the issuance and sale of equity securities between December 1, 2020 and the date of the Fourth Closing (the amount actually raised during this period shall be referred to as the “Fourth Closing Raise Proceeds”).
7(b)(vii) With respect to each Subsequent Tranche B Closing, the Company shall have raised gross proceeds through the issuance and sale of equity securities between December 1, 2020 and the date of the each Subsequent Tranche B Closing, in an amount equal to at least the sum of (a) the aggregate principal amount of the Tranche B Debentures issued prior to the applicable Tranche B Closing, and (b), the aggregate principal amount of the Tranche B Debentures to be issued at the applicable Tranche B Closing.
7(b)(viii) With respect to each Subsequent Tranche B Closing, the sum of (a) the aggregate principal balance of all the Tranche B Debentures issued as of the applicable Tranche B Closing Date, and (b) the aggregate principal amount of the Tranche B Debentures to be issued at the applicable Subsequent Tranche B Closing, shall not exceed $7,000,000.
7(b)(ix) The Company shall have received all governmental permissions, authorities, permits, and shall have satisfied all statutory requirements (collectively, “Governmental Requirements”) necessary to implement, build and operate the 40 tonnes per hour oxide processing facility at the Company’s drilling program at the Buckreef Project, and all such required Governmental Requirements shall be in full force and effect as of each Tranche B Closing Date.
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| 4. | Representations and warranties |
4.1 The Company represents and warrants to the Borrowers as of the date of this Agreement that:
| (a) | it has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement; |
| (b) | it has taken all necessary corporate actions to authorize the execution, delivery and performance of this Agreement and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection therewith; and |
| (c) | the obligations assumed by the Company in this Agreement are legal, valid, and enforceable obligations binding on it in accordance with its terms. |
5. Counterparts and delivery
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
6. Governing law
Section 9 of the Securities Purchase Agreement shall set forth the governing law, jurisdiction and jury trial for this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement to be signed by their duly authorized officers.
| COMPANY:
TANZANIAN GOLD CORPORATION
By: /s/ Stephen Mullowney________________ Stephen Mullowney, Chief Executive Officer
INVESTOR: | |
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YA II PN, LTD.
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| By: Yorkville Advisors Global, LP | |
| Its: Investment Manager | |
| By: Yorkville Advisors Global II, LLC | |
| Its: General Partner | |
| By:_/s/ Matt Beckman_________ | |
| Name: Matt Beckman | |
| Title: Member | |
| RIVERFORT GLOBAL OPPORTUNITIES PLC | |
| By: /s/ Philip Haydn-Slater_______ | |
| Name: Philip Haydn-Slater |
6
Exhibit 99.1
| CONNECTICUT OFFICE: | VANCOUVER OFFICE: | |
| PO Box 577 | #202, 5626 Larch Street | |
| Sherman, CT | Vancouver, BC | |
| U.S.A. 06784 | Canada V6M 4E1 | |
| investors@Tangoldcorp.com | Toll Free (844) 364-1830 | |
| www.Tangoldcorp.com |
Tanzanian Gold Announces the Sale of
$2,993,390 of Common Shares and Warrants
FOR IMMEDIATE RELEASE December 21, 2020
VANCOUVER, December 21, 2020 (GLOBE NEWSWIRE) -- Tanzanian Gold Corporation’s (TSX:TNX) (NYSE American:TRX) (the “Company’s”) Board of Directors is pleased to announce the entering into subscription agreements for the sale of 5,545,325 common shares and warrants to purchase 2,772,637 common shares raising in $2,993,390 in the aggregate with certain investors. The common shares and warrants were sold at a fixed combination price of $0.5398 for each common share and a one-half purchase warrant with the right of each whole warrant to purchase one common share at $1.50 for a period of three years.
The proceeds from the sale of common shares and warrants will be used for capital expenditures, continued exploration, general corporate purposes and working capital.
The common shares and warrants, and common shares underlying the warrants, are being offered pursuant to an effective shelf registration statement on Form F-3, which was previously filed with the Securities and Exchange Commission and declared effective on November 25, 2020. The sale of the common shares and warrants is expected to close on or around December 23, 2020, subject to the satisfaction of customary closing conditions, including acceptance of the listing of the common shares by the NYSE American and the Toronto Stock Exchange.
Respectfully Submitted,
“James E. Sinclair”
James E. Sinclair
Executive Chairman
For further information, please contact Michael Martin, Investor Relations, m.martin@tangoldcorp.com, 860-248-0999, or visit the Company website at www.tanzaniangoldcorp.com
Cautionary Note Regarding Forward-looking Statements
Certain of the statements made herein may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Often, but not always, forward- looking statements and forward-looking information can be identified using words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, ,occur or be achieved. Forward-looking statements or information herein include, but are not limited to that the sale of the common shares and warrants will be completed.
Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. We have made certain assumptions about the forward-looking statements and information and even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: gold price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; currency fluctuations; speculative nature of gold exploration; global economic climate; dilution; share price volatility; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property, as well as those factors discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s Form 20-F Annual Report for the year ended August 31, 2020. .
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward- looking statements and information continually as conditions change and you are referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada and the U.S.