Stock Purchase Agreement dated September 14, 2022

Execution Version

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”), dated effective as of September 14, 2022, is entered into by and among I-Minerals Inc., a Canadian corporation (“Seller”), BV Lending, LLC, an Idaho limited liability company (“Buyer”), and i-minerals USA, inc., an Idaho corporation and wholly owned subsidiary of Seller (the “Company”). Capitalized terms used in this Agreement have the meanings given to such terms below, as such definitions are identified by the cross-references set forth in Exhibit A to this Agreement.

RECITALS

A.                  Seller owns all the issued and outstanding shares of capital stock (the “Shares”) of the Company.  Seller desires to sell the Shares to Buyer, and Buyer desires to accept the Shares from Seller (the “Transaction”), subject to the terms and conditions set forth herein.

B.                  Pursuant to the Loan Agreements dated June 1, 2016, September 11, 2018, and October 25, 2019, each among Buyer, Seller and the Company (as amended to date, collectively the “Loan Agreements”), Buyer agreed to advance certain funds to Seller to develop that certain mining project referred to as the Bovill Project and located in Latah County, Idaho, U.S.A (the “Project”). 

C.                  As of the date hereof, the aggregate amount of principal and interest outstanding and owed by Seller to Buyer under the Loan Agreements is equal to $35,400,000 (the “Seller Debt”).

D.                  Pursuant to advances made by Seller to the Company prior to the date hereof (together with any advances between the date hereof and Closing, collectively, the “Company Loan”), the Company owes Seller an aggregate amount of principal and interest outstanding equal to $25,700,000 (as such debt exists on the Closing Date, the “Company Debt”).

E.                   Pursuant to that certain contribution agreement to be entered into on or before the Closing between Seller and the Company (the “Contribution Agreement”), Seller will contribute and assign all of Seller’s right, title and interest in and to the right to receive payment of the Company Debt to the Company as a capital contribution to the Company, and the Company Debt will thereby be cancelled in its entirety.

F.                   Buyer and Seller have agreed the fair market value of the Shares, after giving effect to the Contribution Agreement, is $3,000,000 (the “Share Value”).

G.                 The Shares constitute all or substantially all of the property of Seller and, as such, the shareholders of Seller (“Seller Shareholders”) must approve the Transaction in accordance with Section 189(3) of the Canada Business Corporations Act and Section 5.6 of Multilateral Instrument – 61-101 (the “Seller Shareholder Resolution”).

H.                  Seller has received the opinion of RwE Growth Partners, Inc. (the “Financial Advisor”) to the effect that, as of the date of such opinion and based upon and subject to the qualifications set forth therein, the consideration to be received by Seller pursuant to Section 1.1 of this Agreement is fair, from a financial point of view, to the Seller Shareholders (the “Fairness Opinion”).

I.                    The special committee of independent directors (the “Special Committee”) established by the board of directors of Seller (the “Seller Board”) in connection with the transactions contemplated 

by this Agreement and the Seller Board have, after consultation with their financial and legal advisors and reviewing the Fairness Opinion, each unanimously (a) determined that this Agreement and the transactions contemplated hereunder are fair to and in the best interests of Seller and its shareholders, (b) declared it advisable for Seller to enter into this Agreement, (c) approved the execution, delivery and performance of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereunder, and (d) resolved to recommend that Seller Shareholders approve this Agreement and the consummation by Seller of the transactions contemplated hereunder (the “Board Recommendation”).

J.                    Buyer has entered into voting and support agreements dated the date hereof with each director and officer of Seller that owns securities of Seller (the “Supporting Seller Shareholders”), pursuant to which such Supporting Seller Shareholders have agreed, among other things, to vote the common shares in the Seller (the “Seller Shares”) beneficially owned by them in favour of the Seller Shareholder Resolution in accordance with the terms of such agreements.

The parties agree as follows:

AGREEMENT

1.                   Purchase and Sale. 

1.1               Purchase and Sale.  Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares, free and clear of any mortgage, pledge, lien, charge, security interest, claim, community property interest, option, equitable interest, restriction of any kind (including any restriction on use, voting, transfer, receipt of income, or exercise of any other ownership attribute), or other encumbrance (each, an “Encumbrance”), for a purchase price equal to the Share Value payable in the consideration specified in Section 1.2.

1.2               Consideration.  As full consideration for the Shares, Buyer and Seller agree that (a) the Buyer’s obligation to pay the purchase price in an amount equal to the Share Value, and (b) the Seller’s obligation to pay an amount of principal owing under the Loan Agreements equal to the Share Value shall be set-off against each other, dollar-for-dollar, immediately following which the Buyer shall transfer and assign to Seller all of Buyer’s right, title and interest in and to the right to receive payment of the remainder of the outstanding Seller Debt together with any additional interest thereon and any additional amounts loaned to the Seller from Buyer  from the date hereof until the Closing Date (exclusive of any amounts loaned pursuant to the FIRPTA Note) and any interest thereon, the balance of which shall be deemed written off and forgiven as of the Closing. As of the Closing Date, (i) the Loan Agreements, (ii) that certain General Security Agreement dated December 5, 2019, as amended, (iii) that certain Continuing and Unconditional Guaranty dated December 6, 2019, by the Company in favor of Buyer, as amended, and (iv) that certain Mortgage and Security Agreement dated December 5, 2019, by the Company in favor of Buyer, as amended, shall automatically without any action on the part of any party be terminated and no longer effective.  

1.3               FIRPTA Withholding. The parties agree that Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), will apply to the transfer of the Shares pursuant to this Agreement and Seller is obligated to pay, and Buyer is obligated to withhold and pay over to the Internal Revenue Service (the “IRS”), an amount equal to fifteen percent (15%) of the Share Value (such amount, the “FIRPTA Withholding”). Buyer shall timely after the Closing remit the FIRPTA Withholding, and such agreements, certificates, instruments and other documentation in connection therewith, to the IRS as required under applicable law.  The FIRPTA Withholding shall be funded from the following sources of 

funds and in the following priority: (i) first, from the proceeds of the Seller Debt, if any, on hand with Seller as of the Closing Date, and (ii) second, from the proceeds of a promissory note delivered by Seller in favor of Buyer, dated as of the Closing Date, in such principal amount as necessary to fund the balance of the FIRPTA Withholding and in such form and substance as mutually acceptable to the parties (the “FIRPTA Note”).  Within three business days after receiving any refund of all or any portion of the FIRPTA Withholding from the IRS (the “Refunded Amount”), Seller shall remit the Refunded Amount to Buyer by wire transfer of immediately available funds to an account designated in writing by Buyer, and promptly after receipt of such remittance, the outstanding principal of the FIRPTA Note, if applicable, shall be deemed paid and reduced in an amount equal to the Refunded Amount. For the avoidance of doubt, the FIRPTA Note shall be deemed separate from the Seller Debt and shall not be forgiven pursuant to Section 1.2 above. After the date hereof, Seller shall provide Buyer with such assistance as may reasonably be requested by Buyer in connection with (i) the determination of Buyer’s withholding obligations under Section 1445 of the Code and the regulations promulgated thereunder, (ii) the preparation and submission of any documents or materials related to Buyer’s withholding obligations under Section 1445 of the Code and the regulations promulgated thereunder, including, without limitation, any request for a refund of the FIRPTA Withholding, and (iii) Buyer’s compliance with Section 1445 of the Code and the regulations promulgated thereunder. Such assistance shall include, but not be limited to, providing Buyer copies of relevant tax returns and supporting materials, providing Buyer with any records or information that may be relevant to the FIRPTA Withholding, and delivering such powers of attorney and other documents as may be reasonably necessary to carry out the intent of this Section 1.3.

1.4               Cancellation of the Company Debt.  The consummation of the Contribution Agreement shall occur immediately prior to the consummation of any other transaction under this Agreement on the Closing Date.

2.                   Seller Meeting. 

2.1               Holding of Meeting. Subject to the terms and conditions of this Agreement, the Seller will take all action necessary in accordance with all applicable Laws to:

(a)                duly call, give notice of, convene and hold a special meeting of Seller Shareholders (including any adjournment or postponement of such special meeting in accordance with the terms of this Agreement, the “Seller Meeting”) to consider the Seller Shareholder Resolution as promptly as practicable, and in any event not later than the date that is 45 days after the date a definitive Proxy Statement (as defined below) is first mailed to the Seller Shareholders;

(b)               not adjourn, postpone or cancel (or propose the adjournment, postponement or cancellation of) the Seller Meeting without the prior written consent of Buyer, except (i) as required for quorum purposes (in which case the Seller Meeting shall be adjourned and not cancelled) or by applicable law; or (ii) if this Agreement is terminated as required or permitted under Section 10;

(c)                subject to the terms of this Agreement, solicit proxies in favour of the approval of the Seller Shareholder Resolution and against any resolution submitted by any Seller Shareholder that is inconsistent with the Seller Shareholder Resolution and the completion of any of the transactions contemplated by this Agreement, and, if requested by Buyer and at the expense of Buyer, engage a dealer and proxy solicitation agent for such purpose (such dealer and/or agent to be selected by Seller after consultation with Buyer), and cooperate with any such agent or other Persons engaged by Buyer to solicit proxies in favour of the approval of the Seller Shareholder Resolution;

(d)               provide Buyer with copies of or access to information regarding the Seller Meeting generated by any dealer or proxy solicitation services firm, as requested from time to time by Buyer;

(e)               consult with Buyer in fixing the record date for the Seller Meeting and the date of the Seller Meeting, give notice to Buyer of the Seller Meeting and allow Buyer’s representatives and legal counsel to attend the Seller Meeting;

(f)                 promptly advise Buyer, at such times as Buyer may reasonably request and at least on a daily basis on each of the last 10 Business Days prior to the date of the Seller Meeting, as to the aggregate tally of the proxies received by Seller in respect of the Seller Shareholder Resolution;

(g)                promptly advise Buyer of any communication (written or oral) from any Seller Shareholder in opposition to the Transaction, written notice of dissent, purported exercise or withdrawal of dissent rights, and written communications sent by or on behalf of Seller to any Seller Shareholder exercising or purporting to exercise dissent rights;

(h)               not make any payment or settlement offer, or agree to any payment or settlement prior to the Effective Time with respect to dissent rights without the prior written consent of Buyer;

(i)                  not, without Buyer’s consent, change the record date for the Seller Shareholders entitled to vote at the Seller Meeting in connection with any adjournment or postponement of the Seller Meeting unless required by Law;

(j)                 ensure that the Seller Shareholder Resolution will be the first substantive matter on the agenda for the Seller Meeting, unless otherwise previously agreed to in writing by Buyer; and

(k)                at the request of Buyer from time to time, provide Buyer with a list (in both written and electronic form) of (i) the Seller Shareholders, together with their addresses and respective holdings of Seller Shares, (ii) the names, addresses and holdings of all Persons having rights issued by Seller to acquire Seller Shares (including holders of options to purchase Seller Shares) and (iii) participants and book‑based nominee registrants such as CDS & Co., CEDE & Co. and Depository Trust Company, and non‑objecting beneficial owners of Seller Shares, together with their addresses and respective holdings of Seller Shares (the “Seller Shareholder Details”).  The Buyer shall only use the Seller Shareholder Details in accordance with applicable securities laws in Canada and the United States.  The Seller shall from time to time require that its registrar and transfer agent furnish Buyer with such additional information, including updated or additional lists of Seller Shareholders, and lists of securities positions and other assistance as Buyer may reasonably request in order to be able to communicate with respect to the Transaction with the Seller Shareholders and with such other Persons as are entitled to vote on the Seller Shareholder Resolution. 

2.2               Proxy Statement; Schedule 13e-3. 

(a)                Subject to Buyer’s compliance with Section 2.2(e), Seller shall promptly, and no later than 15 days after the date of this Agreement, (i) prepare and complete, in consultation with Buyer, the notice of the Seller Meeting and the accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the Seller Shareholders in connection with the Seller Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement (the “Proxy Statement”), together with any other documents required by Law in connection with the Seller Meeting and the Transaction and (ii) submit the Proxy Statement and any other required documents for review and approval by the TSX Venture Exchange.

(b)               Within five (5) business days following approval of the Proxy Statement by the TSX Venture Exchange, Seller shall file the Proxy Statement and any other required documents with the United States Securities and Exchange Commission (“SEC”). Buyer and Seller shall cooperate to, concurrently with the preparation and filing of the Proxy Statement, jointly prepare and file with the SEC an SEC Rule 13e-3 transaction statement on Schedule 13e-3 (such transaction statement, including any amendment or supplement thereto, the “Schedule 13e-3”) relating to the transactions contemplated by this Agreement.

(c)                As promptly as practicable after the occurrence of the SEC Clearance Event (as defined below), Seller shall cause the Proxy Statement, the Schedule 13e-3 and such other documents to be filed with applicable Canadian securities regulatory authorities and sent to each Seller Shareholder and other Person as required by Law. For the purposes of this section, “SEC Clearance Event” means the occurrence of the following (i) the passing of 10 calendar days following the initial filing with the SEC of the Proxy Statement without notification from SEC staff being received indicating that the SEC will review the Proxy Statement, or (ii) notification from SEC staff that the SEC has completed its review of the Proxy Statement.

(d)               Seller shall ensure that the Proxy Statement and the Schedule 13e-3 comply in all material respects with Law, including without limitation the requirements of the Exchange Act and the rules and regulations promulgated thereunder, do not contain any untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made (a “Misrepresentation”) (except that Seller shall not be responsible for any information included in the Proxy Statement and the Schedule 13e-3 related to Buyer or its respective affiliates or managers that was furnished by Buyer for inclusion in the Proxy Statement and the Schedule 13e-3) and provides the Seller Shareholders with sufficient information to permit them to form a reasoned judgement concerning the matters to be placed before the Seller Meeting. Without limiting the generality of the foregoing, the Proxy Statement must include: (i) a copy of the Fairness Opinion, (ii) a statement that the Special Committee has received the Fairness Opinion, and has, after receiving legal and financial advice, unanimously recommended that the Seller Board approve this Agreement and that the Seller Shareholders vote in favour of the Seller Shareholder Resolution and (iii) a statement that the Seller Board has received the Fairness Opinion, and has unanimously, after receiving legal and financial advice and the recommendation of the Special Committee, determined that the Seller Shareholder Resolution is in the best interests of Seller and recommends that the Seller Shareholders vote in favour of the Seller Shareholder Resolution.

(e)               Seller, Buyer and the Company will cooperate and consult with each other in the preparation of the Proxy Statement and the Schedule 13e-3. Seller shall give Buyer and its legal counsel a reasonable opportunity to review and comment on drafts of the Proxy Statement and the Schedule 

13e-3 and other related documents, and shall give reasonable consideration to any comments made by Buyer and its counsel, and agrees that all information relating solely to Buyer included in the Proxy Statement and the Schedule 13e-3 must be in a form and substance satisfactory to Buyer, acting reasonably. Seller shall as soon as reasonably practicable: (i) notify Buyer of the receipt of any comments from the SEC with respect to the Proxy Statement or the Schedule 13e-3 and any request by the SEC for any amendment to the Proxy Statement or the Schedule 13e-3 or for additional information; and (ii) provide Buyer with copies of all written correspondence between Seller and its Representatives, on the one hand, and the SEC, on the other hand, with respect to the Proxy Statement and the Schedule 13e-3. Seller shall use its reasonable best efforts to resolve, and each party agrees to consult and cooperate with the other party in resolving, all SEC comments with respect to the Proxy Statement and the Schedule 13e-3 as promptly as practicable after receipt thereof and to cause the Proxy Statement in definitive form to be cleared by the SEC as promptly as reasonably practicable. Seller shall consult with Buyer prior to responding to SEC comments with respect to the preliminary Proxy Statement and the Schedule 13e-3.

(f)                 Buyer shall promptly provide all necessary information concerning Buyer that is required by Law to be included by Seller in the Proxy Statement and the Schedule 13e-3 or other related documents to Seller in writing, and shall ensure that such information does not contain any Misrepresentation.

(g)                Each Party shall promptly notify the other parties if it becomes aware that the Proxy Statement or the Schedule 13e-3 contains a Misrepresentation, or otherwise requires an amendment or supplement. The parties shall co‑operate in the preparation of any such amendment or supplement as required or appropriate, and Seller shall promptly mail, file or otherwise publicly disseminate, as required or appropriate, any such amendment or supplement to the Seller Shareholders and, if required by law, file the same with the any applicable securities authorities or any other Governmental Authority, as required.

3.                   Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place remotely by email exchange of documents and signatures (or their electronic counterparts) as may be appropriate within three (3) business days following approval of the Seller Shareholder Resolution (the date upon which the Closing takes place referred to herein as the “Closing Date”).  The Closing shall be deemed effective at 12:01 a.m. Mountain Time on the Closing Date, immediately following the execution and consummation of the Contribution Agreement.

4.                   Representations and Warranties of Seller.  Seller represents and warrants to Buyer that the statements contained in this Section 4 are true and correct as of the date hereof.  For purposes of this Section 4, “Seller's knowledge,” “knowledge of Seller,” and any similar phrases shall mean the actual knowledge of any director or officer of Seller, after due and diligent inquiry. For purposes of this Agreement, the term “Disclosure Schedules” means the disclosure schedules delivered by Seller concurrently with the execution and delivery of this Agreement.

4.1               Organization and Authority of Seller.  Seller is a corporation duly organized, validly existing, and in good standing under the Laws of Canada. Seller has full corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out Seller’s obligations hereunder and thereunder, and, subject to approval of the Seller Shareholder Resolution, to consummate the transactions contemplated hereby and thereby. Subject to approval of the Seller Shareholder Resolution, the execution and delivery by Seller of this Agreement and any other 

Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. The Seller Shareholder Resolution is the only vote or consent of the holders of any class or series of Seller’s capital stock necessary to approve and adopt this Agreement and consummate the transactions contemplated hereby. This Agreement and each Transaction Document to which Seller is a party constitute legal, valid, and binding obligations of Seller enforceable against Seller in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other applicable Laws affecting the enforcement of creditors’ rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.

4.2               Organization, Authority, and Qualification of the Company.  The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the state of Idaho and has full corporate power and authority to own, operate, or lease the properties and assets now owned, operated, or leased by it and to carry on its business as it has been and is currently conducted.  Section 4.2 of the Disclosure Schedules sets forth each jurisdiction in which the Company is licensed or qualified to do business, and the Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.

4.3               Capitalization. 

(a)                The authorized shares of the Company consist of 10,000 shares of common stock, of which 100 shares are issued and outstanding and constitute the Shares.  All the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Seller, free and clear of all Encumbrances.  Upon the transfer, assignment, and delivery of the Shares and payment therefor in accordance with the terms of this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances.

(b)               All the Shares were issued in compliance with applicable Laws.  None of the Shares were issued in violation of any agreement or commitment to which Seller or the Company is a party or is subject to or in violation of any preemptive or similar rights of any individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity (each, a “Person”).  For purposes of this Agreement, “Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

(c)                There are no outstanding or authorized options, warrants, convertible securities, stock appreciation, phantom stock, profit participation, or other rights, agreements, or commitments relating to the shares of capital stock of the Company or obligating Seller or the Company to issue or sell any shares of capital stock of, or any other interest in, the Company.  There are no voting trusts, shareholder agreements, proxies, or other agreements in effect with respect to the voting or transfer of any of the Shares.

4.4               No Subsidiaries.  The Company does not have, or have the right to acquire, an ownership interest in any other Person.

4.5               No Conflicts or Consents.  Subject to approval of the Seller Shareholder Resolution, the execution, delivery, and performance by Seller of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or conflict with any provision of the articles of incorporation, bylaws, or other governing documents of Seller or the Company; (b) violate or conflict with any provision of any statute, law, ordinance, regulation, rule, code, treaty, or other requirement of any Governmental Authority (collectively, “Law”) or any order, writ, judgment, injunction, decree, determination, penalty, or award entered by or with any Governmental Authority (“Governmental Order”) applicable to Seller or the Company; (c) require the consent, notice, or filing with or other action by any Person or require any Permit (as defined in Section 4.16(b)), license, or Governmental Order; (d) violate or conflict with, result in the acceleration of, or create in any party the right to accelerate, terminate, or modify any contract, lease, deed, mortgage, license, instrument, note, indenture, joint venture, or any other agreement, commitment, or legally binding arrangement, whether written or oral (collectively, “Contracts”), to which Seller or the Company is a party or by which Seller or the Company is bound or to which any of their respective properties and assets are subject; or (e) result in the creation or imposition of any Encumbrance on any properties or assets of the Company.

4.6               Financial Statements.  True and complete copies of the following financial statements (the “Financial Statements”) have been delivered to Buyer:

(a)                The unaudited balance sheet of the Company as of April 30 in each of the years 2020, 2021, and 2022 (such balance sheet as of April 30, 2022 is referred to herein as the “Balance Sheet” and the date of April 30, 2022 as the “Balance Sheet Date”) and the related statements of income and retained earnings for the years then ended.

The Financial Statements have been prepared in accordance with generally accepted accounting principles in effect in the United States from time to time (“GAAP”), applied on a consistent basis throughout the period involved.  The Financial Statements are based on the books and records of the Company and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated.  The Company maintains a standard system of accounting established and administered in accordance with GAAP.

4.7               Undisclosed Liabilities.  The Company has no liabilities, obligations, or commitments of any nature whatsoever, whether asserted, known, absolute, accrued, matured, or otherwise (collectively, “Liabilities”), except: (a) those which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date; and (b) those which have been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which do not, individually or in the aggregate, exceed $10,000.

4.8               Cancellation of the Company Debt.  The consummation of the Contribution Agreement as of the Closing Date immediately prior to the consummation of this Agreement shall effectively (i) transfer from Seller to the Company all of Seller’s right, title and interest in and to the right to receive payment of the Company Debt, (ii) cancel and forgive in its entirety the Company Debt, and (iii) release the Company from any and all obligations under the Company Loan and with respect to the Company Debt.  As of the Closing Date and after giving effect to the closing of the Contribution Agreement, the Company shall have no debts, liabilities or other obligations of any kind to Seller.

4.9               Absence of Certain Changes, Events, and Conditions.  Since the Balance Sheet Date, there has not been, with respect to the Company, any change, event, condition, or development that is, or could reasonably be expected to be, individually or in the aggregate, materially adverse to the business, results of operations, condition (financial or otherwise), or assets of the Company and the Company has operated its businesses only consistent with the past practices of the Company and has taken action in the ordinary course of the normal day to day operations of the business of the Company.  Since the Balance Sheet Date, the Company has not transferred, assigned, sold or otherwise disposed of any material assets shown or reflected in its Financial Statements or cancelled any material debts or entitlements, has not declared or paid any dividends or declared or made any other payments or distribution on or in respect of any of its shares or authorized, agreed or otherwise become committed to do any of the foregoing.

4.10            Fairness Opinion.  As of the date hereof:

(a)                the Fairness Opinion has been delivered to the Special Committee;

(b)               the Fairness Opinion has been delivered to the Seller Board; and

(c)                the Company has been authorized by the Financial Advisor to permit inclusion of the Fairness Opinion and reference thereto in the Proxy Statement.

4.11            Material Contracts. 

(a)                Section 4.11(a) of the Disclosure Schedules lists each Contract that is material to the Company (such Contracts, together with all Contracts concerning the occupancy, management, or operation of any Real Property (as defined in Section 4.12(a)), being “Material Contracts”), including the following:

(a)                each Contract of the Company involving aggregate consideration to be paid or received by the Company in excess of $10,000 and which, in each case, cannot be cancelled by the Company without penalty or without more than 90 days’ notice;

(b)               all Contracts that provide for the indemnification by the Company of any Person or the assumption of any Tax (as defined in Section 4.20(a)), environmental, or other Liability of any Person;

(c)                all Contracts relating to Intellectual Property (as defined in Section 4.13(a)), including all licenses, sublicenses, settlements, coexistence agreements, covenants not to sue, and permissions;

(d)               except for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company;

(e)               all Contracts that limit or purport to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time;

(f)                 all Contracts relating to any joint venture, partnership, limited liability company or other similar Contract relating to the formation, creation, operation, management, sharing of profit or losses or control of any partnership, strategic alliance or joint venture;

(g)                all Contracts relating to the acquisition or disposition of any assets, business or real property (whether by merger, sale of stock, sale of assets or otherwise) that are material to the Company, taken as a whole, and with respect to which the Company has material obligations remaining to be performed or material liabilities continuing after the date of this Agreement;

(h)               all Contracts with a Governmental Authority or with any other Person that is a subcontract relating to a Contract between such Person and a Governmental Authority;

(i)                  all employment agreements and Contracts with independent contractors or consultants (or similar arrangements) to which the Company is a party; and

(j)                 any other Contract that is material to the Company and not required to be disclosed pursuant to the foregoing clauses (i) through (ix).

(b)               Each Material Contract is valid and binding on the Company in accordance with its terms and is in full force and effect, except as enforceability may be limited by general equitable principles.  None of the Company or, to the best of Seller’s knowledge any other party thereto, is in breach of or default under (or is alleged to be in breach of or default under), any Material Contract.  None of Seller, the Company, or any other party to any Material Contract has provided or received any notice of any intention to terminate any Material Contract.  Complete and correct copies of each Material Contract (including all modifications, amendments, and supplements thereto and waivers thereunder) have been made available to Buyer.

4.12            Real Property; Title to Assets. 

(a)                The Company does not own any real property. Section 4.12(a) of the Disclosure Schedules lists all real property in which the Company has a leasehold (or sub-leasehold) interest (together with all buildings, structures, and improvements located thereon, and all water and water rights, mineral rights, easements and hereditaments appurtenant thereto, the “Real Property”), including each Contract relating to the Company’s leasehold interest in each parcel of Real Property.  Seller has delivered or made available to Buyer true, correct, and complete copies of all Contracts, title insurance policies, and surveys relating to the Real Property.

(b)               The Company has good and valid title to, or a valid leasehold interest in, all Real Property and personal property and other assets reflected in the Financial Statements or acquired after the Balance Sheet Date (other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date).  All Real Property and such personal property and other assets (including leasehold interests) are free and clear of Encumbrances except for those items set forth in Section 4.12(b) of the Disclosure Schedules. Each lease of Real Property is the legal, valid, binding and enforceable obligation of the Company and, to Seller’s knowledge, each other party thereto, and is in full force and effect, and the Company has complied with the terms of each such lease through and including the date of this Agreement.

(c)                Each of the Real Properties is in good standing before all relevant Governmental Authorities with respect to: (i) all obligations to file, register, or deliver any proof(s) of basic mining

forms, mining and environmental bonds, mining permits, reports, responses to any regulatory enquiries or inspections and assessment works or equivalent carried out at or in connection with any Real Properties as required by applicable Laws, (ii) any obligations to pay surface fees royalties, mining duties and/or Taxes as required by applicable Laws, (iii) any requirements under the environmental permits and the Environmental Laws, and (iv) all orders of a Governmental Authority relating to a Real Property. To the knowledge of the Company, there is no outstanding order from any Governmental Authority requiring payment or compliance with any obligation related to any Real Property and the Company has not received any communication in respect thereof.

(d)               To the knowledge of Seller, the Real Properties are sufficient in duration, scope, content and effect to permit the Company to conduct all activities currently contemplated to be conducted by them.

(e)               The Company is not a sublessor or grantor under any sublease or other instrument granting to any other Person any right to possess, lease, occupy, or use any leased Real Property.  The use of the Real Property in the conduct of the Company's business does not violate any Law, covenant, condition, restriction, easement, license, permit, or Contract and no improvements constituting a part of the Real Property encroach on real property owned or leased by a Person other than the Company.

(f)                 No Real Properties or assets of the Company has been taken or appropriated by any Governmental Authority, nor has any notice or proceeding in respect hereof been given or commenced, nor, to the knowledge of Seller, is there any intent or proposal to give any such notice or to commence any such proceeding.

4.13            Intellectual Property. 

(a)                “Intellectual Property” means any and all of the following in any jurisdiction throughout the world: (i) issued patents and patent applications; (ii) trademarks, service marks, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (iii) copyrights, including all applications and registrations; (iv) trade secrets, know-how, inventions (whether or not patentable), technology, and other confidential and proprietary information and all rights therein; (v) internet domain names and social media accounts and pages; and (vi) other intellectual or industrial property and related proprietary rights, interests, and protections.

(b)               Section 4.13(b) of the Disclosure Schedules lists all issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing, that are owned by the Company (the “Company IP Registrations”) as well as all material unregistered Intellectual Property.  The Company owns or has the valid and enforceable right to use all Intellectual Property used or held for use in or necessary for the conduct of the Company’s business as currently conducted (the “Company Intellectual Property”), free and clear of all Encumbrances.  All the Company Intellectual Property is valid and enforceable, and all Company IP Registrations are subsisting and in full force and effect.  The Company has taken all reasonable and necessary steps to maintain and enforce the Company Intellectual Property.

(c)                The conduct of the Company’s business as currently and formerly conducted has not infringed, misappropriated, or otherwise violated the Intellectual Property or other rights of any Person.  To the best of Seller’s knowledge, no Person has infringed, misappropriated, or otherwise violated any Company Intellectual Property.

4.14            Insurance.  Section 4.14 of the Disclosure Schedules sets forth a true and complete list of all current policies or binders of insurance maintained by Seller or the Company relating to the assets, business, operations, employees, officers, or directors of the Company (collectively, the “Insurance Policies”).  Such Insurance Policies: (a) are in full force and effect; (b) are valid and binding in accordance with their terms; (c) are provided by carriers who are financially solvent; and (d) have not been subject to any lapse in coverage.  Neither the Seller nor the Company has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any of such Insurance Policies.  All premiums due on such Insurance Policies have been paid.  Neither the Seller nor the Company is in default under, or has otherwise failed to comply with, in any material respect, any provision contained in any Insurance Policy.  The Insurance Policies are of the type and in the amounts customarily carried by Persons conducting a business similar to the Company and are sufficient for compliance with all applicable Laws and Contracts to which the Company is a party or by which it is bound.   

4.15            Legal Proceedings; Governmental Orders. 

(a)                There are no claims, actions, causes of action, demands, lawsuits, arbitrations, inquiries, audits, notices of violation, proceedings, litigation, citations, summons, subpoenas, or investigations of any nature, whether at law or in equity (collectively, “Actions”) pending or, to Seller's knowledge, threatened against or by the Company, Seller, or any Affiliate of Seller: (i) relating to or affecting the Company or any of the Company's properties or assets; or (ii) that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement.  To the best of Seller’s knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.  For purposes of this Agreement: (x) “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (y) the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

(b)               There are no outstanding Governmental Orders against, relating to, or affecting the Company or any of its properties or assets.

4.16            Compliance with Laws; Permits. 

(a)                The Company has complied, and is now complying, with all Laws applicable to it or its business, properties, or assets.

(b)               All permits, licenses, franchises, approvals, registrations, certificates, variances, and similar rights obtained, or required to be obtained, from Governmental Authorities (collectively, “Permits”) that are required for the Company to conduct its business as it has been or is currently conducted, including, without limitation, leasing or operating any of the Real Property as it has been or is currently operated by the Company, have been obtained and are valid and in full force and effect.  Section 4.16(b) of the Disclosure Schedules list all current Permits issued to the Company and no event has occurred that would reasonably be expected to result in the revocation or lapse of any such Permit.

4.17            Environmental Matters. 

(a)                The Company has complied, and is now complying, with all applicable Environmental Laws.  Neither the Company nor Seller has received notice from any Person that the Company, its business or assets, or any real property currently or formerly owned, leased, or used by the Company is or may be in violation of any applicable Environmental Law or any applicable Law regarding Hazardous Substances.

(b)               There has not been any spill, leak, discharge, injection, escape, leaching, dumping, disposal, or release by Seller, the Company or any Affiliate of Seller of any kind of any Hazardous Substances in violation of any Environmental Law: (i) with respect to the business or assets of the Company; or (ii) at, from, in, adjacent to, or on any real property currently or formerly owned, leased, or used by the Company. There are no, and have not been, any Hazardous Substances unlawfully in, on, or about any real property currently or formerly owned, leased, or used by the Company, during the period that the Company owned, leased or used the real property or, to Seller’s knowledge, during any period prior thereto. No real property owned, lease or used by the Company is or was materially affected in any way by any Hazardous Substances during the period it was owned, leased or used by the Company or, to Seller’s knowledge, during any period prior thereto. To Seller’s knowledge, there are no Hazardous Substances migrating to any real property currently or formerly owned, leased, or used by the Company.  Schedule 4.17(b) sets forth the Operations and Reclamations Plan of the Company.

(c)                As used in this Agreement: (i) “Environmental Laws” means all Laws, now or hereafter in effect, in each case as amended or supplemented from time to time, relating to the regulation and protection of human health, safety, the environment, and natural resources, including any federal, state, or local transfer of ownership notification or approval statutes; and (ii) “Hazardous Substances” means: (A) “hazardous materials,” “hazardous wastes,” “hazardous substances,” “industrial wastes,” or “toxic pollutants,” as such terms are defined under any Environmental Laws; (B) any other hazardous or radioactive substance, contaminant, or waste; and (C) any other substance with respect to which any Environmental Law or Governmental Authority requires environmental investigation, regulation, monitoring, or remediation.

4.18            Employee Benefit Matters. 

(a)                Except as set forth in Section 4.18(a) of the Disclosure Schedules, the Company has not established, maintained, sponsored, or contributed to any “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (as amended, and including the regulations thereunder, “ERISA”), whether or not written and whether or not subject to ERISA, nor any supplemental retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, equity, change in control, retention, severance, salary continuation, or other similar agreement, plan, policy, program, practice, or arrangement (each, a “Benefit Plan”).

(b)               The Company has not incurred, and does not reasonably expect to incur: (i) any Liability under Title I or Title IV of ERISA, any related provisions of the Code, or applicable Law relating to any Benefit Plan; or (ii) any Liability to the Pension Benefit Guaranty Corporation. 

(c)                Neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will, either alone or in combination with any other event: (i) entitle any current or former director, officer, employee, independent contractor, or consultant of the Company to any severance pay, increase in severance pay, or other payment, except for those payments that have or 

will be disclosed to Buyer; (ii) accelerate the time of payment, funding, or vesting, or increase the amount of compensation (including stock-based compensation) due to any such individual; (iii) limit or restrict the right of the Company to amend or terminate any Benefit Plan; (iv) increase the amount payable under any Benefit Plan; (v) result in any “excess parachute payments” within the meaning of Section 280G(b) of the Code; or (vi) require a “gross-up” or other payment to any “disqualified individual” within the meaning of Section 280G(c) of the Code.

4.19            Employment Matters. 

(a)                Section 4.19(a) of the Disclosure Schedules lists: (i) all employees, independent contractors, and consultants of the Company; and (ii) for each individual described in clause (i), (A) the individual's title or position, hire date, and compensation, (B) any Contracts entered into between the Company and such individual, and (C) all fringe benefits provided to each such individual.  All compensation payable to all employees, independent contractors, or consultants of the Company for services performed on or prior to the date hereof have been paid in full.

(b)               The Company is not, and has not been, a party to or bound by any collective bargaining agreement or other Contract with a union or similar labor organization (collectively, “Union”), and no Union has represented or purported to represent any employee of the Company.  There has never been, nor has there been any threat of, any strike, work stoppage, slowdown, picketing, or other similar labor disruption or dispute affecting the Company or any of its employees.

(c)                The Company is and has been in compliance with: (i) all applicable employment Laws and agreements regarding hiring, employment, termination of employment, plant closings and mass layoffs, employment discrimination, harassment, retaliation, and reasonable accommodation, leaves of absence, terms and conditions of employment, wages and hours of work, employee classification, employee health and safety, engagement and classification of independent contractors, payroll taxes, and immigration with respect to all employees, independent contractors, and contingent workers; and (ii) all applicable Laws relating to the relations between it and any labor organization, trade union, work council, or other body representing employees of the Company.

4.20            Taxes. 

(a)                Except as set forth in Schedule 4.20(a), all returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund) (collectively, “Tax Returns”) required to be filed by the Company on or before the Closing Date have been timely filed.  Except as set forth in Schedule 4.20(a), such Tax Returns are true, correct, and complete in all respects.  All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been timely paid.  No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company.  Seller has delivered to Buyer copies of all Tax Returns and examination reports of the Company and statements of deficiencies assessed against, or agreed to by, the Company for all Tax periods ending on or after December 31, 2017.  The term “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto. 

(b)               The Company has no Liability for Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local, or foreign Law), as transferee or successor, by contract, or otherwise.

(c)                There are no liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.

4.21            Books and Records. All the minute books and share records and transfer books of the Company are correct and complete, are currently maintained in accordance with applicable Laws and have been made available to Buyer. 

4.22            Anti-Money Laundering. The activities of the Company are and have been conducted at all times in compliance with the anti-money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency to which they are subject (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any Governmental Authority or any arbitrator involving the Company with respect to the Anti-Money Laundering Laws is, to the knowledge of Seller, pending or threatened.

4.23            Foreign Corrupt Practices. With respect to the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) or the Corruption of Foreign Public Officials Act (Canada) (the “CFPOA”):