Elmet 8-K确认3500万加元入股Blue Moon交易已交割，并列批准员工购股计划

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 16, 2026
The Elmet Group Co.
(Exact name of registrant as specified in its charter)
Delaware
001-43245
33-1881598
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
280 Fore Street
,
Suite 301
Portland
,
Maine
04101
(Address of principal executive offices, including
zip code)
Registrant’s telephone number, including
area code:
(
207
)
518-6791
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
ELMT
The
Nasdaq
Stock Market LLC
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☒
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed in The Elmet Group Co.’s
(the “Company”) Current Report on Form 8-K filed with the SEC on September 14, 2026, the Company entered into a binding letter
agreement with Blue Moon Metals Inc., a company existing under the laws of British Columbia, Canada (“Blue Moon”), Blue Moon
(Springer) Inc., a company organized under the laws of the State of Delaware and an affiliate of Blue Moon (“BM US”), and
EQ Resources Limited, a company organized under the laws of Victoria, Australia (together with the Company, Blue Moon, and BM US, the
“Parties”), regarding a series of strategic transactions associated with Blue Moon’s Springer Tungsten Complex (“Springer”),
located in Pershing County, Nevada. Among the transactions contemplated by the Parties was an equity investment by the Company into Blue
Moon and the Company’s receipt of board representation on Blue Moon’s board of directors (the “Blue Moon Board”).
Purchase Agreement
On October 16, 2026, the Company entered into
a subscription agreement with Blue Moon (the “Purchase Agreement”), pursuant to which Blue Moon agreed to issue and sell,
and the Company agreed to purchase, newly issued equity in Blue Moon comprised of 3,500,000 units (the “Units”) in a private
placement transaction, with each Unit comprised of one common share of Blue Moon (“BM Share”) and one BM Share purchase warrant
(“BM Warrant”) at a price per unit of CAD 10.00 (the “BM Investment”). As part of the BM Investment, the Company
and Blue Moon also entered into an Investor Rights Agreement (as defined below).
The Purchase Agreement contains certain representations,
warranties and covenants of each of the Company and Blue Moon, including covenants by Blue Moon related to the use of proceeds in connection
with the development of Springer and with respect to Material Properties and Mining Rights (as defined in the Purchase Agreement). The
closing of the BM Investment occurred on October 16, 2026. Pursuant to applicable U.S. and Canadian securities laws, the BM Shares, the
BM Warrants and the BM Shares issuable upon exercise of the BM Warrants will be subject to certain restrictions on transfer, including,
but not limited to, a prohibition on sales, transfers and trades in Canada or for the benefit of a Canadian resident until February 17,
2027, four months from the date of the issuance of the Units.
Blue Moon Warrant
On October 16, 2026, pursuant to the Purchase Agreement, Blue Moon
issued 3,500,000 BM Warrants to the Company, with each BM Warrant exercisable for one BM Share. The BM Warrants are exercisable by the
Company at any time and from time to time, after February 17, 2027, the date that is four (4) months after the issuance of the BM Warrants,
at an initial exercise price of CAD 10.80 per BM Share, and expire thirty-six (36) months after the date of issuance, or October 16, 2029.
The number of BM Shares issuable upon exercise of the BM Warrants is subject to customary adjustment in connection with certain transactions,
including payments of stock dividends on the BM Shares, share splits and combinations of BM Shares.
The BM Warrants may also be exercisable on a net
exercise “cashless” basis and in lieu of making the cash payment otherwise contemplated to be made to Blue Moon upon such
exercise in payment of the aggregate exercise price, the Company may elect instead to receive upon such exercise (either in whole or in
part), the net number of shares of BM Shares determined according to a formula set forth in the BM Warrant. Any portion of the BM Warrants
that remains unexercised upon their expiration shall be automatically exercised by means of a “cashless” exercise as set forth
in the BM Warrant.
No fractional BM Shares are to be issued upon
the exercise of the BM Warrant and no cash payment or other compensation will be paid in lieu of a fractional share.
1
Investor Rights Agreement
On October 16, 2026, as required by the Purchase
Agreement, the Company also entered into an investor rights agreement (the “Investor Rights Agreement”) with Blue Moon.
The Investor Rights Agreement provides, among other things, that Blue
Moon will provide the Company with participation rights (the “Participation Right”) in the event Blue Moon issues any equity,
voting or convertible securities (an “Offering”). Pursuant to the Participation Right, the Company will be granted the opportunity
to participate in an Offering on substantially the same terms and conditions as well as purchase price offered to potential subscribers,
subject to certain ownership limitations. The Participation Right will be held by the Company for so long as the Company holds at least
forty percent (40%) of the equity it purchased in the BM Investment (the “Ownership Condition”).
Additionally, the Investor Rights Agreement provides
the Company with a “Top-Up Right,” in connection with the issuance of BM Shares on the conversion, exercise or exchange of
convertible securities or pursuant to any other contract, agreement or understanding that provides for the issuance of BM Shares, excluding
contracts and agreements pursuant to which the Company has the right to exercise its Participation Right (a “Dilutive Issuance”).
Should Dilutive Issuances occur that result in an aggregate reduction of the Company’s ownership percentage of Blue Moon of at least
1.0%, the Company will be provided an opportunity to purchase additional BM Shares to restore the Company’s ownership percentage
it would have had but for such Dilutive Issuances, adjusted for any non-exercise or deferral of the Company’s Participation Right.
The purchase price of any BM Shares offered to the Company pursuant to the Top-Up Right will equal the volume-weighted average trading
price of BM Shares on the TSX Venture Exchange or other exchange on which the BM Shares are listed for trading for the five (5) trading
days prior to the date on which Blue Moon delivers a Top-up Notice (as defined in the Investor Rights Agreement) to the Company.
Furthermore, the Company has the right to designate
a nominee to serve on the Blue Moon Board. Blue Moon has agreed to take all necessary steps to appoint the Company’s initial nominee
within ten (10) days of the date of the Investor Rights Agreement. The Company will maintain the right to designate a nominee to the Blue
Moon Board at any meeting of Blue Moon Shareholders, and the Company’s nominee will be reasonably considered for inclusion on one
or more of the committees of the Blue Moon Board, for so long as the Ownership Condition is met. Finally, should the Company’s nominee
resign, fail to be elected or if the seat is otherwise vacant, the Company will be entitled to appoint a non-voting board observer.
The foregoing descriptions of the Purchase Agreement,
Investor Rights Agreement and BM Warrant, and the transactions contemplated thereby, are only summaries and do not purport to be complete
and are qualified in their entirety by reference to the full text of the relevant agreements, copies of which are attached to this Current
Report on Form 8-K as Exhibits 10.1-10.3, respectively, and which are incorporated herein by reference. The Purchase Agreement and Investor
Rights Agreement contain representations, warranties and covenants that the respective parties made to each other as of the date of such
agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of
the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection
with negotiating such agreement. Investors are not third-party beneficiaries under the Purchase Agreement or Investor Rights Agreement
and 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 parties thereto or any of their respective affiliates.
2
Item 5.07 Submission of Matters to a Vote of
Security Holders.
The Company held a Special Meeting of Stockholders
(the “Special Meeting”) on October 19, 2026. On August 28, 2026, the record date for the Special Meeting, there were 30,459,498
shares of the Company’s common stock issued and outstanding with each such share being entitled to one vote.
A total of 24,508,895 shares of the Company’s
common stock were represented in person or by proxy at the Special Meeting. The number of votes cast for or against, as well as abstentions
and broker non-votes, as applicable, with respect to the matter voted upon is set forth below.
Proposal 1: Approval of The Elmet Group
Co. 2026 Employee Stock Purchase Plan
The stockholders approved
the adoption of The Elmet Group Co. 2026 Employee Stock Purchase Plan.
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
23,300,321
1,198,918
9,656
N/A
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are
being filed herewith:
Exhibit No.
Description
10.1#+
Subscription Agreement, dated October 16, 2026, by and between The
Elmet Group Co. and Blue Moon Metals Inc.
10.2+
Investor Rights Agreement, dated October 16, 2026, by and between The Elmet Group Co. and Blue Moon Metals Inc.
10.3+
Blue Moon Common Share Purchase Warrant.
10.4
The Elmet Group Co. 2026 Employee Stock Purchase Plan
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
+
Certain portions of this exhibit (indicated by “[*]”) have been omitted pursuant to Item 601(a)(6) of Regulation S-K.
#
Certain annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.
3
SIGNATURE
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 hereunto
duly authorized.
Dated: October 21, 2026
The Elmet Group Co.
By:
/s/ Peter V. Anania
Name:
Peter V. Anania
Title:
Chief Executive Officer and Chairman
4

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EX-10.1
2
ea030911401ex10-1.htm
SUBSCRIPTION AGREEMENT, DATED OCTOBER 16, 2026, BY AND BETWEEN THE ELMET GROUP CO. AND BLUE MOON METALS INC
Exhibit 10.1
UNITED STATES
BLUE MOON METALS INC.
(THE “COMPANY”)
SUBSCRIPTION AGREEMENT
(PRIVATE PLACEMENT OFFERING OF UNITS)
THE UNITS BEING
OFFERED FOR SALE MAY BE PURCHASED BY RESIDENTS OF THE UNITED STATES PURSUANT TO AVAILABLE EXEMPTIONS UNDER APPLICABLE SECURITIES LEGISLATION
INSTRUCTIONS TO SUBSCRIBERS
1.
Read
this Subscription Agreement.
2.
Complete
and sign pages (iii) to (vii) of this Subscription Agreement, being the section entitled “
Subscription and Subscriber Information
”
comprised of Part I: Subscriber Information, Part II: Registration Instructions and Part III: Private Placement Questionnaire.
3.
Complete
and sign the United States Accredited Investor Certificate attached hereto as Schedule “A”.
4.
If applicable, complete and sign the TSX Venture Exchange Form 4C, Corporate Placee Registration Form attached hereto as Schedule “B”.
PAYMENT AND DELIVERY INSTRUCTIONS
Delivery of Subscription Agreement and
Payment of Purchase Price:
A completed and fully executed copy of this Subscription
Agreement (as defined herein), including the items required to be completed as set out above, must be received by no later than 4:00pm
(Toronto time) on October 14, 2026, at the offices of Bennett Jones LLP, 3400 One First Canadian Place, Toronto, ON M5X 1A4, Attention:
[*], or at such other times, dates or places as the Company may determine. The Purchase Price
(as defined herein) must be paid to the Company, by wire transfer, or in such other manner as may be provided for by the Company, in Canadian
dollars, at or prior to the Closing Time (as defined herein).
Delivery of Securities
:
On the Closing Date (as defined herein), the Subscriber
(as defined herein) will receive a physical certificate or direct registration statement representing the Unit Shares (as defined herein)
purchased hereunder and a physical certificate representing the Unit Warrants (as defined herein).
SUBSCRIPTION AGREEMENT FOR UNITS
TO:
BLUE MOON METALS INC.
(the
“
Company
” or “
Blue Moon
”)
The undersigned, on its own behalf, and,
if applicable, on behalf of those for whom the undersigned is contracting hereunder, hereby irrevocably subscribes for and agrees to purchase
from the Company that number of units (each, a “
Unit
”) of the Company set forth below (the “
Purchased Securities
”)
at a price of C$10.00 per Unit (the “
Subscription Price
”), on the terms and conditions set out herein. Each Unit will
be comprised of one common share of the Company (each, a “
Unit Share
”) and one common share purchase warrant of the
Company (each whole common share purchase warrant, a “
Unit Warrant
”), with each Unit Warrant entitling the holder thereof
to purchase one common share of the Company (each, a “
Unit Warrant Share
”) at a price of $10.80 per Warrant Share for
a period of 36 months following the Closing Date. The aggregate Subscription Price (the “
Purchase Price
”) of the Units
subscribed for by the Subscriber hereby shall be an amount equal to the number of Units multiplied by the Subscription Price per Units.
This subscription agreement, which for
greater certainty includes and incorporates the attached schedules, as applicable, is referred to herein as this “
Subscription
Agreement
”.
The Units are available upon and subject
to the terms and conditions set forth herein, including the terms, representations, warranties, covenants and acknowledgements herein
and in the schedules attached hereto. References to “C$” or “$” refer to Canadian dollars and references to “US$”
refer to United States dollars.
A completed and fully executed copy of this Subscription Agreement, including the items required to
be completed as set out above, must be received by no later than 4:00pm (Toronto time) on October 14, 2026, at the offices of 3400 One
First Canadian Place, Toronto, ON M5X 1A4, Attention: [*], or at such other times, dates or places
as the Company may determine. The Purchase Price must be paid to the Company, by wire transfer, or in such other manner as may be provided
for by the Company, in Canadian dollars, at or prior to the Closing Time.
i
SUBSCRIPTION AND SUBSCRIBER INFORMATION
Please print all information (other than signatures),
as applicable, in the space provided below.
Be sure to complete Part I, Part II
and Part III.
Part I: Subscriber
Information
Subscriber Information and Signature
The Elmet Group Co.
Number of Units:
3,500,000 x $10.00
(Name of Subscriber)
Aggregate Subscription Price:
$35,000,000
Account Reference (If applicable):
(the “
Purchase Price
”)
By:
Authorized Signature
Chief Executive Officer
(Official Capacity or Title – if the Subscriber is not an individual)
If the Subscriber is signing as agent or trustee for a principal (a “Disclosed Beneficial Purchaser”) and is not purchasing as trustee or agent for accounts fully managed by it, so as to be deemed to be purchasing as principal pursuant to NI 45-106 (as defined herein), complete the following:
Peter V. Anania
(Name of individual whose signature appears above if different than the name of the Subscriber printed above)
280 Fore Street, Suite 301, Portland, ME 04101
(Subscriber’s Residential Address, including City, Province and Postal Code)
(Name of Disclosed Beneficial Purchaser)
(Disclosed Beneficial Purchaser’s Residential Address, including City, Province and Postal Code)
[*]                             [*]
(Subscriber’s Telephone Number)
(Email Address)
(Telephone Number of Disclosed Beneficial Purchaser)
(Account Reference, if applicable)
ii
Part II: Registration
Instructions
The Subscriber hereby provides the
following registration instructions in connection with the electronic settlement, or, if applicable, the following registration and delivery
instructions in connection with the physical settlement, of the Units being purchased hereunder.
If the Subscriber does not complete
the following registration and delivery instructions, the Subscriber agrees that the Units will be registered and delivered, as applicable,
using the Subscriber’s name and address set out on the fourth page of this Subscription Agreement.
Evidence of Ownership of Units
The Subscriber elects to receive
(check one box)
:
☐
X DRS statement(s) representing the Unit Shares; or
☐
Physical certificate(s) representing the Unit Shares.
The Subscriber acknowledges and agrees that the Subscriber will receive a physical certificate representing the Unit Warrants.
Account Registration Information
: The interest in the certificate(s) or DRS statement(s) representing the Unit Shares and Unit Warrants, as applicable, should be registered as follows:
Delivery Instructions
: Please deliver the certificate(s) or DRS statement(s) representing the Unit Shares and Unit Warrants, as applicable, to:
The Elmet Group Co.
[*]
DTC Number: [*]
Account Name: [*]
Account Number: [*]
(Name)
(Name)
(Account Reference, if applicable)
(Account Reference, if applicable)
280 Fore Street, Suite 301
280 Fore Street, Suite 301
Portland, ME 04101
Portland, ME 04101
(Address, including Postal Code)
(Address, including postal code)
[*]      [*]
(Contact Name)
(Telephone Number)
It is anticipated that the Unit
Shares and Unit Warrants comprising the Units purchased hereunder, as applicable, will be settled via physical certificate(s) or DRS statement(s)
as soon as reasonably practicable following the Closing Date (as defined herein). In such case, the Subscriber will not be entitled to
settle by electronic deposit with CDS (as defined herein) or DTC (as defined herein) through the book-based system administered thereby.
iii
Part III: Private
Placement Questionnaire
In connection with the proposed purchase
of Units, the Subscriber confirms on its own behalf and on behalf of any Disclosed Beneficial Purchaser, the accuracy of the following
statements in respect of it and each Disclosed Beneficial Purchaser, if any:
A.
Corporate Placee Registration Form
The Subscriber either
[check appropriate box]
:
☐
is not required to file
with the TSX Venture Exchange a Form 4C –
Corporate Placee Registration Form
because (i) the Subscriber is an individual, or (ii) the Subscriber is not an individual but (A) is not a member of the “Pro Group” (as described below), (B) is not (or will not be after the completion of the Subscription (as defined below)) an “Insider” (as described below) of the Company, or (C) will not be a holder of more than 5% of the listed shares of the Company after the completion of the Subscription;
☐
has previously filed
with the TSX Venture Exchange a Form 4C –
Corporate Placee Registration Form
, and represents and warrants that there has been no change to any of the information in the Form 4C – Corporate Placee Registration Form previously filed by the Subscriber with the TSX Venture Exchange up to the date hereof; or
☒
hereby delivers
a completed Form 4C –
Corporate Placee Registration Form
, in the form attached as Schedule “B” to the Company for filing with the TSX Venture Exchange, as (i) the Subscriber has not previously filed with the TSX Venture Exchange a Form 4C –
Corporate Placee Registration Form
, or (ii) there has been a change to the information in the Form 4C –
Corporate Placee Registration Form
previously filed by the Subscriber with the TSX Venture Exchange, and (iii) the Subscriber is not an individual and (A) is a member of the “Pro Group” (as described below), or (B) is (or will be after completion of the Subscription) an “Insider” (as described below), or (C) will be a holder of more than 5% of the listed shares after completion of the Subscription.
B.
Present Ownership of Securities
The Subscriber either
[check appropriate box]
:
☒
does not own
directly or indirectly, or exercise control or direction over, any common shares of the Company or securities convertible into common shares of the Company; or
☐
owns
directly or indirectly, or exercises control or direction over, _________________________ outstanding common shares of the Company and convertible securities entitling the Subscriber to acquire additional common shares of the Company which, if converted, in the aggregate would represent _________________________ common shares of the Company.
C.
Insider Status
The Subscriber either
[check appropriate box]
:
☒
is not
an “Insider” (as defined in the policies of the TSX Venture Exchange and the
Securities Act
(Ontario)) of the Company; or
is
an “Insider” (as defined in the policies of the TSX Venture Exchange and the
Securities Act
(Ontario)) of the Company, by virtue of being:
(a)
a director or senior officer of the Company;
(b)
a director or senior officer of a Corporation that is itself an Insider or subsidiary of the Company;
iv
(c)
a person that beneficially owns or controls, directly or indirectly, voting shares of the Company carrying more than 10% of the voting rights attached to all the Company’s outstanding voting shares; or
(d)
the Company itself if it holds any of its own securities.
D.
Member of “Pro Group”
The Subscriber either
[check appropriate box]
:
☒
is not
a member of the Pro Group; or
☐
is
a member of the “Pro Group” (as defined in the policies of the TSX Venture Exchange), which, subject to subparagraphs (A), (B) and (C), shall include, either individually or as a group:
(1)
the member (i.e., a member of the TSX Venture Exchange under TSX Venture Exchange requirements);
(2)
employees of the member;
(3)
partners, officers or directors of the member;
(4)
affiliates of the member; and
(5)
associates of any parties referred to in subparagraphs (1) through (4).
(A)
The TSX Venture Exchange may, in its discretion, include a person or party in the Pro Group for the purposes of a particular calculation where the TSX Venture Exchange determines that the person is not acting at arm’s length to the member;
(B)
The TSX Venture Exchange may, in its discretion, exclude a person from the Pro Group for the purposes of a particular calculation where the TSX Venture Exchange determines that the person is acting at arm’s length to the member;
(C)
The TSX Venture Exchange may deem a person who would otherwise be included in the Pro Group pursuant to subparagraph (1) to be excluded from the Pro Group where the member determines that:
(a)
the person is an affiliate or associate of the member acting at arm’s length to the member;
(b)
the associate or affiliate has a separate corporate and reporting structure;
(c)
there are sufficient controls on information flowing between the member and the associate or affiliate; and
(d)
the member maintains a list of such excluded persons.
E.
“Registrant” Status
The Subscriber either
[check appropriate box]
:
☒
is not
a Registrant; or
☐
is a “Registrant”, defined as a person registered or required
to be registered under the
Securities Act
(Ontario), including a dealer, adviser or investment fund manager.
[Subscriber signature page follows.]
v
The representations and warranties
contained herein are true and accurate as of the date of this certificate and will be true and accurate as of the Closing Date as set
out in this Subscription Agreement. If any such representation or warranty shall not be true and accurate prior to Closing Date, the undersigned
shall give immediate written notice of such fact to the Company.
Dated: October 16, 2026
Signed:
/s/ Peter V. Anania
The Elmet Group Co.
Print Name of Subscriber
Peter V. Anania, Chief Executive Officer
If Subscriber is not an Individual, print Name and Title of Authorized Signing Officer
vi
Acceptance by the Company:
The Company hereby accepts the subscription set forth above
on the terms and conditions set out in this Subscription Agreement. DATED this
16
th
day of
October
, 2026.
BLUE MOON METALS INC.
By:
X /s/ Christian Kargl-Simard
Authorized Signing Officer
vii
TERMS AND CONDITIONS OF SUBSCRIPTION FOR
THE UNITS
1.
Subscription
Any capitalized term or terms used but
not otherwise defined in this Subscription Agreement shall have the respective meanings ascribed to such term or terms in Section 2.
This Subscription Agreement is to confirm
your agreement to purchase from the Company, subject to the terms and conditions set forth herein, that number of Units set out next to
your name on the execution pages hereof at the Subscription Price. By signing the page (vii) of this Subscription Agreement, you acknowledge
(on your own behalf and, if applicable, on behalf of each Disclosed Beneficial Purchaser on whose behalf you are acting) all of the matters
set forth below.
On the Closing Date, the Company shall
issue the Unit Shares and Unit Warrants to the Subscriber at the Closing.
2.
Definitions
Definitions
: In this Subscription Agreement:
(a)
“
Act
” means the
Securities Act
(Ontario);
(b)
“
Agreement
” means this subscription agreement as the same may be amended, supplemented or restated from time to
time and includes the schedules and appendices attached hereto;
(c)
“
Blue Moon Technical Report
” means the report titled “NI 43-101 Technical Report for the Preliminary Economic
Assessment of the Blue Moon Mine, Mariposa County, California”, dated April 15, 2025 (as amended and restated on September 12, 2025),
with an effective date of March 3, 2025, as amended, prepared for the Company by Scott Wilson, C.P.G., SME-RM; Peter Szkilnyk, P. Eng.;
Alan J. San Martin, P. Eng.; Richard Gowans, P. Eng.; Justin Taylor, P. Eng., and Christopher Jacobs, C. Eng., MIMMM;
(d)
“
Business Day
” means a day on which banks are open for the transaction of regular business in Vancouver, British
Columbia or Toronto, Ontario;
(e)
“
Canadian Securities Laws
” means, collectively, the securities laws and regulations in each of the provinces and
territories of Canada, together with all written instruments, rules and orders having the force of law of the securities regulators or
regulatory authorities in each of the provinces and territories of Canada;
(f)
“
CDS
” means CDS Clearing and Depository Services Inc.;
(g)
“
Closing
” means the completion of the issue and sale by the Company and the purchase by the Subscriber of the Units
pursuant to the provisions of this Subscription Agreement;
(h)
“
Closing Date
” means the date on which the Closing takes place, being on or about October 14, 2026, or such other
date as the Company and the Subscriber may agree;
(i)
“
Closing Time
” means 4:00pm (Toronto time) on the Closing Date, or such other time as the Company and the Subscriber
may agree;
(j)
“
Common Shares
” means the common shares of the Company as constituted on the date hereof;
(k)
“
Company
” or “
Blue Moon
” means Blue Moon Metals Inc., a company incorporated under the laws
of British Columbia, Canada;
(l)
“
Control Person
” has the meaning set forth in section 1(1) of the Act;
1
(m)
“
Disclosed Beneficial Purchaser
” has the meaning ascribed to such term on page (iii) hereof;
(n)
“
Dollar
”, “
$
” or “
C$
” means a dollar of lawful money of Canada;
(o)
“
DTC
” means The Depository Trust Company;
(p)
“
Elmet Proceeds
” has the meaning ascribed to such term in Section 8(r);
(q)
“
Financial Statements
” means, collectively: (i) the Company’s audited consolidated financial statements for
the years ended December 31, 2025 and 2024; and (ii) the unaudited condensed interim consolidated financial statements for the three and
six months ended June 30, 2026 and 2025;
(r)
“
Governmental Authority
” means and includes, without limitation, any national or federal government, province,
state, municipality or other political subdivision of any of the foregoing, any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government and any corporation or other entity owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing, and any governmental department, commission, board, bureau, agency or instrumentality,
including the Securities Regulators and the TSXV;
(s)
“
including
” means including, without limitation, and “include” and “includes” each have
a corresponding meaning;
(t)
“
Indemnitee
” has the meaning ascribed to such term in Section 9(c) hereof;
(u)
“
Indemnitor
” has the meaning ascribed to such term in Section 9(c) hereof;
(v)
“
Investor Rights Agreement
” means the investor rights agreement, substantially in the form set out in Schedule
“C” hereto, to be entered into between the Company and the Subscriber on the Closing Date, subject to the approval of and
any changes required by the TSXV obtained prior to the Closing Date and provided any such changes are mutually agreed by the Company and
the Subscriber, each acting reasonably;
(w)
“
Lien
” means any interest (including any security interest), pledge, mortgage, lien, encumbrance, charge, claim
or other right of third parties, whether created by law or in equity, including any such restriction on the use, voting, transfer, receipt
of income or other exercise of any attributes of ownership;
(x)
“
Loss
” has the meaning ascribed to such term in Section 9(b) hereof;
(y)
“
Material Adverse Effect
” means any event, change, fact, or state of being that would reasonably be expected to
have a significant and adverse effect on the business, affairs, capital, operation, properties, permits, assets, liabilities (absolute,
accrued, contingent or otherwise) or condition (financial or otherwise) of the Company and any subsidiary considered on a consolidated
basis;
(z)
“
Material Permits
” means all material permits, certificates, licences, approvals, consents, registrations and other
authorizations of the Company and its subsidiaries;
(aa)
“
Material Properties
” means collectively: (i) the Company’s Nussir copper-gold-silver project in Finnamrk,
Norway; (ii) the Company’s Blue Moon zinc-gold-silver-copper project in Mariposa, California; and (iii) the Company’s Springer
tungsten-molybdenum project in Pershing County, Nevada, each as described in the Public Disclosure Documents;
(bb)
“
Material Subsidiaries
” means collectively: (i) Blue Moon Norway AS; (ii) Nussir ASA; (iii) Blue Moon Metals (US)
Inc.; (iv) Keystone Mines Inc.; and (v) Blue Moon (Springer) Inc.;
(cc)
“
Mining Rights
” means all rights, whether contractual or otherwise, for the exploration for or exploitation of
mineral resources and reserves together with surface rights, Water Rights, royalty interests, fee interests, joint venture interests and
other leases, rights of way and enurements related to any such rights, in respect of the Material Properties;
2
(dd)
“
NI 43-101
” means National Instrument 43-101 –
Standards of Disclosure for Mineral Projects
;
(ee)
“
NI 45-106
” means National Instrument 45-106 –
Prospectus Exemptions
;
(ff)
“
Nussir Technical Report
” means the report titled “NI 43-101 Technical Report on the Feasibility Study of
the Nussir Project” with an effective date of April 14, 2026 prepared for the Company by Chris Hughes-Narborough C Eng, MIMMM; Martin
Prior M Eng, FSAIMM, Roy Levesque, P. Eng; Lumin Ma, Susan Abell SACNASP; and Adam Wheeler C. Eng, Eur Ing., FIMMM;
(gg)
“
Person
” includes: an individual; a corporation; a partnership, trust, fund and an association, syndicate, organization
or other organized group of persons, whether incorporated or not; and an individual or other person in that person’s capacity as
a trustee, executor, administrator or personal or other legal representative;
(hh)
“
Public Disclosure Documents
” means, collectively, all of the documents which have been filed on SEDAR+ by or on
behalf of the Company during the three-year period prior to the Closing Date with the relevant Securities Regulators pursuant to the requirements
of Canadian Securities Laws;
(ii)
“
Purchase Price
” has the meaning ascribed to such term on page (ii) hereof;
(jj)
“
Purchased Securities
” has the meaning ascribed to such term on page (ii) hereof;
(kk)
“
Regulation D
” means Regulation D under the U.S. Securities Act;
(ll)
“
Regulation S
” means Regulation S under the U.S. Securities Act;
(mm)
“
Securities Laws
” means, collectively, Canadian Securities Laws and U.S. Securities Laws;
(nn)
“
Securities Regulator
” means, in respect of any jurisdiction, the securities regulator or other securities regulatory
authority of that jurisdiction;
(oo)
“
SEDAR
+” means the System for Electronic Data Analysis and Retrieval of the Canadian Securities Administrators;
(pp)
“
Springer Project
” means the Company’s Springer tungsten-molybdenum project in Pershing County, Nevada;
(qq)
“
Subscriber
” or “
You
” means the Person purchasing the Units and whose name appears on page (iii)
hereof and who has signed this Subscription Agreement or, if the Person whose name appears on page (iii) hereof has signed this Subscription
Agreement as agent for, or on behalf of, a Disclosed Beneficial Purchaser and is not a trust company, trust corporation or portfolio manager
deemed to be purchasing the Units as principal under NI 45-106, the Person who is the Disclosed Beneficial Purchaser of the Units as disclosed
on page (iii) hereof;
(rr)
“
Subscriber Indemnified Parties
” has the meaning ascribed to such term in Section 9(b) hereof;
(ss)
“
Subscription
” means the subscription of Units by the Subscriber in the terms and conditions set forth herein;
(tt)
“
Subscription Price
” means C$10.00 per Unit;
(uu)
“
Technical Reports
” means the Blue Moon Technical Report and the Nussir Technical Report;
(vv)
“
TSXV
” means the TSX Venture Exchange;
(ww)
“
Underlying Securities
” means the Unit Shares, the Unit Warrants and the Unit Warrant Shares;
3
(xx)
“
United States
” means the United States, its territories and possessions, any state of the United States and the
District of Columbia;
(yy)
“
Unit Share
” has the meaning ascribed to such term on page (ii) hereof;
(zz)
“
Unit Warrant
” has the meaning ascribed to such term on page (ii) hereof;
(aaa)
“
Unit Warrant Share
” has the meaning ascribed to such term on page (ii) hereof;
(bbb)
“
Units
” has the meaning ascribed to such term on page (ii) hereof;
(ccc)
“
US$
” means a dollar of lawful money of the United States;
(ddd)
“
U.S. Accredited Investor
” means an “
accredited investor
” as defined in Rule 501(a) of Regulation
D;
(eee)
“
U.S. Securities Act
” means the United States Securities Act of 1933, as amended;
(fff)
“
U.S. Securities Laws
” means the U.S. Securities Act, the
United States Securities Exchange Act of 1934
,
as amended, and all rules and regulations promulgated thereunder and the applicable securities (“
Blue Sky
”) laws of
the states of the United States;
(ggg)
“
Warrant Certificate
” means the certificate representing the Warrants; and
(hhh)
“
Water Rights
” means water rights, water concessions, water leases and water supply agreements, ditch rights or
other interests in water or water conveyance rights owned or leased by the relevant person.
3.
Acceptance or Rejection of Subscription
(a)
The Subscriber and each Disclosed Beneficial Purchaser, if any, acknowledges and agrees that the acceptance of this offer will be
conditional upon the issue and sale of the Purchased Securities to the Subscriber and each Disclosed Beneficial Purchaser, if any, being
exempt from any prospectus or offering memorandum requirements of Securities Laws or the equivalent provisions of securities laws of any
other applicable jurisdiction, as the case may be. The Subscriber acknowledges that this Subscription Agreement is not enforceable by
the Subscriber until this Subscription Agreement has been accepted by the Company. The Company will be deemed to have accepted this Subscription
Agreement upon the Company’s execution of the acceptance at page (viii) of this Subscription Agreement and the delivery at the Closing
of the Purchased Securities to or upon the direction of the Subscriber. If this subscription is rejected in whole, any cheques or other
forms of payment delivered pursuant to the terms hereof representing the Purchase Price will be promptly returned to the Subscriber, without
interest or deduction. If this subscription is accepted only in part, a cheque or other form of payment representing any refund of the
Purchase Price for that portion of the subscription for the Purchased Securities which is not accepted will be promptly delivered to the
Subscriber, without interest or deduction.
(b)
The Subscriber hereby confirms its irrevocable subscription for and offer to purchase Units from the Company, on and subject to the
terms and conditions set out in this Subscription Agreement, for the Purchase Price which is payable as described in Section 4 hereto.
(c)
The Subscriber hereby irrevocably authorizes and appoints the Company as an attorney of the Subscriber with the following powers:
(i) to act as the Subscriber’s representative at the closing of the Subscription; (ii) to complete or correct any clerical errors,
revisions or omissions in any form or document provided by the Subscriber, including this Subscription Agreement, in each case, following
receipt of Subscriber’s consent; (iii) to receive on the Subscriber’s behalf certificates representing the Purchased Securities
and, if applicable, the Underlying Securities purchased under this Subscription Agreement.
4
(d)
The foregoing power of attorney is irrevocable, is coupled with an interest and has been given for valuable consideration, the receipt
and adequacy of which are acknowledged. Such power of attorney and other rights and privileges granted under this Section 3 will survive
any legal or mental incapacity, dissolution, bankruptcy or death of the Subscriber and extends to the heirs, executors, administrators,
other legal representatives and successors, transferees and assigns of the Subscriber (as the case may be). Any person dealing with the
Company may conclusively presume and rely upon the fact that any document, instrument or agreement executed by an attorney acting pursuant
to this Section 3 or any action taken by an attorney acting pursuant to this Section 3, is authorized and binding on the Subscriber, without
further inquiry. The Subscriber agrees (on its own behalf and, if applicable, on behalf of each Disclosed Beneficial Purchaser on whose
behalf it is contracting) to be bound by any representations or actions properly made or taken by such attorney and waives any and all
defences that may be available to contest, negate or disaffirm any action of such attorney taken under the foregoing power of attorney.
4.
Conditions of Purchase and Sale
(a)
The Subscriber acknowledges and agrees that the obligations of the Company hereunder are conditional on the fulfillment of the following
conditions at or prior to the Closing Time:
(i)
not later than 4:00pm (Toronto time) on October 14, 2026, or such other time or date as the Company may agree, the Subscriber having
properly completed, signed and delivered this Subscription Agreement (including all applicable Schedules hereto) to:
Bennett Jones LLP
3400 One First Canadian Place,
Toronto, ON M5X 1A4
Attention: [*]
Email: [*]
or at such other place(s) as the Company may determine;
(ii)
satisfaction by the Subscriber of the Purchase Price payable by it hereunder to the Company, by wire transfer, or in such other manner
as may be provided for by the Company, in Canadian dollars;
(iii)
the Subscriber having executed and returned to the Company the Investor Rights Agreement;
(iv)
the Subscriber having executed and returned to the Company, at the Company’s request, all other documents as may be required
by the Securities Laws for delivery by the Company in connection with the Subscriber’s subscription for the Purchased Securities;
(v)
the representations and warranties made by the Subscriber herein (including representations and warranties made in any Schedule attached
hereto, as applicable), being true and correct when made and being true and correct at the Closing Time with the same force and effect
as if they had been made on and as of the Closing Time;
(vi)
the Company having obtained all required regulatory approvals for the completion of the transactions contemplated hereby, including
conditional approval of the TSXV (which shall be subject only to customary conditions); and
(vii)
all covenants, agreements and conditions contained in this Subscription Agreement to be performed by the Subscriber having been performed
or complied with in all material respects on or prior to the Closing Date.
(b)
The Company acknowledges and agrees that Subscriber’s obligation to purchase the Purchased Securities is conditional on the
fulfillment of the following conditions at or prior to the Closing Time:
(i)
the Subscriber receiving a fully executed copy of the Investor
Rights Agreement;
5
(ii)
the representations and warranties made by the Company herein,
being true and correct when made and being true and correct at the Closing Time with the same force and effect as if they had been made
on and as of the Closing Time;
(iii)
the Company having obtained all required regulatory approvals
for the completion of the transactions contemplated hereby, including conditional approval of the TSXV (which shall be subject only to
customary conditions); and
(iv)
all covenants, agreements and conditions contained in this
Subscription Agreement to be performed by the Company having been performed or complied with in all material respects on or prior to
the Closing Date.
(c)
Any obligation of the Company to sell the Purchased Securities to the Subscriber is subject to:
(i)
acceptance by the Company of the Subscriber’s subscription pursuant to this Subscription Agreement, in whole or in part, subject
to the Company’s sole and absolute discretion;
(ii)
the Subscriber having executed and returned to the Company the Investor Rights Agreement; and
(iii)
the Subscription being exempt from the requirements to file a prospectus, registration statement or similar document contained in
any Securities Laws applicable to the sale of the Purchased Securities or upon the issue of such orders, consents or approvals as may
be required to permit such sale without the requirement of filing a prospectus or registration statement or filing or delivering a similar
document.
(d)
The Subscriber understands that the information provided herein will be relied upon by the Company and its counsel for the purposes
of determining the eligibility of the Subscriber to purchase the Purchased Securities. The Subscriber agrees to provide upon request any
additional information that the Company, acting reasonably, determines necessary or appropriate in determining the Subscriber’s
eligibility to purchase the Purchased Securities.
5.
Fractional Shares
No fractional Common Shares are issuable
in accordance herewith, and if a subscriber subscribes for such number of Purchased Securities or Underlying Securities as would give
it a fractional number of Common Shares, the aggregate number of Common Shares to be issued by the Company in accordance herewith will
be rounded down to the next whole number of Common Shares and the Subscriber will not be entitled to any compensation in respect of such
fraction(s).
6.
The Closing
Delivery and payment for the Purchased
Securities and issuance thereof will be completed at the offices of Bennett Jones LLP, counsel to the Company, at 3400 One First Canadian
Place, Toronto, ON M5X 1A4 (or at such other time and place as the Company may determine) at the Closing Time.
The obligation of the Company to complete
the Closing is conditional upon the Subscriber having duly executed and delivered the Investor Rights Agreement to the Company.
If, on or prior to the Closing Time,
the terms and conditions contained in this Subscription Agreement have been complied with to the satisfaction of, as applicable, the Company
or waived by it (as such waiver may be permitted) and the Subscriber or waived by it (as such waiver may be permitted), this Subscription
Agreement shall be delivered to the Company, and the Purchase Price shall be delivered to the Company against deposit of physical certificates
or direct registration statements by the Company of the Purchased Securities and, if applicable, the Underlying Securities and such other
documentation as may be required pursuant to this Subscription Agreement.
6
7.
Representations, Warranties, Covenants and Acknowledgements of the Subscriber
By executing this Subscription Agreement,
the Subscriber (on its own behalf and, if applicable, on behalf of each Disclosed Beneficial Purchaser on whose behalf the Subscriber
is contracting) represents, warrants, covenants and acknowledges to and with the Company (and acknowledges that the Company and its counsel
are relying thereon) that:
Authorization and Effectiveness
(a)
if the Subscriber is an individual, the Subscriber is of the full age of majority in the jurisdiction in which this Subscription Agreement
and the Investor Rights Agreement is executed and has all requisite legal capacity and competence to execute, deliver and be bound by
this Subscription Agreement and the Investor Rights Agreement, to perform all of its obligations and covenants hereunder and to undertake
all actions required of the Subscriber hereunder and thereunder;
(b)
if the Subscriber is not an individual, the Subscriber has the requisite power, authority and legal capacity to execute, deliver and
be bound by this Subscription Agreement and the Investor Rights Agreement, to perform all of its obligations and covenants hereunder and
to undertake all actions required of the Subscriber hereunder and thereunder, all necessary approvals of its directors, partners, shareholders,
trustees or otherwise with respect to such matters have been given or obtained and the individual signing this Subscription Agreement
and the Investor Rights Agreement has been duly authorized to do so;
(c)
if the Subscriber is a body corporate, the Subscriber is incorporated or organized and validly subsisting under the laws of its jurisdiction
of incorporation or organization;
(d)
if the Subscriber is acting as principal, this Subscription Agreement has been duly and validly authorized, executed and delivered
by the Subscriber, and, when accepted by the Company, will constitute a legal, valid and binding obligation enforceable against the Subscriber
in accordance with the terms hereof (subject to bankruptcy, insolvency and other laws limiting the enforceability of creditors’
rights and subject to the qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction);
(e)
if the Subscriber is acting as agent or trustee (including, for greater certainty, a portfolio manager or comparable adviser) for
a principal, the Subscriber is duly authorized to execute and deliver this Subscription Agreement and all other necessary documents in
connection with such subscription on behalf of such principal, each of whom is subscribing as principal for its own account and not for
the benefit of any other person, and this Subscription Agreement has been duly and validly authorized, executed and delivered by or on
behalf of, and, when accepted by the Company, will constitute a legal, valid and binding obligation enforceable in accordance with the
terms hereof (subject to bankruptcy, insolvency and other laws limiting the enforceability of creditors’ rights and subject to the
qualification that equitable remedies may only be granted in the discretion of a court of competent jurisdiction) against, such principal;
(f)
the execution and delivery of this Subscription Agreement and the Investor Rights Agreement, the performance and compliance with the
terms hereunder and thereunder, the subscription for the Purchased Securities and the completion of the transactions contemplated hereby
will not result in any breach of, or be in conflict with or constitute a default under, or create a state of facts which, after notice
or lapse of time, or both, would constitute a default under any term or provision of the constating documents, by-laws or resolutions
of the Subscriber (if not an individual), the Securities Laws or any other applicable law, any agreement (written or oral) to which the
Subscriber is a party or any applicable regulation, judgment, decree, order, statute or ruling to which the Subscriber is bound;
(g)
the Subscriber is not a person created or used solely to purchase or hold securities in order to comply with or rely upon an exemption
from the prospectus requirements of applicable Securities Laws and except as disclosed in writing to the Company, the Subscriber does
not act jointly or in concert with any other person or company for the purposes of acquiring securities of the Company;
Residence
(h)
the Subscriber is resident, or if not an individual, has a head office, in the jurisdiction indicated on the “Subscription and
Subscriber Information” section of this Subscription Agreement and such address was not created and is not used solely for the purpose
of acquiring Units. The purchase by and sale to the Subscriber of the Units, and any act, solicitation, conduct or negotiation directly
or indirectly in furtherance of such purchase or sale, has occurred only in such jurisdiction and the Subscriber intends that the Securities
Laws of such jurisdiction govern such sale to and purchase by the Subscriber;
7
Subscriber Eligibility
(i)
the Subscriber is eligible to purchase the Purchased Securities pursuant to an exemption from the prospectus and registration requirements
of applicable Securities Laws;
(j)
the Subscriber: (i) is not an “insider” or “related party” of the Company or a “registrant” or
a promoter (each as defined on pages (v) and (vi) hereof); or (ii) has identified itself to the Company as an “insider”, “registrant”
or a promoter (as applicable) on the execution pages hereof;
(k)
the Subscriber is purchasing the Purchased Securities for investment purposes only and not with a view to resale or distribution;
(l)
unless the Subscriber is acting as agent or trustee pursuant to subparagraph E, above, or has filled out the “Disclosed Beneficial
Purchaser Information” on page (iii) hereof, the Subscriber (as indicated under “Name of Subscriber” on such page) is
purchasing the Purchased Securities for its own account, and not for the benefit of any other person;
(m)
except in respect of the transactions contemplated in this Subscription Agreement and the Investor Rights Agreement, or information
received from the Company under confidentiality restrictions, the Subscriber does not have actual knowledge of a “material fact”
or “material change” (as such terms are defined pursuant to Canadian Securities Laws) in the affairs of the Company that has
not been generally disclosed to the public;
(n)
the Subscriber confirms that the acknowledgements, representations, warranties, covenants and information contained herein and therein
are true and correct as of the date hereof and will be true and correct as of the Closing Time and if less than a complete copy of this
Subscription Agreement is delivered to the Company, the Company and its advisors are entitled to assume that the Subscriber accepts and
agrees to all the terms and conditions of the pages not delivered, unaltered;
(o)
the Subscriber acknowledges and agrees that:
(i)
the Purchased Securities (including the Underlying Securities) have not been and will not be registered under the U.S. Securities
Act or the securities laws of any state;
(ii)
the Purchased Securities (including the Underlying Securities) may not be offered or sold, directly or indirectly, in the United States
without registration under the U.S. Securities Act and all applicable state securities laws or compliance with requirements of an exemption
from such registration;
(iii)
the Company has no obligation or present intention of filing a registration statement under the U.S. Securities Act in respect of
the Purchased Securities or the Underlying Securities;
8
(p)
the Subscriber agrees to the terms included in Schedule “A” hereto, as applicable;
(q)
the Subscriber is a U.S. Accredited Investor;
Risks of Private Placement
(r)
the Subscriber acknowledges that:
(i)
no securities commission or similar regulatory authority has reviewed or passed on the merits of the Purchased Securities or the Underlying
Securities;
(ii)
there is no government or other insurance covering the Purchased Securities or the Underlying Securities;
(iii)
there are risks associated with the purchase of the Purchased Securities and the Subscriber has read and understands such risks and
is comfortable investing in the Purchased Securities and the Underlying Securities notwithstanding such risks;
(iv)
there are restrictions on the Subscriber’s ability to resell the Purchased Securities or the Underlying Securities and it is
the responsibility of the Subscriber to find out what those restrictions are and to comply with them before selling the Purchased Securities
or the Underlying Securities;
(v)
the Company has advised the Subscriber that the Company is relying on an exemption from the requirements to provide the Subscriber
with a prospectus under Canadian Securities Laws and, as a consequence of acquiring the Purchased Securities pursuant to these exemptions,
certain protections, rights and remedies provided by Canadian Securities Laws, including certain applicable statutory rights of rescission
or damages, will not be available to the Subscriber and the common law may not provide the Subscriber with an adequate remedy in the event
it suffers investment losses in connection with securities acquired pursuant to such exemption; and
(vi)
the Company may complete additional financings in the future in order to develop the business of the Company and to fund its ongoing
development, there is no assurance that such financings will be available and, if available, they may not be completed on reasonable terms,
any such future financings may have a dilutive effect on current or future security holders of the Company, including the Subscriber,
and if such future financings are not available, the Company may be unable to fund its ongoing development and the lack of capital resources
may result in the failure of its business venture;
9
No Prospectus or Undisclosed Information
(s)
the Subscriber understands that the Purchased Securities are only being offered on a private placement basis and that the sale of
the Purchased Securities is therefore conditional upon such sale being exempt from the requirements to file and obtain a receipt for a
prospectus or registration statement or to deliver an offering memorandum, and no prospectus or registration statement has been filed
by the Company with any securities commission or similar regulatory authority in any jurisdiction in connection with the issuance of the
Purchased Securities. As a result of acquiring the Purchased Securities pursuant to such exemptions, the Subscriber acknowledges and confirms
that:
(i)
the Subscriber may be restricted from using some of the protections, rights and remedies otherwise available under Securities Laws,
including applicable statutory rights of rescission or damages in the event of a misrepresentation;
(ii)
the Subscriber may not receive information that would otherwise be required to be provided to it under Securities Laws or contained
in a prospectus prepared in accordance with applicable Securities Laws;
(iii)
the Company is relieved from certain obligations that would otherwise apply under Securities Laws; and
(iv)
the common law may not provide investors with an adequate remedy in the event they suffer investment losses in connection with Purchased
Securities acquired in a private placement.
(t)
the Subscriber has not received or been provided with a prospectus, registration statement or offering memorandum, within the meaning
of Securities Laws, or any sales or advertising literature in connection with the Subscription. The Subscriber’s decision to subscribe
for the Purchased Securities was not based upon, and the Subscriber has not relied upon, any verbal or written representations as to any
fact made by or on behalf of the Company and its directors, officers, employees, agents and representatives, other than set out in this
Subscription Agreement and the Schedules attached hereto, which are deemed to be incorporated herein). The Subscriber’s decision
to subscribe for the Purchased Securities was based solely upon this Subscription Agreement and the Schedules attached hereto, and information
about the Company which is publicly available (any such information having been obtained by the Subscriber without independent investigation);
(u)
counsel to the Company and its directors, officers, employees, agents and representatives assume no responsibility or liability of
any nature whatsoever for the accuracy or adequacy of any such publicly available information concerning the Company or as to whether
all information concerning the Company that is required to be disclosed or filed by the Company under the Securities Laws has been so
disclosed or filed;
Investment Suitability
(v)
the Subscriber confirms that the Subscriber:
(i)
has such knowledge and experience in financial and business affairs as to be capable of evaluating the merits and risks of its investment
in the Purchased Securities and the Underlying Securities;
(ii)
is capable of assessing the proposed investment in the Purchased Securities and the Underlying Securities as a result of the Subscriber’s
own experience or as a result of advice received from a person registered under applicable Securities Laws;
10
(iii)
is aware of the characteristics of the Purchased Securities and the Underlying Securities and the risks relating to an investment
therein; and
(iv)
is able to bear the economic risk of loss of its investment in the Purchased Securities;
(w)
the Subscriber understands that no securities commission, stock exchange, governmental agency, regulatory body or similar authority
has made any finding or determination or expressed any opinion with respect to the merits of investing in the Purchased Securities or
the Underlying Securities nor is there any government or other insurance covering the Purchased Securities or the Underlying Securities;
No Representations
(x)
the Subscriber confirms that neither the Company nor any of its directors, employees, officers, representatives, agents or affiliates
have made any representations (written or oral) to the Subscriber:
(i)
regarding the future price or value of the Purchased Securities or the Underlying Securities;
(ii)
that any person will resell or, other than as provided for in this Subscription Agreement, repurchase the Purchased Securities or
the Underlying Securities; or
(iii)
that any person will refund the purchase price of the Purchased Securities or the Underlying Securities other than as provided in
this Subscription Agreement.
Limitations on Resale
(y)
the Subscriber understands that it may not be able to resell the Purchased Securities or the Underlying Securities except in accordance
with limited exemptions available under applicable Securities Laws, and that the Subscriber is solely responsible for (and the Company
is not in any way responsible for) the Subscriber’s compliance with applicable resale restrictions. The Subscriber will comply with
all applicable Securities Laws concerning the subscription, purchase, holding and resale of the Purchased Securities or the Underlying
Securities and will not resell any of the Purchased Securities or the Underlying Securities except in accordance with the provisions of
applicable Securities Laws;
(z)
the Subscriber acknowledges that the Purchased Securities and the Underlying Securities may only be transferred or assigned in compliance
with applicable laws (including applicable Securities Laws) and will be subject to statutory resale restrictions under the Securities
Laws in which the Subscriber resides or under other applicable securities laws; the Subscriber covenants that it will not resell the Purchased
Securities or the Underlying Securities except in compliance with such laws and the Subscriber acknowledges that it is solely responsible
(and the Company is not in any way responsible) for such compliance;
(aa)
the Subscriber acknowledges that, pursuant to applicable Securities Laws, the assignment, transfer, hypothecation or pledge of a Common
Share is restricted;
11
Legends
(bb)
there are restrictions on the ability to resell Purchased Securities and the Underlying Securities and it is the responsibility of
the Subscriber to find out what those restrictions are and to comply with them before selling the Purchased Securities or the Underlying
Securities and the Purchased Securities and the Underlying Securities may not be resold under Canadian Securities Laws until after the
expiry of the applicable “hold” or “restricted” period attaching to such securities unless sold pursuant to an
exemption under applicable Securities Laws. The certificates evidencing the Purchased Securities and, if applicable, the Underlying Securities
(and any replacement certificate issued prior to the expiration of the applicable hold periods), or ownership statements issued under
a direct registration system or other electronic book entry system, which it shall receive will bear a legend referring to such restrictions
on resale and neither the Company nor any transfer agent of the Company will register any transfers of such Purchased Securities and any
such Underlying Securities not made in compliance with such restrictions on resale. For purposes of complying with applicable securities
laws and National Instrument 45-102 –
Resale of Securities
, the Subscriber understands and acknowledges that the certificates
evidencing the Purchased Securities and, if applicable, the Underlying Securities (and any replacement certificate issued prior to the
expiration of the applicable hold periods), or ownership statements issued under a direct registration system or other electronic book
entry system, which it shall receive will bear a legend, substantially in the following form (and with the necessary information inserted),
referring to such restrictions on resale and neither the Company nor any transfer agent of the Company will register any transfers of
such Purchased Securities or Underlying Securities not made in compliance with such restrictions on resale:
“UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER OCTOBER 16, 2026.”
And the Subscriber further acknowledges
that the certificates representing the Purchased Securities and, if applicable, the Underlying Securities may, in certain circumstances,
bear the following legend as required by the TSXV;
“WITHOUT PRIOR WRITTEN APPROVAL
OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN
CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL
February
17, 2026”
In addition, Purchased Securities and,
if applicable, Underlying Securities, will be evidenced by physical certificates or direct registration statements that will bear the
U.S. Securities Laws legends set forth on Schedule “A” hereto;
Not Proceeds of Crime
(cc)
the funds representing the Purchase Price which will be advanced by the Subscriber hereunder will not represent proceeds of crime
for the purposes of the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada), as may be amended from time
to time (the “
PCMLTFA
”) and for the purposes of the United States Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, as may be amended from time to time (the “
PATRIOT
Act
”) and the Subscriber acknowledges that the Company may in the future be required by law to disclose the Subscriber’s
name and other information relating to this Subscription Agreement and the Subscriber’s subscription hereunder, on a confidential
basis, pursuant to the PCMLTFA and the PATRIOT Act. To the best of the Subscriber’s knowledge: (i) none of the funds representing
the Purchase Price to be provided by the Subscriber: (A) have been or will be derived from or related to any activity that is deemed criminal
under the laws of Canada, the United States, any International Jurisdiction or any other jurisdiction; or (B) are being tendered on behalf
of a person or entity who has not been identified to the Subscriber; and (ii) it shall promptly notify the Company if the Subscriber discovers
that any of such representations cease to be true, and to provide the Company with appropriate information in connection therewith;
12
No Financial Assistance or Advice
(dd)
the Subscriber has not received and does not expect to receive any financial assistance from the Company, directly or indirectly,
in respect of the Subscriber’s purchase of the Purchased Securities, the offer of Purchased Securities does not constitute a recommendation
to purchase the Purchased Securities or the Underlying Securities or financial product advice and the Company has not had regard to the
Subscriber’s particular objectives, financial situation and needs;
No Advertising
(ee)
the Subscriber has not become aware of any advertisement in printed media of general and regular paid circulation or on radio, television
or other form of telecommunication or any other form of advertisement (including electronic display or the Internet including but not
limited to the Company’s website) or sales literature with respect to the distribution of the Purchased Securities or any seminar
or meeting whose attendees have been invited by general solicitation or general advertising;
No Other Fees
(ff)
the Subscriber confirms that there is no person acting or purporting to act on behalf of the Subscriber in connection with the transactions
contemplated herein who is entitled to any brokerage or finder’s fee. If any other person establishes a claim that any fee or other
compensation is payable in connection with this subscription for the Purchased Securities on account of the Subscriber’s subscription,
the Subscriber covenants to indemnify and hold harmless the Company with respect thereto and with respect to all costs reasonably incurred
in the defence thereof;
Other Documents
(gg)
if required by Securities Laws or by any securities commission, stock exchange or other regulatory authority, the Subscriber will
execute, deliver, file and otherwise assist the Company in filing such reports, undertakings and other documents with respect to the subscription
for and issuance of the Purchased Securities;
Subscriber’s Responsibility for Legal and Financial
Advice
(hh)
the Subscriber acknowledges that purchasing, holding and disposing of the Purchased Securities (including the Underlying Securities)
may have legal and tax consequences in any applicable jurisdictions and the Subscriber confirms that it is solely responsible for obtaining
its own legal, tax, investment and other professional advice with respect to the execution, delivery and performance by it of this Subscription
Agreement and the transactions contemplated hereunder including the suitability of the Purchased Securities (including the Underlying
Securities) as an investment for the Subscriber, the tax consequences of purchasing and dealing with the Purchased Securities (including
the Underlying Securities), and the resale restrictions and “hold periods” to which the Purchased Securities (including the
Underlying Securities) are or may be subject under Securities Laws. The Subscriber has not relied upon any statements made by or purporting
to have been made on behalf of the Company or its counsel with respect to such matters;
(ii)
the Subscriber acknowledges that all costs and expenses incurred by the Subscriber (including any fees and disbursements of legal
counsel, tax advisors, or other professional advisors retained by the Subscriber) relating to the Subscription shall be borne solely by
the Subscriber;
13
Registration
(jj)
the Subscriber is not engaged in the business of trading in securities or exchange contracts as a principal or agent and does not
hold himself, herself or itself out as engaging in the business of trading in securities or exchange contracts as a principal or agent,
or is otherwise exempt from any requirements to be registered as a dealer under National Instrument 31-103 –
Registration Requirements,
Exemptions and Ongoing Registrant Obligations
;
Not a Control Person
(kk)
the Subscriber is not a Control Person of the Company and will not become a Control Person of the Company by virtue of its subscription
for Purchased Securities or the Underlying Securities hereunder and the Subscriber does not intend to act in concert with any other person
or persons to form a control group of the Company;
Personal Information
(ll)
The Subscriber acknowledges that this Subscription Agreement and Schedule “A” attached hereto require the Subscriber to
provide certain personal information relating to the Subscriber to the Company. Such information is being collected and will be used by
the Company for the purposes of completing the Subscription, which includes, without limitation, determining the Subscriber’s eligibility
to purchase the Purchased Securities under Securities Laws, preparing and registering certificates representing securities or arranging
for non-certificated, electronic delivery of same, and completing filings required by any securities regulatory authority or exchange.
Such personal information may be disclosed by the Company to (i) securities regulatory authorities and commissions, or stock exchanges,
(ii) the Company’s registrar and transfer agent, (iii) any government agency (including any taxing authorities), board or other
entity and (iv) any of the other parties involved in this Subscription, including the legal counsel of the Company, and may be included
in record books in connection with this Subscription. By executing this Subscription Agreement, the Subscriber consents to the foregoing
collection, use and disclosure of such personal information;
(mm)
the Subscriber acknowledges being notified that if the Subscriber is resident or otherwise subject to the applicable securities legislation
of a jurisdiction in Canada: (i) the Company will deliver to the applicable securities regulatory authority or regulator certain personal
information pertaining to the Subscriber, including such Subscriber’s full name, residential address and telephone number, email
address, the number of Purchased Securities purchased by such Subscriber, the total purchase price paid for such Purchased Securities,
the prospectus exemption relied on and the date of distribution of the Purchased Securities; (ii) such information is being collected
indirectly by the applicable securities regulatory authority or regulator under the authority granted to it in securities legislation;
(iii) such information is being collected for the purposes of the administration and enforcement of the securities legislation of the
local Canadian jurisdiction; and (iv) the Subscriber may contact the public officials listed on Schedule “D” with respect
to questions about the security regulatory authority’s or regulator’s indirect collection of such information;
Company Generally
(nn)
the Subscriber acknowledges that the Company has not declared dividends since incorporation and does not have any present intention
to declare or pay any dividends in the foreseeable future;
(oo)
the Subscriber is familiar with the aims and objectives of the Company and has been informed of the nature of its activities;
14
Counsel to the Company
(pp)
Bennett Jones LLP is acting solely as Canadian legal counsel to the Company and is not acting as counsel to the Subscriber or assumes
any responsibility or liability of any nature whatsoever for the accuracy or adequacy of any of the information furnished to the Subscriber
in connection with the Subscription.
8.
Representations, Warranties and Covenants of the Company
The Company hereby represents and warrants
that:
(a)
the Company has good and sufficient power, authority and right to enter into and deliver this Subscription Agreement and the Investor
Rights Agreement, issue the Warrant Certificate and to perform its obligations hereunder and thereunder, and the execution, delivery and
performance of this Subscription Agreement, the Investor Rights Agreement and the Warrant Certificate and the Company’s consummation
of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action
on the part of the Company;
(b)
this Subscription Agreement, the Investor Rights Agreement and the Warrant Certificate constitute valid and binding obligations of
the Company enforceable against the Company in accordance with its terms subject, however, to limitations on enforcement imposed by bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of the rights of creditors and others and to the extent that equitable
remedies such as specific performance and injunctions are only available in the discretion of the court from which they are sought;
(c)
the entering into of this Subscription Agreement and the Investor Rights Agreement, the issuance of the Warrant Certificate and the
consummation of the transactions contemplated hereby and thereby will not result in the violation of any of the terms and provisions of
the constating documents or by-laws of the Company or any applicable order or ruling of any court, arbitrator or government authority
having jurisdiction over the Company or of any indenture or other agreement, written or oral, to which the Company is a party or by which
it is bound or, to the best of the knowledge of the Company, after due inquiry, of any law or regulation;
(d)
the Company (i) has been duly incorporated and organized and is validly existing and in good standing under the laws of the province
of British Columbia, (ii) has all requisite corporate power and authority, and all necessary licences, leases, permits, authorizations
and other approvals to carry on its business as now conducted and to own or lease, and operate, its properties and assets, and (iii) will
have all required corporate power and authority to create, issue, allot, sell and deliver, as applicable, the Unit Shares and the Unit
Warrants at the Closing Time and the Unit Warrant Shares in accordance with the terms of the Warrants, to enter into this Subscription
Agreement and the Warrant Certificate and to carry out the provisions of this Subscription Agreement and the Warrant Certificate required
to be carried out by it;
(e)
the Unit Shares when issued by the Company pursuant to this Subscription Agreement against payment of the Purchase Price set forth
herein and the Unit Warrant Shares issuable upon the due exercise of the Unit Warrants in accordance with the terms of the Warrant Certificate,
including payment of the exercise price therefor, will, at the time of issue, be validly issued and outstanding as fully paid and non-assessable
Common Shares;
(f)
the Company is, in all material respects, conducting its business in compliance with all applicable laws, rules and regulations of
each jurisdiction in which its business is carried on and is duly licensed, registered or qualified in all jurisdictions in which it owns,
leases or operates its property or carries on business to enable its business to be carried on as now conducted and its property and assets
to be owned, leased and operated;
15
(g)
the execution and delivery of this Subscription Agreement, the performance by the Company and compliance with the terms of this Subscription
Agreement and the issue, sale and delivery of the Purchased Securities by the Company will not result in any breach of, or be in conflict
with or constitute a default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a default
under any term or provision of the constating documents, articles or resolutions of the Company or any material agreement to which the
Company is a party or by which any of them is bound or any judgment, decree, order, statute, rule or regulation applicable to it;
(h)
the Company is a "reporting issuer" in each of the provinces and territories of Canada under Canadian Securities Laws, not
included in a list of defaulting reporting issuers maintained by the securities regulatory authorities in such jurisdictions, and in particular,
without limiting the foregoing, the Company has at all times complied in all material respects with its obligations to make timely disclosure
of all material changes and material facts relating to it and there is no material change or material fact relating to the Company which
has occurred and with respect to which the requisite news release has not been disseminated or material change report, as applicable,
has not been filed with the securities regulatory authorities in such jurisdictions, the Company is also obligated to file reports in
the United States pursuant to the U.S. Securities Exchange Act of 1934, and is in compliance with such reporting obligations;
(i)
there is no action, suit, proceeding, inquiry or investigation before or brought by any court or Governmental Authority, governmental
instrumentality or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened against or affecting the Company
or any subsidiary which is required to be disclosed in the Public Disclosure Documents, and which if not so disclosed, or which if determined
adversely, would have a Material Adverse Effect, or would materially and adversely affect the consummation of the transactions contemplated
in this Agreement or the performance by the Company of its obligations under the Transaction Documents. The aggregate of all pending legal
or governmental proceedings to which the Company or any Material Subsidiary is a party or of which any of their respective property or
assets is subject, which are not described in the Public Disclosure Documents include only ordinary routine litigation incidental to the
business, properties and assets of the Company and the Material Subsidiaries and would not reasonably be expected to result in a Material
Adverse Effect. There are no judgments or orders against the Company or any of the Material Subsidiaries which are unsatisfied that would
reasonably be expected to have a Material Adverse Effect, nor are there any consent decrees or injunctions to which the Company or the
Material Subsidiaries or their assets, properties or business are subject that would reasonably be expected to have a Material Adverse
Effect;
(j)
all tax returns, reports, elections, remittances and payments of the Company and its subsidiaries required by applicable law to have
been filed or made in any applicable jurisdiction, have been filed or made (as the case may be) and are true, complete and correct in
all material respects except where the failure to make such filing, election, or remittance and payment would not result in a Material
Adverse Effect. All taxes of the Company and of its subsidiaries have been paid or accrued in the Financial Statements (except as any
extension may have been requested and granted or where such taxes are being contested in good faith, and in any case in which the failure
to pay or accrue such taxes would not result in a Material Adverse Effect). To the knowledge of the Company, no examination of any tax
return of the Company or its subsidiaries is currently in progress and there are no issues or disputes outstanding with any Governmental
Authority respecting any taxes that have been paid, or may be payable, by the Company or the Material Subsidiaries, except where such
examination, issues or disputes would not reasonably be expected to have a Material Adverse Effect. No tax deficiency has been asserted
against the Company and the Material Subsidiaries which would result in a Material Adverse Effect;
16
(k)
Material Properties and Mining Rights:
(i)
the Material Properties are the only material mines, projects or operations currently owned by the Company;
(ii)
the Company or one of its subsidiaries is the legal and beneficial owner of, and/or has good and marketable title to the Material
Properties, free and clear of any material Liens or charges;
(iii)
all of the Mining Rights associated with the Material Properties have been validly registered and recorded in favour of the Company
or one of its subsidiaries, as applicable, in accordance with all applicable laws and are in good standing, are valid and enforceable,
free and clear of any material Liens or charges, as applicable;
(iv)
except for payments made to Governmental Authorities to maintain certain permits and licenses, mining taxes, royalty, participation
and profit-sharing payments as disclosed in the Public Disclosure Documents, neither the Company nor any of its subsidiaries have any
obligation to pay any ongoing commission, license fee or similar payment to any person in respect of the Mining Rights associated with
the Material Properties;
(v)
there are no outstanding options, rights of first refusal or other pre-emptive rights of purchase which entitle any person to acquire
any of the rights, title or interests in the Mining Rights associated with the Material Properties;
(vi)
(a) the Mining Rights associated with the Material Properties are sufficient to permit the Company and/or its subsidiaries to access,
explore for, extract, exploit, remove, develop, mine, process and refine the mineral deposits, ore bodies and mineral inventories relating
thereto as is currently conducted; (b) the Company and its subsidiaries have all necessary Mining Rights, property rights, surface or
access rights, Water Rights, rights of way, ingress and egress rights and other necessary rights and interests relating to the Material
Properties as are necessary for the conduct of the Company’s or its subsidiaries’ current operations; and (c) there are no
material restrictions on such Mining Rights that would reasonably be expected to have a Material Adverse Effect;
17
(vii)
any and all of the agreements and other documents and instruments pursuant to which the Company or any subsidiary holds the Material
Properties (including any interest in, or right to earn an interest therein), are valid and subsisting agreements, documents or instruments
in full force and effect, enforceable in accordance with the terms thereof (subject to customary qualifications and exceptions), neither
the Company nor any subsidiary is in default of any of the material provisions of any such agreements, documents or instruments nor, to
the knowledge of the Company, is any such default currently being alleged, and such properties and assets are in good standing in all
material respects under the applicable statutes and regulations of the jurisdictions in which they are situated, all leases, licences
and claims pursuant to which the Company or any subsidiary derives the interests thereof in such property and assets are in good standing
and, to the knowledge of the Company, there has been no material default under any such lease, licence or claim and all taxes required
to be paid with respect to such properties and assets to the date hereof have been paid. The Material Properties (or any interest therein,
or right to earn an interest therein) are not subject to any right of first refusal or purchase or acquisition right which is not disclosed
in the Public Disclosure Documents;
(viii)
there are no restrictions imposed by any applicable law or by agreement which materially conflict with the proposed operation, exploration,
and/or development of the Material Properties;
(l)
in respect of the Material Properties, the Company and its subsidiaries:
(i)
have all Material Permits issued by the appropriate federal, provincial, regional, state, local or foreign regulatory agencies or
bodies necessary to carry on the business of the Company and its subsidiaries as it is currently conducted and all of the Material Permits
issued to date are valid and in full force and effect;
(ii)
expect that any additional Material Permits that are required to carry out the Company’s and its subsidiaries’ planned
business activities will be obtained in the ordinary course, subject to the risks and uncertainties concerning potential delays as set
out in the Public Disclosure Documents;
(iii)
are, and will be, in compliance with the terms and conditions of all Material Permits except where such non-compliance would not reasonably
be expected to have a Material Adverse Effect; and
(iv)
have not received any notice of proceedings relating to the revocation or modification of any such Material Permits or any notice
advising of the refusal to grant any Material Permit that has been applied for or is in process of being granted;
(m)
the Company is in compliance with the provisions of NI 43-101 in all material respects and has filed all required technical reports
in respect of its Material Properties, which remain current as at the date hereof. The Technical Reports comply in all material respects
with the requirements of NI 43-101 and there is no new material scientific or technical information concerning the Material Properties
since the respective dates thereof that would require a new technical report in respect of any such Material Property to be issued. The
information set forth in the Public Disclosure Documents relating to scientific and technical information, including the estimates of
the mineral resources and mineral reserves of the Material Properties, have been prepared in accordance with Canadian industry standards
set forth in NI 43-101; and the method of estimating the mineral resources and mineral reserves has been verified by mining experts who
are “qualified persons” (within the meaning of NI 43-101) and the information upon which the estimates of mineral resources
and mineral reserves were based, was, at the time of delivery thereof, complete and accurate in all material respects and there have been
no material changes to such information since the date of delivery or preparation thereof, other than the depletion of such mineral resources
and mineral reserves as a result of mining operations and extraction activities conducted by the Company or its subsidiaries at the Material
Properties since such dates of delivery or preparation of such technical reports concerning the Material Properties;
18
(n)
to the knowledge of the Company, the projected capital and operating costs and projected production and operating results relating
to the Material Properties, as summarized in the Public Disclosure Documents are reasonable by the Company in all material respects subject
to the assumptions, qualifications, limitations, risks and uncertainties stated therein;
(o)
with respect to the Material Properties:
(i)
each of the Company and its subsidiaries is in material compliance with any and all applicable federal, provincial, state, local,
municipal or foreign statute, law, rule, regulation, ordinance, code, policy or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, “
Hazardous Materials
”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “
Environmental
Laws
”), except where the violation would not reasonably be expected, on an individual or aggregate basis, to have a Material
Adverse Effect;
(ii)
the Company and its subsidiaries have obtained all licences, permits, approvals, consents, certificates, registrations and other authorizations
under all applicable Environmental Laws (the “
Environmental Permits
”) necessary as at the date hereof for the operation
of the business as currently carried on by the Company and its subsidiaries, and the Company expects any additional Environmental Permits
that are required to carry out its and its subsidiaries’ planned business activities to be obtained and each Environmental Permit
is valid, subsisting and in good standing and neither the Company nor its subsidiaries are in material default or breach of any Environmental
Permit and no proceeding is pending, or to the knowledge of the Company, after due enquiry, threatened to revoke or limit any Environmental
Permit;
(iii)
neither the Company nor any of its subsidiaries have used, except in material compliance with all Environmental Laws and Environmental
Permits in effect at the applicable time, any property or facility which it owns or leases or previously owned or leased, to generate,
manufacture, process, distribute, use, treat, store, dispose of, transport or handle any hazardous substance, and no conditions exist
at, on or under any property now or previously owned, operated or leased by the Company or its subsidiaries which, with the passage of
time, or the giving of notice or both, would give rise to liability under any Environmental Laws, individually or in the aggregate, that
has or may reasonably be expected to have a Material Adverse Effect;
(iv)
except for those notices, offences, orders or directions that would not reasonably be expected, on an individual or aggregate basis,
to have a Material Adverse Effect: (a) neither the Company nor any of its subsidiaries nor to the knowledge of the Company, after due
enquiry, if applicable, any predecessor companies, have received any notice of, or been prosecuted for an offence alleging, non-compliance
with any Environmental Laws, and neither the Company nor its subsidiaries nor to the knowledge of the Company, if applicable, any predecessor
companies have settled any allegation of non-compliance short of prosecution; and (b) there are no orders or directions relating to environmental
matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the
Company or its subsidiaries, nor has the Company or any of its subsidiaries received notice of any of the same;
19
(v)
all exploration, development, mining and processing operations
on the Material Properties, including all operations and activities relating to the development, construction and commissioning of the
Material Properties, have been conducted in all material respects in accordance with all applicable material workers’ compensation
and health and safety and workplace laws, regulations and policies;
(vi)
except as ordinarily or customarily required by applicable permit or where it would not reasonably be expected, on an individual or
aggregate basis, to have a Material Adverse Effect, neither the Company nor any of its subsidiaries have received any notice wherein it
is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective
action under any law including any Environmental Laws; and
(vii)
there are no environmental audits, evaluations, assessments, studies or tests relating to the Company or its subsidiaries except for
ongoing audits, evaluations, assessments, studies or tests conducted by or on behalf of the Company in the ordinary course;
(p)
(i) there are no material claims or actions with respect to Indigenous rights currently threatened or, to the knowledge of the Company,
after due enquiry, pending with respect to the Company or its subsidiaries or any of the property interests of the Company or its subsidiaries;
(ii) the Company is not aware of any material land entitlement claims or aboriginal land claims having been asserted; (iii) the Company
is not aware of any legal actions relating to aboriginal or community issues having been instituted with respect to the Material Properties;
and (iv) no material dispute between the Company or any subsidiary and any local Indigenous group exists or, to the knowledge of the Company,
is threatened or imminent with respect to any of the Company’s properties or activities, in each such case which would reasonably
be expected to have a Material Adverse Effect;
(q)
the Company and its subsidiaries own or possess sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals,
trade secrets and other similar rights (collectively, “
Intellectual Property Rights
”) reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would reasonably be expected to
result in a Material Adverse Effect;
(r)
the Company agrees to use the proceeds from the sale of the Purchased Securities to the Subscriber (the “
Elmet Proceeds
”)
solely in connection with the Springer Project, with all mine and mill proceeds earmarked for tungsten development purposes only. The
Company shall not apply any portion of the Elmet Proceeds to activities unrelated to the Springer Project without the prior written consent
of the Subscriber. The Subscriber shall have audit rights to confirm the Company’s compliance with the foregoing commitment.
(s)
the issued and outstanding Common Shares of the Company are listed and posted for trading on the TSXV and the Nasdaq Capital Market,
the Company is not in default of any of the listing requirements of the TSXV or the Nasdaq Capital Market in any material respect, and
no order ceasing or suspending trading in any securities of the Company or prohibiting the issue, sale and delivery (as applicable) of
the Purchased Securities or the trading of any of the Company’s issued securities has been issued and no proceedings for such purpose
are, to the knowledge of the Company, pending or threatened, and the Company has not taken any actions which are likely or are expected
to result in such a proceeding or in the delisting or suspension of the Company by the TSXV or the Nasdaq Capital Market; and
(t)
no consent, approval, authorization, order, registration or qualification of or with any court, governmental authority or the shareholders
of the Company is required for the execution, delivery and performance by the Company of this Subscription Agreement, except for such
consents, approvals, authorizations, orders and registrations or qualifications as may be required under Securities Laws, or rules of
the TSXV or the Nasdaq Capital Market in connection with the sale of the Purchased Securities.
20
9.
Indemnification
Survival
(a)
All representations and warranties of the Company and the Subscriber
contained in this Subscription Agreement (including all schedules and exhibit hereto and all certificates, documents, instruments and
undertakings furnished pursuant to this Subscription Agreement) shall survive the Closing and continue in full force and effect for the
benefit of the Company or the Subscriber, as applicable for a period of two years following the Closing Date. For greater certainty, and
without limiting the generality of the foregoing, the provisions contained in this Agreement in any way related to the indemnification
in this Section 9 shall survive and continue in full force and effect, indefinitely, subject only to the applicable limitation period
prescribed by law.
Indemnification by the Company
(b)
The Company shall indemnify, defend and hold harmless the Subscriber, and its respective affiliates, any
assignee or successor thereof, and each officer, director, manager, employee, agent and representative of each of the foregoing (collectively,
“
Subscriber Indemnified Parties
”, each of whom is an express third party beneficiary of the applicable provisions of
this Section 8) from and against, and pay or reimburse the Subscriber Indemnified Parties for, any and all losses, actions, orders, liabilities,
damages, diminution in value, taxes, interest, penalties, Liens, amounts paid in settlement, costs and expenses (including reasonable
expenses of investigation and court costs and reasonable attorneys’ fees and expenses), (any of the foregoing, a “
Loss
”)
suffered or incurred by, or imposed upon, any Subscriber Indemnified Party arising in whole or in part out of or resulting directly or
indirectly from:
(i)
any breach of any representation, covenant, obligation or warranty of the Company in this Subscription
Agreement; and
(ii)
enforcing the Subscriber Indemnified Parties’ indemnification rights provided for hereunder.
Indemnification Procedures
(c)
For the purposes of this Subscription Agreement, (i) the term “
Indemnitee
” shall refer
to the Person or Persons indemnified, or entitled, or claiming to be entitled, to be indemnified, pursuant to the provisions of Section
9(b), and (ii) the term “
Indemnitor
” shall refer to the Person or Persons having the obligation to indemnify pursuant
to such provisions.
21
(d)
In the case of any claim for indemnification under this Subscription Agreement arising from a claim of
a third party (including any governmental authority), an Indemnitee must give prompt written notice and, subject to the following sentence,
in no case later than thirty (30) days after the Indemnitee’s receipt of notice of such claim, to the Subscriber or the Company
of any claim of which such Indemnitee has knowledge and as to which it may request indemnification hereunder. The failure to give such
notice will not, however, relieve an Indemnitor of its indemnification obligations except to the extent that the Indemnitor is actually
harmed thereby. The Indemnitor will have the right to defend and to direct the defense against any such claim in its name and at its expense,
and with counsel selected by the Indemnitor unless (i) there is a conflict of interest between the Indemnitee and the Indemnitor in the
conduct of such defense, (ii) the applicable third party alleges claims of fraud, willful misconduct or intentional misrepresentation,
or (iii) such claim is criminal in nature, could reasonably be expected to lead to criminal proceedings, or seeks an injunction or other
equitable relief against the Indemnitee. If the Indemnitor elects, and is entitled, to compromise or defend such claim, it will within
fifteen (15) days (or sooner, if the nature of the claim so requires) notify the Indemnitee of its intent to do so, and the Indemnitee
will, at the request and expense of the Indemnitor, cooperate in the defense of such claim. If the Indemnitor elects not to, or is not
entitled under this Section 9(d) to, compromise or defend such claim, or fails to notify the Indemnitee of its election as herein provided,
the Indemnitee may pay, compromise or defend such claim. Notwithstanding anything to the contrary contained herein, the Indemnitor will
have no indemnification obligations with respect to any such claim which has been or will be settled by the Indemnitee without the prior
written consent of the Indemnitor (which consent will not be unreasonably withheld, delayed or conditioned); provided, however, that notwithstanding
the foregoing, the Indemnitee will not be required to refrain from paying any claim which has matured by a court judgment or decree, unless
an appeal is duly taken therefrom and exercise thereof has been stayed, nor will it be required to refrain from paying any claim where
the delay in paying such claim would result in the foreclosure of a Lien upon any of the property or assets then held by the Indemnitee
or where any delay in payment would cause the Indemnitee material economic loss. The Indemnitor’s right to direct the defense will
include the right to compromise or enter into an agreement settling any claim by a Third Party; provided that no such compromise or settlement
will obligate the Indemnitee to agree to any settlement that requires the taking or restriction of any action (including the payment of
money and competition restrictions) by the Indemnitee (other than the delivery of a release for such claim and customary confidentiality
obligations) or that includes any admission as to fault, culpability or failure to act on the part of the Indemnitee, except with the
prior written consent of the Indemnitee. Notwithstanding the Indemnitor’s right to compromise or settle in accordance with the immediately
preceding sentence, the Indemnitor may not settle or compromise any claim over the objection of the Indemnitee; provided, however, that
consent by the Indemnitee to settlement or compromise will not be unreasonably withheld, delayed or conditioned. The Indemnitee will have
the right to participate in the defense of any claim with counsel selected by it subject to the Indemnitor’s right to direct the
defense. The fees and disbursements of such counsel will be at the expense of the Indemnitee; provided, however, that, in the case of
any claim which seeks injunctive or other equitable relief against the Indemnitee, the fees and disbursements of such counsel will be
at the expense of the Indemnitor.
(e)
Any indemnification claim that does not arise from a third-party claim must be asserted by a written notice
to the Company. The recipient of such notice will have a period of thirty (30) days after receipt of such notice within which to respond
thereto. If the recipient does not respond within such thirty (30) days, the recipient will be deemed to have accepted responsibility
for the Losses set forth in such notice and will have no further right to contest the validity of such notice. If the recipient responds
within such thirty (30) days after the receipt of the notice and rejects such claim in whole or in part, the party delivering will be
free to pursue such remedies as may be available to it under this Subscription Agreement or applicable Law.
General Indemnification Provisions
(f)
Notwithstanding anything in this Subscription Agreement to the contrary, for purposes of application of
the indemnification provisions of this Section 9, the amount of any Loss arising from the breach of any representation, warranty, covenant,
obligation or agreement contained in this Subscription Agreement shall be the entire amount of any Loss actually incurred by the respective
Indemnitee as a result of such breach and not just that portion of the Loss that exceeds the relevant level of materiality, if any.
(g)
Any indemnification obligation of an Indemnitor under this Section 9 will be paid in cash within three
(3) Business Days after the receipt of written confirmation of such obligation in accordance with Section 9(b).
22
10.
General
(a)
Headings
: The division of this Subscription Agreement into articles and sections and the insertion of headings are for convenience
of reference only and will not affect the construction or interpretation of this Subscription Agreement. The terms “this Subscription
Agreement,” “hereof,” “hereunder”, “herein” and similar expressions refer to this Subscription
Agreement and not to any particular article, section or other portion hereof and include any agreement supplemental thereto and any Schedules
and appendices attached hereto. Unless something in the subject matter or context is inconsistent therewith, reference herein to articles,
sections and paragraphs are to articles, sections, subsections and paragraphs of this Subscription Agreement.
(b)
Number and Gender
: Words importing the singular number only will include the plural and
vice versa
, words importing
the masculine gender will include the feminine gender and neuter and
vice versa
.
(c)
Severability
: If one or more of the provisions contained in this Subscription Agreement will be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions hereof will not be affected
or impaired thereby. Each of the provisions of this Subscription Agreement is hereby declared to be separate and distinct.
(d)
Subscriber’s Costs
: The Subscriber acknowledges and agrees that all costs incurred by the Subscriber, including any fees
and disbursements of any counsel retained by the Subscriber relating to the purchase and sale of the Purchased Securities issued hereunder
shall be borne by the Subscriber.
(e)
Notices
: All notices or other communications to be given hereunder will be delivered by hand or by e-mail, and if delivered
by hand, will be deemed to have been given on the date of delivery or, if sent by email, on the date of transmission if sent before 5:00
p.m. (Toronto time) and such day is a Business Day or, if not, on the first Business Day following the date of transmission.
Notices to the Company will be addressed to:
Blue Moon Metals Inc.
550 – 220 Bay Street
Toronto, Ontario M5J 2W4
Attention: [*]
Email: [*]
with a copy (which will not constitute notice) to:
Bennett
Jones LLP
3400 One First Canadian Place
Toronto, ON M5X 1A4
Attention : [*] and [*]
Email : [*] and [*]
Notices to the Subscriber will be addressed to the address
of the Subscriber set out on the execution pages hereof.
Either the Company or the Subscriber may change its address
for service aforesaid by notice in writing to the other party hereto specifying its new address for service hereunder.
(f)
Further Assurances
: Each party hereto will from time to time at the request of the other party hereto do such further acts
and execute and deliver such further instruments, deeds and documents as will be reasonably required in order to fully perform and carry
out the provisions of this Subscription Agreement. The parties hereto agree to act honestly and in good faith in the performance of their
respective obligations hereunder.
(g)
Successors and Assigns
: Except as otherwise provided, this Subscription Agreement will enure to the benefit of and will be
binding upon the parties hereto and their respective successors and permitted assigns.
23
(h)
Entire Agreement
: The terms of this Subscription Agreement, the Investor Rights Agreement and the Warrant Certificate express
and constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof, and no implied term
or liability of any kind is created or will arise by reason of anything in this Subscription Agreement, the Investor Rights Agreement
or the Warrant Certificate, as applicable.
(i)
Time of Essence
: Time is of the essence of this Subscription Agreement.
(j)
Amendments
: Neither this Subscription Agreement nor any provision hereof shall be modified, changed, discharged or terminated
except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.
(k)
Survival
: This Subscription Agreement, including without limitation the representations, warranties and covenants contained
herein and in each applicable Schedule, shall survive and continue in full force and effect and be binding upon the Company and the Subscriber,
notwithstanding the completion of the purchase of the Purchased Securities by the Subscriber pursuant hereto, or the subsequent disposition
of the Purchased Securities by the Subscriber.
(l)
Governing Law
: This Subscription Agreement will be governed by and construed in accordance with the laws of the Province of
Ontario and the federal laws of Canada applicable therein and the parties hereto irrevocably attorn to the jurisdiction of the courts
of the Province of Ontario.
(m)
Counterparts and Delivery
: This Subscription Agreement may be executed in two or more counterparts which when taken together
will constitute one and the same agreement. Delivery of counterparts may be effected by PDF, DocuSign, email or other electronic transmission
thereof.
(n)
Electronic Copies
: The Company will be entitled to rely on an electronically scanned PDF, DocuSign, or an emailed copy of an
executed Agreement and acceptance by the Company of such electronic or facsimile subscription will be legally effective to create a valid
and binding agreement between the Subscriber and the Company in accordance with the terms thereof.
(o)
Assignment
: This Subscription Agreement may not be assigned by either party except with the prior written consent of the other
party hereto.
(p)
Language
: The Subscriber acknowledges that it has consented to and requested that all documents evidencing or relating in any
way to the sale of the Purchased Securities be drawn up in the English language only.
Le souscripteur reconnaît par les présentes
avoir consenti et exigé que tous les documents faisant foi ou se rapportant de quelque manière à la vente des bons
de unités soient rédigés en anglais seulement
.
If the foregoing is in accordance with
your understanding, please sign and return this Subscription Agreement together with the other required documents signifying your agreement
to purchase the Purchased Securities.
24
SCHEDULE “A”
United
States Accredited Investor
ANNEX 3 - FORM OF DECLARATION FOR REMOVAL OF
U.S. LEGEND
SCHEDULE “B”
TSX
Venture Exchange Form 4C, Corporate Placee Registration Form
SCHEDULE “C”
FORM OF INVESTOR RIGHTS AGREEMENT
SCHEDULE “D”
CONTACT INFORMATION – PROVINCIAL
AND TERRITORIAL SECURITIES REGULATORY AUTHORITIES

----- ea030911401ex10-2.htm -----
EX-10.2
3
ea030911401ex10-2.htm
INVESTOR RIGHTS AGREEMENT, DATED OCTOBER 16, 2026, BY AND BETWEEN THE ELMET GROUP CO. AND BLUE MOON METALS INC
Exhibit 10.2
INVESTOR
RIGHTS AGREEMENT
THE
ELMET GROUP CO.
and
BLUE
MOON METALS INC.
October
16, 2026
TABLE
OF CONTENTS
ARTICLE
1
INTERPRETATION
1.1
Defined Terms
1
1.2
Rules of Construction
5
1.3
Entire Agreement
6
1.4
Time of Essence
6
1.5
Governing Law and Submission to Jurisdiction
6
1.6
Severability
6
ARTICLE
2
PARTICIPATION
RIGHTS
2.1
Notice of Issuances
7
2.2
Grant of Participation Right
7
2.3
Exercise Notice
7
2.4
Issuance of Offered Securities
8
2.5
Closing of Investor Tranche
9
2.6
Issuances Not Subject to Participation Right
9
ARTICLE
3
BOARD
NOMINATION RIGHTS
3.1
Board Nomination Right
10
3.2
Nomination Procedures
11
3.3
Observer Rights
12
3.4
Replacement
13
3.5
Compensation and Other Matters
14
3.6
Written Consent or Resolution
14
ARTICLE
4
REPRESENTATIONS AND
WARRANTIES
4.1
Representations and Warranties of the Company
14
4.2
Representations and Warranties of the Investor
15
ARTICLE
5
COVENANTS
5.1
Reporting Issuer Status and Listing of Common Shares
16
5.2
No Conflict With Shareholders’ Rights Plan or
Advance Notice By-Law
16
5.3
Subsidiary Security Issuances
16
5.4
Grant of Third Party Participation Rights
17
ARTICLE
6
MISCELLANEOUS
6.1
Termination
17
6.2
Right to Information
17
6.3
Notices
18
6.4
Amendments and Waivers
18
6.5
Assignment
19
6.6
Successors and Assigns
19
6.7
Expenses
19
6.8
Public Disclosure
19
6.9
Confidentiality
19
6.10
Further Assurances
21
6.11
Right to Injunctive Relief
21
6.12
Counterparts
21
-
i
-
INVESTOR
RIGHTS AGREEMENT
THIS
AGREEMENT is dated October 16, 2026 (the “
Effective Date
”),
BETWEEN:
THE
ELMET GROUP CO.
,
a
corporation organized under the laws of Delaware,
(hereinafter
referred to as the “
Investor
”),
-
and -
BLUE
MOON METALS INC.
,
a
corporation existing under the laws of British Columbia,
(hereinafter
referred to as the “
Company
”).
WHEREAS
the Company and the Investor entered into the Letter Agreement (as defined herein), setting forth the terms on which, among other things,
the Investor will make an equity investment in the Company;
AND
WHEREAS
pursuant to the Letter Agreement, the Investor has agreed to subscribe for and purchase 3,500,000 units of the Company (each,
a “
Unit
”) at a price of $10.00 per Unit, each Unit consisting of one Common Share (as defined herein) and one Warrant
(as defined herein) (the “
Equity Investment
”);
AND
WHEREAS
the Company and the Investor will enter into a subscription agreement dated October 16, 2026 in respect of the Equity Investment,
(the “
Subscription Agreement
”);
AND
WHEREAS
, in connection with the Equity Investment, the Company has agreed to grant certain rights set out herein to the Investor,
on the terms and subject to the conditions set out herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES THAT
in consideration of the respective covenants and agreements of the parties herein contained
and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), the parties agree
as follows:
Article 1
INTERPRETATION
1.1
Defined
Terms
(a)
For
the purposes of this Agreement, unless the context otherwise requires, the following terms
shall have the respective meanings set out below and grammatical variations of such terms
shall have corresponding meanings:
“
Act
”
means the
Business Corporations Act
(British Columbia);
“
Affiliate
”
shall have the meaning ascribed to such term in the Act, as in effect on the date of this Agreement;
“
Applicable
Laws
” means with respect to any person, any domestic, foreign, federal, provincial, state, county or municipal or local law,
rule or regulation, including any statute, regulation, rule or subordinate legislation or treaty or common law and any rule, decree,
policy or enactment of any Governmental Authority that is binding or applicable to such person;
“
Board
”
means the board of directors of the Company;
“
Bought
Deal
” means: (a) a fully underwritten offering pursuant to which an underwriter has committed to purchase securities of the
Company pursuant to a “bought deal” letter prior to the filing of a preliminary prospectus or prospectus supplement, as the
case may be; or (b) a distribution pursuant to an overnight marketed offering;
“
Business
Day
” means a day upon which banks are open for business in Vancouver, British Columbia or Toronto, Ontario, other than Saturday,
Sunday or a public holiday;
“
Change
of Control
” means any person, or group of persons acting jointly or in concert, acquiring, whether by take-over bid, plan of
arrangement, merger, amalgamation, scheme, reverse take-over or other similar transaction structure, beneficial ownership of or control
or direction over a majority of the outstanding Common Shares, and for the avoidance of doubt includes any exchange arrangement or cancellation
of Common Shares or other transaction structure which has substantially the same effect as any of the preceding transactions enumerated
in this definition;
“
Common
Shares
” means the common shares in the capital of the Company issued and outstanding from time to time and includes any common
shares that may be issued hereafter;
“
Company
”
shall have the meaning set out in the preamble hereto;
“
Confidential
Information
” shall have the meaning set out in Section 6.9;
“
Consents
”
means all consents, approvals, permits, licences, waivers of rights of first refusal or waivers of due on sale clauses or other waivers,
as applicable, from any party to any contract or any Governmental Authority, in each case, necessary in connection with the execution
of this Agreement or the performance of any terms hereof or any document delivered pursuant hereto or the completion of any of the transactions
contemplated by this Agreement;
“
Constating
Documents
” means, with respect to any person, its articles or certificate of incorporation, amendment, amalgamation or continuance,
memorandum and articles of association, notice of articles, letters patent, supplementary letters patent, by-laws, or articles, partnership
agreement, limited liability corporation or social agreement or other similar document, and all unanimous shareholder agreements, other
shareholder agreements, voting trusts, pooling and/or syndicated agreements and similar contracts, arrangements and understandings applicable
to the person’s securities, all as amended, supplemented, restated and replaced from time to time;
-
2
-
“
Convertible
Securities
” means any security convertible, exchangeable or exercisable for or into, with or without consideration, Common
Shares or other equity or voting securities of the Company, including any warrants, options or other rights issued by the Company and,
for certainty, including any securities issued under any equity incentive compensation arrangements;
“
Dilutive
Issuance
” shall have the meaning set out in Section 2.3(a)(i);
“
Director
Election Meeting
” shall have the meaning set out in Section 3.1(a)(i);
“
Effective
Date
” shall have the meaning set out in the preamble hereto;
“
Exchange
”
means the TSXV or such other stock exchange on which the Common Shares are, at the relevant time, listed for trading;
“
Excluded
Event
” shall have the meaning set out in Section 2.8;
“
Exercise
Notice
” shall have the meaning set out in Section 2.4(a);
“
Governmental
Authority
” means any: (a) multinational, federal, provincial, state, regional, municipal, local or other government, governmental
or public department, ministry, central bank, court, tribunal, arbitral body, bureau or agency, domestic or foreign; (b) subdivision,
agent, commission, board, or authority of any of the foregoing; or (c) quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of the foregoing, including any stock exchange or self-regulatory authority
and, for certainty, the Securities Regulatory Authorities ;
“
Investor
”
shall have the meaning set out in the preamble hereto;
“
Investor
Tranche
” shall have the meaning set out in Section 2.6(c);
“
Issuance
”
shall have the meaning set out in Section 2.1;
“
Letter
Agreement
” means the binding letter agreement dated September 11, 2026, among the Investor, the Company, Blue Moon (Springer)
Inc. and EQ Resources Limited;
“
Notice
Period
” shall have the meaning set out in Section 2.4(a);
“
Offered
Securities
” means any equity or voting securities of the Company or Convertible Securities;
“
Offering
”
shall have the meaning set out in Section 2.1;
“
Offering
Notice
” shall have the meaning set out in Section 2.1;
“
Ownership
Condition
” means that the Investor and its Affiliates collectively hold, directly or indirectly, at least forty percent (40%)
of the Transaction Equity;
-
3
-
“
Ownership
Percentage
” means, at any time, the Investor’s percentage ownership interest in the equity capital of the Company, which
shall be calculated by dividing (y) the number of Common Shares held, directly or indirectly, by the Investor and its Affiliates (excluding
any Common Shares that are issuable upon the exercise, exchange or conversion of Convertible Securities held by the Investor and its
Affiliates), by (z) the total number of Common Shares issued and outstanding at such time (excluding any Common Shares that are issuable
upon the exercise, exchange or conversion of all outstanding Convertible Securities);
“
Participation
Right
” shall have the meaning set out in Section 2.2;
“
person
”
means and includes any individual, company, limited partnership, general partnership, joint stock company, limited liability company,
joint venture, association, company, trust, bank, trust company, pension fund, business trust or other organization, whether or not a
legal entity and any Governmental Authority;
“
Representatives
”
means, in respect of any person, the directors, officers, employees consultants and professional advisors of such person;
“
Reporting
Jurisdictions
” means Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince
Edward Island, Saskatchewan, and the United States of America;
“
Securities
Laws
” means the applicable securities legislation of each of the provinces and territories of Canada, the United States of
America and all published regulations, policy statements, orders, rules, instruments, rulings and interpretation notes issued thereunder
or in relation thereto, as the same may hereafter be amended from time to time or replaced;
“
Securities
Regulatory Authorities
” means the securities regulatory authority of each of the Reporting Jurisdictions and any Exchange;
“
Top-up
Notice
” shall have the meaning set out in Section 2.3(b);
“
Top-up
Offering
” shall have the meaning set out in Section 2.3(c);
“
Top-up
Right
” shall have the meaning set out in Section 2.3(a)(i);
“
Top-up
Shares
” shall have the meaning set out in Section 2.3(a)(i);
“
Top-up
Threshold
” shall have the meaning set out in Section 2.3(a)(ii);
“
Springer
Project
” means the Company’s Springer tungsten project in Pershing County, Nevada, comprised of prospective exploration
grounds, a mine, mill, and an existing ammonium paratungstate plant;
“
Subscription
Agreement
” shall have the meaning set out in the preamble hereto;
“
TEG
Nominee
” shall have the meaning set out in Section 3.1(a)(i);
-
4
-
“
Third
Party Participation Right
” shall have the meaning set out in Section 4.1(f);
“
Transaction
Equity
” means the Common Shares issued to the Investor pursuant to the Subscription Agreement, together with any Common Shares
issued upon exercise of Warrants issued pursuant to the Subscription Agreement, as adjusted for stock splits, consolidations and similar
events;
“
TSXV
”
means the TSX Venture Exchange;
“
Unit
”
shall have the meaning set out in the preamble hereto;
“
Upsize
Notice
” shall have the meaning set out in Section 2.4(b);
“
Upsize
Option
” shall have the meaning set out in Section 2.4(b); and
“
Warrant
”
means a common share purchase warrant of the Company entitling the holder thereof to purchase one Common Share of the Company at a price
of $10.80 per Common Share for a period of 36 months following the date of issuance.
1.2
Rules
of Construction
Except
as may be otherwise specifically provided in this Agreement and unless the context otherwise requires, in this Agreement:
(a)
the
terms “Agreement”, “this Agreement”, “the Agreement”,
“hereto”, “hereof”, “herein”, “hereby”, “hereunder”
and similar expressions refer to this Agreement in its entirety and not to any particular
provision hereof;
(b)
references
to an “Article” or “Section” followed by a number or letter refer
to the specified Article or Section to this Agreement;
(c)
the
division of this Agreement into articles and sections and the insertion of headings are for
convenience of reference only and shall not affect the construction or interpretation of
this Agreement;
(d)
words
importing the singular number only shall include the plural and vice versa and words importing
the use of any gender shall include all genders;
(e)
the
word “including” is deemed to mean “including without limitation”;
(f)
the
terms “party” and “the parties” refer to a party or the parties to
this Agreement;
(g)
any
reference to this Agreement means this Agreement as amended, modified, replaced or supplemented
from time to time;
(h)
any
reference to a statute, regulation or rule shall be construed to be a reference thereto as
the same may from time to time be amended, re-enacted or replaced, and any reference to a
statute shall include any regulations or rules made thereunder;
(i)
all
dollar amounts refer to Canadian dollars;
-
5
-
(j)
any
time period within which a payment is to be made or any other action is to be taken hereunder
shall be calculated excluding the day on which the period commences and including the day
on which the period ends; and
(k)
whenever
any action is required to be taken or period of time is to expire on a day other than a Business
Day, such action shall be taken or period shall expire on the next following Business Day.
1.3
Entire
Agreement
This
Agreement and the Subscription Agreement constitute the entire agreement between the parties with respect to the subject matter hereof
and thereof and supersede all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no conditions,
covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or otherwise, relating
to the subject matter hereof except as provided in the aforesaid agreements.
1.4
Time
of Essence
Time
shall be of the essence of this Agreement.
1.5
Governing
Law and Submission to Jurisdiction
(a)
This Agreement shall be interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Ontario and the federal laws of Canada applicable therein.
(b)
Each of the parties irrevocably and unconditionally: (i) submits to the exclusive jurisdiction of the courts of the Province of Ontario in the City of Toronto over any action or proceeding arising out of or relating to this Agreement; (ii) waives any objection that it might otherwise be entitled to assert to the jurisdiction of such courts; and (iii) agrees not to assert that such courts are not a convenient forum for the determination of any such action or proceeding.
1.6
Severability
If
any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially adverse to either party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.
-
6
-
Article 2
Participation and top-up RightS
2.1
Notice
of Issuances
If
the Company proposes to issue (an “
Issuance
”) any Offered Securities for cash proceeds (excluding cash proceeds realized
by the Company upon the exercise of Convertible Securities) pursuant to a public offering, a private placement, or otherwise (each, an
“
Offering
”) at any time after the date of this Agreement, the Company shall, as soon as possible after the public
announcement of the Offering, but in any event not later than the earlier of: (a) the date on which the Company files a preliminary prospectus,
registration statement or other offering document in connection with an Issuance that constitutes a public offering of Offered Securities;
and (b) seven (7) Business Days prior to the expected completion date of the Issuance, give written notice of the Issuance (the “
Offering
Notice
”) to the Investor that includes full particulars of the Offering, including the number of Offered Securities, the rights,
privileges, restrictions, terms and conditions of the Offered Securities, the per Offered Security consideration for which the Offered
Securities are proposed to be issued under the Offering a detailed summary of the expected use of proceeds of the Offering and the expected
closing date of the Offering. The Offering Notice shall also include the total number of issued and outstanding Common Shares as of the
date of the Offering Notice and copies of any investor presentation, prospectus, registration statement or offering memorandum or similar
disclosure document, subscription agreement and other materials delivered by, or proposed to be delivered by, the Company (or by any
agent or investment dealer acting on behalf of the Company) to potential purchasers under the Offering.
2.2
Grant
of Participation Right
So
long as the Ownership Condition is met, the Investor (directly or through an Affiliate) shall have the right (the “
Participation
Right
”) to subscribe for and to be issued as part of an Offering at the subscription price per Offered Security pursuant to
the Offering and otherwise on substantially the terms and conditions as those offered to the other potential subscribers under the Offering:
(a)
in
the case of an Offering of Common Shares, up to such number of Common Shares that will allow
the Investor to maintain or acquire, as applicable, up to the greater of: (A) an Ownership
Percentage that is the same as the Ownership Percentage that the Investor had immediately
prior to completion of such Offering; and (ii) an Ownership Percentage equal to 9.9%, in
each case after giving effect to the Offering; and
(b)
in
the case of an Offering of Offered Securities (other than Common Shares), up to such number
of Offered Securities that will (after giving effect to such Offering and assuming, for all
purposes of this Section 2.2(b), the conversion, exercise or exchange of all of the convertible,
exercisable or exchangeable Offered Securities issued in connection with the Offering and
issuable pursuant to this Section 2.2) allow the Investor to maintain or acquire, as applicable,
up to the greater of: (i) an Ownership Percentage that is the same as the Ownership Percentage
that the Investor had immediately prior to completion of such Offering; or (ii) an Ownership
Percentage equal to 9.9%, in each case after giving effect to the Offering;
provided
that
, if the Investor is prohibited by Securities Laws or other Applicable Laws or the rules of any applicable stock exchange
from participating on substantially the terms and conditions of the Offering, the Company shall use commercially reasonable efforts to
enable the Investor to participate on terms and conditions that are as substantially similar as circumstances permit. The Investor further
acknowledges and understands that, as a result of the provision to it of the participation rights provided herein, in the event of an
Offering pursuant to a registration statement filed with the U.S. Securities and Exchange Commission, the Investor will not be able to
participate in such registered offering, but will instead be entitled to purchase the securities offered in such Offering in a substantially
contemporaneous private placement, on terms no less favorable, in the aggregate than those offered to investors in the registered offering
(other than in respect of restrictions on transfer under Securities Laws or other Applicable Laws), subject to the execution of customary
documentation in respect thereof.
If
the number of Offered Securities to be issued by the Company pursuant to the Offering (after giving effect to such Offering and assuming,
for all purposes of this Section 2.2, the conversion, exercise or exchange of all of the convertible, exercisable or exchangeable Offered
Securities issued in connection with the Offering and issuable pursuant to this Section 2.2) is less than 2.5% of the outstanding Common
Shares immediately prior to such Offering, then the Investor shall have the right to defer the exercise of the Participation Right to
the date of the next Top-up Notice.
2.3
Top-up
Offering
(a)
Without limiting Section 2.2 and subject to the terms of this Section 2.3:
(i)
the
Investor (directly or through an Affiliate) shall have the right (the “
Top-up Right
”)
to subscribe for and to be issued, in connection with the issuance of Common Shares on the
conversion, exercise or exchange of Convertible Securities or pursuant to any other contract,
agreement or understanding that provides for the issuance of Common Shares excluding contracts
and agreements pursuant to which the Investor has the right to exercise its Participation
right pursuant to Section 2.2 above (e.g., as consideration for acquisitions or the payment
of professional fees, etc.) (a “
Dilutive Issuance
”), up to such number
of Common Shares that will allow the Investor to maintain or acquire, as applicable an Ownership
Percentage that is the same as the Ownership Percentage that the Investor would have had
but for the Dilutive Issuance referenced in the Top-up Notice, after giving effect to such
Dilutive Issuance and as adjusted to account for any exercise, non-exercise, or deferral
of the Participation Right since the date of the last Top-up Notice (the “
Top-up
Shares
”); and
(ii)
the
Top-up Right shall be exercisable from time to time following Dilutive Issuances that result
in the reduction of the Investor’s Ownership Percentage by at least 1.0%, in the aggregate
(the “
Top-up Threshold
”), which shall be calculated by aggregating all
Dilutive Issuances that occurred in each case from the later of (A) the date of this Agreement
and (B) the date of the last Top-up Notice.
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(b)
Subject to Section 2.3(d), within 10 Business Days of the end of each fiscal quarter during which one or more Dilutive Issuances occurred resulting in the Top-up Threshold being achieved, the Company shall deliver a written notice (a “
Top-up Notice
”) to the Investor containing the number of Convertible Securities converted, exercised or exchanged into Common Shares or the number of Common Shares issued pursuant to any other contract, agreement or understanding, and the total number of issued and outstanding Common Shares following such Dilutive Issuances, in each case from the later of: (i) the date of this Agreement; and (ii) the date of the last Top-up Notice.
(c)
If the Investor delivers an Exercise Notice in accordance with Section 2.4, the Company shall, subject to Section 2.5 and in accordance with the provisions of this Article 2, promptly and in any event within 30 days of the date on which the relevant Top-up Notice was delivered, complete an offering to the Investor of the number of Top-up Shares the Investor wishes to subscribe for pursuant to the Top-up Right, as specified in the Exercise Notice, at an offering price per Top-up Share equal to the volume-weighted average trading price of the Common Shares on the Exchange for the five (5) trading days prior to the date the Top-up Notice was delivered to the Investor, subject to, in each case, any required prior approval of the Exchange and Securities Laws (each, a “
Top-up Offering
”) and otherwise on terms and conditions contained in a written subscription agreement in form and substance satisfactory to the Investor and the Company, each acting reasonably. Each Top-up Offering shall be an offering of Common Shares.
(d)
Notwithstanding Section 2.3(a), 2.3(b) or 2.3(c), if a Top-up Threshold is achieved in, or is determined by the Company, acting reasonably, to be likely to be achieved, prior to the end of a fiscal quarter and prior to setting the record date for any meeting of shareholders, the Company shall deliver a Top-up Notice to the Investor and, if the Investor delivers an Exercise Notice in accordance with Section 2.4 in response to a Top-up Notice delivered pursuant to this Section 2.3(d), the Company shall, subject to Section 2.5 and in accordance with the provisions of this Article 2, promptly, and in any event prior to declaring the record date for such shareholder meeting, complete a Top-up Offering to the Investor.
2.4
Exercise
Notice
(a) If
the Investor wishes to exercise the Participation Right or Top-up Right, the Investor shall give written notice to the Company (the “
Exercise
Notice
”) of its intention to exercise such right and of the number of Offered Securities or Top-Up Shares the Investor wishes
to subscribe for and purchase pursuant to the Participation Right or the Top-up Right, as applicable. The Investor shall deliver an Exercise
Notice to subscribe to the Offering or issuance of Top-up Shares, within five (5) Business Days after the date of receipt of an Offering
Notice, or in the case of a public offering that is a Bought Deal, within one (1) Business Day of receipt of an Offering Notice or Upsize
Notice (the “
Notice Period
”), failing which the Investor will not be entitled to exercise the Participation Right
or Top-up Right in respect of such Offering, Issuance or issuance of Top-up Shares.
(b) If
the Company at any time proposes to increase the number of any Offered Securities to be issued in an Offering following the Notice Period
it shall, by notice in writing delivered to the Investor (the “
Upsize Notice
”), give the Investor the option to subscribe
for its
pro rata
share of the additional Offered Securities (the “
Upsize Option
”). The Investor shall be entitled
to exercise the Upsize Option by delivering a new Exercise Notice to the Company. If no new Exercise Notice is delivered by the Investor
to the Company within by the later to occur of three (3) Business Days after the date of receipt by the Investor of the Upsize Notice,
and the date of expiry of the Notice Period (the “
Upsize Notice Period
”), the Exercise Notice of the Investor to be
delivered in respect of the original Offering Notice within the applicable time period set out in Section 2.4(a) shall apply or, where
the Investor delivered an Exercise Notice in respect of the original Offering Notice prior to the expiry of the Upsize Notice Period,
such Exercise Notice so delivered shall continue in full force and effect.
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2.5
Issuance
of Offered Securities and Top-up Shares
(a) If
the Company receives an Exercise Notice from the Investor within the Notice Period or the Upsize Notice Period, then the Company shall,
subject to:
(i)
the
receipt and continued effectiveness of all required approvals (including the approval(s)
of the Exchange and any required approvals under Securities Laws and any shareholder approval
required under Applicable Laws), which approvals the Company shall use all commercially reasonable
efforts to promptly obtain (including by applying for any necessary price protection confirmations,
seeking shareholder approval (if required) in the manner described below, and using its commercially
reasonable efforts to cause management and each member of the Board to vote their Common
Shares and any shares of the Company entitled to vote in the matter and all votes received
by proxy in favour of the issuance of the Offered Securities or the Top-up Shares, as applicable,
to the Investor); and
(ii)
the
completion of the relevant Offering, if applicable,
issue
to the Investor or its nominee, against payment of the subscription price payable in respect thereof by bank draft, certified cheque
or wire transfer, or settlement on a delivery-against-payment basis through a mutually agreed clearing system or other method approved
by the Company, acting reasonably, that number of Offered Securities or Top-up Shares, as applicable, set out in the Exercise Notice.
(b) If
the Company is required by an Exchange or otherwise under Applicable Laws to seek shareholder approval for the issuance of the Offered
Securities or the Top-up Shares, as applicable, to the Investor or its nominee, then the Company shall: (i) call and hold a meeting of
its shareholders to consider the issuance of the Offered Securities or Top-up Shares, as applicable, to the Investor as soon as reasonably
practicable, and in any event such meeting shall be held within 75 days after the date that the Company is first advised by the Exchange
or other applicable Governmental Authority that it will require shareholder approval; and (ii) recommend approval of the issuance
of the Offered Securities or Top-up Shares, as applicable, to the Investor and solicit proxies in support thereof.
2.6
Closing
of Investor Tranche
(a) Without
limiting Section 2.5, this Section 2.6 applies only to the issuance of Offered Securities set out in an Exercise Notice received by the
Company from the Investor in connection with the exercise of the Participation Right and does not apply to any issuance of Top-Up Shares
pursuant to Section
Error! Reference source not found.
.
(b) If
the Company receives an Exercise Notice from the Investor within the Notice Period or the Upsize Notice Period, then the Company shall
reserve for issuance to the Investor or its nominee that number of Offered Securities set out in the Exercise Notice.
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(c) The
issuance of such Offered Securities to the Investor shall occur as a separate tranche of the Offering (the “
Investor Tranche
”)
to be completed within 10 Business Days after the closing of the primary tranche of the Offering (or such other date as the parties may
agree, acting reasonably), subject in each case to the receipt of all required approvals (including the approval(s) of the Exchange and
any required approvals under Securities Laws and any shareholder approval required under Applicable Laws), which approvals the Company
shall use all commercially reasonable efforts to promptly obtain (including by applying for any necessary price protection confirmations,
seeking shareholder approval (if required) in the manner described below, and using its commercially reasonable efforts to cause management
and each member of the Board to vote their Common Shares and any shares of the Company entitled to vote in the matter and all votes received
by proxy in favour of the issuance of the Offered Securities to the Investor).
(d) The
Company shall not reallocate, sell or issue to any other person any of the Offered Securities reserved for the Investor pursuant to Section
2.6(a) unless the Investor fails to complete the Investor Tranche in accordance with this Section 2.6.
(e) The
parties acknowledge that, subject to Section 6.8, the Investor Tranche may be disclosed in a separate press release issued by the Company
following the closing of the primary tranche of the Offering.
2.7
Blackout
Periods
In
relation to any exercise periods for the Investor to elect to exercise the Top-up Right to acquire the Top-up Shares, to the extent that
the Investor is restricted from trading in securities of the Company under Securities Laws or other Applicable Laws, the relevant exercise
period shall be extended until the fifth Business Day following the termination of such restriction.
2.8
Issuances
Not Subject to Participation Right
Notwithstanding
anything to the contrary contained herein, Sections 2.1 to 2.5 will not apply to any Issuances in the following circumstances (each such
Issuance pursuant to paragraphs (a) through (e) of this Section 2.8 being referred to as an “
Excluded Event
”):
(a)
a
rights offering that is made to (and the rights thereunder are exercisable by) to all shareholders
of the Company including the Investor; and
(b)
any
share split, share dividend or capital reorganization of the Company or any subsidiary;
provided
that
the beneficial shareholders of the Company or such subsidiary, as applicable,
and the percentage ownership interest of each beneficial shareholder of the Company or such
subsidiary, as applicable, do not change as a result thereof.
Article 3
BOARD NOMINATION RIGHTS
3.1
Board
Nomination Right
(a)
Subject
to the terms and conditions of this Article 3 and for so long as the Ownership Condition
is met, the Investor shall be entitled to:
(i)
designate
an individual (a “
TEG Nominee
”) to be nominated as a director of the Company
at any meeting of the shareholders of the Company at which directors are to be elected (a
“
Director Election Meeting
”); and
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(ii)
request
that the TEG Nominee be reasonably considered for inclusion on one or more committees of
the Board.
(b)
Subject
to Applicable Laws, the Company shall promptly take all steps as may be necessary to appoint,
within 10 Business Days of the initial TEG Nominee’s nomination, such TEG Nominee to
serve on the Board and any committee thereof until the next Director Election Meeting.
(c)
As
a condition of election or appointment under this Article 3, each TEG Nominee shall, at the
time of election or appointment to the Board:
(i)
meet
the qualification requirements to serve as a director under the Act or any other governing
corporate statute of the Company, Applicable Laws and the rules of the Exchange or any other
stock exchange on which the Common Shares are then listed;
(ii)
must
consent in writing to serve as a director of the Company and must complete a personal information
form, if required, or such other documentation as may be required by any other stock exchange
on which the Common Shares are then listed and obtain clearance from the Exchange in respect
of such TEG Nominee’s personal information form, if required, failing which the Investor
shall nominate a replacement TEG Nominee in accordance with this Article 3, who shall satisfy
the requirements set out in this Section 3.1(a); and
(iii)
have
such skills and experience reasonably consistent with other individuals who hold directorships
on companies listed on the Exchange or any other stock exchange on which the Common Shares
are then listed.
3.2
Nomination
Procedures
As
long as the Investor has the right to designate a TEG Nominee under Section 3.1(a), the Company shall:
(a)
notify
the Investor in writing within five Business Days of the date on which the Company calls
a Director Election Meeting and cause each TEG Nominee to be included in the nominees proposed
for election at each Director Election Meeting; and
(b)
support
the election of each TEG Nominee at the applicable Director Election Meeting in the same
manner as proxies are solicited in favour of, and the Company and Board otherwise support,
the other nominees for election as directors of the Company in connection with the applicable
Director Election Meeting.
The
Investor shall, after consultation with the Company in good faith, advise the Company of the name of each TEG Nominee within five Business
Days after receiving the notice referred to in Section 3.2(a). If the Investor does not advise the Company of the identity of the TEG
Nominee and/or such committees within such period, the Investor will be deemed to have nominated the incumbent TEG Nominee or, if there
is no incumbent TEG Nominee, the Investor will be deemed to have waived its right to nominate a TEG Nominee until the next Director Election
Meeting.
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3.3
Observer
Rights
(a)
If
the TEG Nominee resigns, is not elected, or the seat is otherwise vacant, the Investor may
appoint a non-voting board observer (the "
TEG Observer
") until the seat
is filled by a new TEG Nominee. As a condition of appointment under this Section 3.3, each
TEG Observer shall:
(i)
comply
with the Act or any other governing corporate statute of the Company, Applicable Laws and
the rules of the Exchange or any other stock exchange on which the Common Shares are then
listed, including with respect to material non-public information; and
(ii)
complete
a personal information form, if required, or such other documentation as may be required
by any other stock exchange on which the Common Shares are then listed and obtain clearance
from the Exchange in respect of such TEG Observer’s personal information form, if required,
failing which the Investor shall nominate a replacement TEG Observer in accordance with this
Article 3, who shall satisfy the requirements set out in this Section 3.3.
(b)
the
Company shall:
(i)
provide
the TEG Observer with notice of each meeting of the Board and each committee at the same
time as provided to the members of the Board or the relevant committee, as applicable;
(ii)
provide
the TEG Observer with copies of all materials provided to the Board or any committee (collectively,
“
Board Materials
”) at the same time as provided to the members of the
Board or relevant committee, as applicable; and
(iii)
permit
the TEG Observer to attend (virtually or in person) each meeting of the Board and each committee,
including telephonic or videoconference meetings,
except
with respect to materials which, or attendance at such portions of any such meeting in which, the Board, acting in good faith, determines
that: (i) based on the advice of counsel, the subject matter relates to a transaction, proceeding or matter in which the Investor or
its affiliates or the TEG Observer are or may be interested parties, and where the participation in such portion of any such meeting
by the TEG Observer or access to information relating to the Company would give rise to a conflict of interest between the Investor and/or
the TEG Observer, on the one hand, and the Company, on the other hand; or (ii) such exclusion is necessary to preserve legal privilege,
unless the TEG Observer and the Company have entered into a common interest privilege agreement (provided that any such exclusion under
clause (i) or (ii) above shall only apply to such portion of such material or meeting as is necessary to address the applicable conflict
of interest or preserve such privilege, as applicable).
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(c)
The
TEG Observer shall be a non-voting observer to the Board, entitled to observation rights
at the Board and all committees of directors formed by the Board, and the TEG Observer shall
have the right to receive notice of, and attend at, meetings of the Board (and committees
thereof) and to receive copies of any and all materials sent to directors or committee members.
(d)
The
TEG Observer will not be counted towards determining whether there is quorum for any such
meeting.
(e)
The
TEG Observer may not directly or indirectly appropriate or otherwise participate in or take
advantage of any corporate opportunity of the Company or any of its subsidiaries presented
to the TEG Observer in his or her capacity as the TEG Observer or identified through the
use of Company confidential information.
(f)
The
TEG Observer shall abide by the Company’s written insider trading policies (as the
same may be amended from time to time) and, without limitation, may not trade in securities
of the Company during blackouts applicable to directors as required by the Company’s
written policies that are reasonably available to the TEG Observer.
(g)
The
TEG Observer shall comply with all written policies that are applicable to the directors
of the Company and that are reasonably applicable to the TEG Observer, as the same may be
amended from time to time (provided that any such amendment shall be promptly communicated
to the Observer in writing), as if the TEG Observer was a director of the Company, including,
without limitation, the Company’s Code of Business Conduct and Ethics, Corporate Disclosure
Policy and Insider Trading Policy and the related memoranda relating to insider trading obligations
and the regulation of insider trading (collectively, the “
Policies
”).
The Company shall have delivered copies of all Policies in effect to the TEG Observer prior
to the date of appointment.
(h)
The
TEG Observer shall comply with the confidentiality obligations that are applicable to the
directors of the Corporation (whether under common law or statute) as if the TEG Observer
were a director of the Company; provided, however that the Company acknowledges and agrees
that the TEG Observer, may disclose information obtained by them in their observer capacity
with the Investor.
(i)
For
clarity, the TEG Observer shall not, solely by reason of serving as an observer, be deemed
to be a director, officer, or fiduciary of the Company or any subsidiary and shall have no
duties or liabilities in such capacity, except for the express contractual obligations set
forth in this Agreement.
3.4
Replacement
If
a TEG Nominee ceases to hold office as a director of the Company, whether due to such TEG Nominee’s death, disability, resignation
or removal, the Investor shall, subject to Section 3.1(c), be entitled to nominate an individual to replace the TEG Nominee who has ceased
to hold office, and the Company shall promptly take all steps as may be necessary to appoint, within 10 Business Days of such nomination,
such individual to the Board and consider such individual for any applicable committees (any such succeeding individual shall thereafter
be a TEG Nominee).
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3.5
Compensation
and Other Matters
Each
TEG Nominee shall:
(a)
be
compensated and reimbursed for expenses as Board members on a basis no less favourable than
the basis on which the Company compensates and reimburses other directors of the Company
(other than directors who are officers of the Company); and
(b)
be
entitled to the benefit of directors’ liability insurance and indemnification to the
same extent that the Company provides such insurance and indemnification to the other directors
of the Company.
3.6
Written
Consent or Resolution
The
provisions of this Article 3 applicable to Director Election Meetings shall apply
mutatis mutandis
to any written consent or resolution
of shareholders relating to the election of directors of the Company.
Article 4
Representations and Warranties
4.1
Representations
and Warranties of the Company
The
Company represents and warrants to the Investor as follows and acknowledges and agrees that the Investor is relying on such representations
and warranties to enter into this Agreement:
(a)
the
Company is duly incorporated and organized, and is validly subsisting, under the laws of
the Province of British Columbia and is in material compliance with the filing of all corporate
and similar returns under the laws of that jurisdiction;
(b)
the
Company has all necessary corporate power and authority to enter into this Agreement and
to perform its obligations hereunder;
(c)
all
necessary corporate action has been taken by the Company to authorize the execution and delivery
of this Agreement and the performance of its obligations hereunder;
(d)
this
Agreement has been duly executed and delivered by the Company and (assuming due execution
and delivery by the Investor) constitutes a legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except as that enforcement may be limited
by bankruptcy, insolvency and other similar laws affecting the rights of creditors generally
and except that equitable remedies may be granted only in the discretion of a court of competent
jurisdiction;
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(e)
the
execution and delivery of this Agreement by the Company and the performance by the Company
of its obligations hereunder will not (whether after the passage of time or notice or both)
conflict with, result in a violation or breach of, constitute a default or require any Consent
(other than such as has already been obtained) to be obtained under, or give rise to any
termination rights or payment obligation under, any provision of:
(i)
to
the knowledge of the Company, (A) any judgment, decree, order or award of any Governmental
Authority having jurisdiction over it, or (B) any Applicable Law;
(ii)
any
provision of its Constating Documents or resolutions of the Board (or any committee thereof)
or shareholders; or
(iii)
any
license or registration or any agreement, contract or commitment, written or oral which the
Company is a party or subject to or bound by; and
(f)
as
at the date of this Agreement, except for Hartree Partners, LP and Teck Resources Limited,
no person has any pre-emptive right, participation right or other right to purchase any of
the Common Shares or Convertible Securities of the Company (a “
Third Party Participation
Right
”).
4.2
Representations
and Warranties of the Investor
The
Investor represents and warrants to the Company as follows and acknowledges and agrees that the Company is relying on such representations
and warranties to enter into this Agreement:
(a)
the
Investor is duly organized, and is validly subsisting, under the laws of Delaware and is
in material compliance with corporate filings required under the laws of that jurisdiction;
(b)
the
Investor has all necessary corporate power and authority to enter into this Agreement and
to perform its obligations hereunder;
(c)
all
necessary corporate action has been taken by the Investor to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder;
(d)
this
Agreement has been duly executed and delivered by the Investor and (assuming due execution
and delivery by the Company) constitutes a legal, valid and binding obligation of the Investor,
enforceable against it in accordance with its terms, except as that enforcement may be limited
by bankruptcy, insolvency and other similar laws affecting the rights of creditors generally
and except that equitable remedies may be granted only in the discretion of a court of competent
jurisdiction; and
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(e)
the
execution and delivery of this Agreement by the Investor and the performance by the Investor
of its obligations hereunder will not (whether after the passage of time or notice or both)
conflict with, result in a violation or breach of, constitute a default or require any Consents
(other than such as has already been obtained) to be obtained under, or give rise to any
termination rights or payment obligation under, any provision of:
(i)
to
the knowledge of the Investor, (A) any judgment, decree, order or award of any Governmental
Authority having jurisdiction over it, or (B) any Applicable Law;
(ii)
any
provision of its Constating Documents or resolutions of its board of directors (or any committee
thereof) or shareholders; or
(iii)
any
material license or registration or any material agreement, contract or commitment, written
or oral which the Investor is a party or subject to or bound by.
Article 5
COVENANTS
5.1
Reporting
Issuer Status and Listing of Common Shares
The
Company shall use commercially reasonable efforts to:
(a)
maintain
the Company’s status as a “reporting issuer” not in default under the Securities
Laws in each of the Reporting Jurisdictions; and
(b)
maintain
the listing of the Common Shares on the TSXV, the Toronto Stock Exchange, the Nasdaq Capital
Market, the New York Stock Exchange or another stock exchange acceptable to the Investor,
provided
that
these covenants shall not restrict or prevent the Company from engaging in or completing any transaction which would result
in the Company ceasing to be a “reporting issuer” or the Common Shares ceasing to be listed on the TSXV so long as the holders
of Common Shares receive cash or securities of an entity which is listed on a stock exchange in Canada or such other exchange as may
be agreed upon by the Company and the Investor, or the holders of the Common Shares have approved the transaction.
5.2
No
Conflict With Shareholders’ Rights Plan or Advance Notice By-Law
The
Company covenants and agrees with the Investor that any shareholder rights plan or similar instrument, or advance notice by-law or policy
or similar instrument, adopted by the Company shall not restrict, limit, prohibit or conflict with the exercise by the Investor of its
Participation Right or its Top-up Right.
5.3
Subsidiary
Security Issuances
The
Company shall not, without the prior written consent of the Investor, not to be unreasonably withheld, agree to, undertake or cause,
or permit to occur, any offering, sale, transfer or issuance of any securities of Blue Moon (Springer) Inc. to any person other than
the Company or an Affiliate of the Company. The Company shall cause its Affiliates to conduct their business and affairs in a manner
consistent with, and so as to give full effect to, all of the terms and conditions of this Agreement.
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5.4
Grant
of Third Party Participation Rights
(a) If
the Company grants to any person a Third Party Participation Right, or amends the terms of an existing Third Party Participation Right,
it shall promptly, but no later than five (5) Business Days after granting or amending such Third Party Participation Right, provide
notice of such grant or amendment to the Investor, which notice shall include a copy of the contract or agreement (including any amendments
thereto) pursuant to which the person is entitled to such Third Party Participation Right.
Article 6
MISCELLANEOUS
6.1
Termination
This
Agreement, other than the rights and obligations of the parties under Sections 1.5, 6.7, 6.8, 6.9, 6.10, and 6.11 shall terminate and
the rights and obligations of the parties hereunder shall cease immediately at such time as the Ownership Condition is not met.
6.2
Right
to Information
(a) Subject
to the Company’s obligations and restrictions under Securities Laws, during the term of this Agreement the Company shall provide
the Investor with:
(i)
reasonable
access to the Company’s scientific and technical data, work plans and programs, permitting
information and results of operations in respect of its properties, including but not limited
to newly acquired technical or scientific data in respect of the Springer Project, as soon
as is practical and in any event no less frequently than on a quarterly basis;
(ii)
written
reports (including technical reports) on the status of the Company’s work programs
in respect of its properties as and when such reports are prepared (including all reports
and materials made available to the Company, the Board or any committee of the Board or Company)
and the Investor shall have the right to discuss such reports with management of the Company
and the Company shall use commercially reasonable efforts to respond to reasonable questions
and inquiries from the Investor with respect to the report and the contents thereof;
(iii)
reasonable
access to the Company’s personnel to discuss technical and scientific matters related
to exploration, development, operation, and management of its properties;
(iv)
reasonable
access to the Company’s team and its properties for the purpose of conducting site
visits at dates and times to be agreed upon by the parties; and
(v)
quarterly
updates on the number of drill holes and drill meters completed in the preceding fiscal quarter,
and forecasted drill holes and drill meters for the then current fiscal quarter and subsequent
fiscal quarters as known.
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6.3
Notices
(a) Any
notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person, transmitted
by e-mail or similar means of recorded electronic communication or sent by registered mail, charges prepaid, addressed as follows:
(i)
in
the case of the Investor
:
The
Elmet Group Co.
260 Fore Street, Suite 301
Portland, ME 04101
Attention: [*]
Email: [*]
With
a copy to:
Office
of the General Counsel
E-mail:
[*]
in the case of the Company
:
Blue
Moon Metals Inc.
550 – 220 Bay Street
Toronto, ON, Canada M5J 2W4
Attention:
[*]
E-mail:
[*]
(b) Any
such notice or other communication shall be deemed to have been given and received on the day on which it was delivered or transmitted
(or, if such day is not a Business Day or if delivery or transmission is made on a Business Day after 5:00 p.m. (local time at the place
of receipt), then on the next following Business Day) or, if mailed, on the third Business Day following the date of mailing;
provided
,
however, that if at the time of mailing or within three Business Days thereafter there is or occurs a labour dispute or other event which
might reasonably be expected to disrupt the delivery of documents by mail, any notice or other communication hereunder shall be delivered
or transmitted by means of recorded electronic communication as aforesaid.
(c) Either
party may at any time change its address for service from time to time by giving notice to the other party in accordance with this Section
6.3.
6.4
Amendments
and Waivers
No
amendment or waiver of any provision of this Agreement shall be binding on either party unless consented to in writing by such party.
No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision
of this Agreement constitute a continuing waiver unless otherwise expressly provided.
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6.5
Assignment
No
party may assign any of its rights or benefits under this Agreement, or delegate any of its duties or obligations, except with the prior
written consent of the other party. Notwithstanding the foregoing, the Investor may assign and transfer all of its rights, benefits,
duties and obligations under this Agreement in their entirety, without the consent of the Company, to an Affiliate of the Investor,
provided
that
any such assignee shall, prior to any such transfer, agree to be bound by all of the covenants of the Investor contained
herein and comply with the provisions of this Agreement, and shall deliver to the Company a duly executed undertaking to such effect
in form and substance satisfactory to the Company, acting reasonably.
6.6
Successors
and Assigns
This
Agreement shall enure to the benefit of and shall be binding on and enforceable by and against the parties and their respective successors
or heirs, executors, administrators and other legal personal representatives, and permitted assigns. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Common Shares, to any and all equity securities of any successor
or assign of the Company (whether by merger, arrangement, amalgamation, consolidation, sale of assets or otherwise) which may be issued
in respect of, in exchange for, or in substitution of the Common Shares, in each case as the amounts of such securities outstanding are
appropriately adjusted for any equity dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after
the date of this Agreement.
6.7
Expenses
Except
as otherwise expressly provided in this Agreement, each party will pay for its own costs and expenses incurred in connection with the
negotiation, preparation, execution and performance of this Agreement and the transactions contemplated herein, including the fees and
expenses of legal counsel, financial advisors, accountants, consultants and other professional advisors.
6.8
Public
Disclosure
(a) If
either party (the “
Filing Party
”) is required to issue a press release or make any other disclosure relating to the
subject matter of this Agreement (including the terms hereof), it shall provide a copy to the other party for its information and comment
using its best efforts to ensure it is provided at least three (3) business days prior to release. Any comments that such other party
may make shall not be considered certification of the accuracy of the information in such release or disclosure, or a confirmation by
it that the content of such release or disclosure complies with the rules, policies, by laws and disclosure standards of the applicable
regulatory authorities or stock exchanges. If such other party fails to provide comments within the foregoing time period the Filing
Party may, subject to the following paragraph, make the proposed release or disclosure.
(b) If
any disclosure of information in respect of this Agreement by the Filing Party uses the other party’s name, the Filing Party shall
obtain prior approval of such other party before issuing any press release, other public disclosure or public statement. The foregoing
prohibition shall not apply if disclosure of such other party’s name is, in the written opinion of legal counsel to the Filing
Party, required by applicable public disclosure requirements, however in such a case the Filing Party must provide a copy of the applicable
news release to such other party for comment, using its best efforts to ensure it is provided to such other party at least three (3)
business days prior to release.
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6.9
Confidentiality
(a) Except
as otherwise provided in this Agreement, each party agrees that all information, data and technology disclosed to it by or on behalf
of the other party and any other information that such party receives or acquires from the other party in connection with this Agreement
or the subject matter hereof (“
Confidential Information
”) shall be kept confidential and shall not be disclosed to
any person that is not a party or an Affiliate (including such Affiliate’s representatives) or Representative of a party and shall
only be disclosed to an Affiliate (including such Affiliate’s representatives) or any Representative on a need to know basis in
connection with the permitted use by such party of such Confidential Information,
provided that
such party shall inform
its Affiliates and Representatives of the confidentiality terms of this Section 6.9 and such party shall be responsible for the compliance
with this Section 6.9 by such Affiliates and Representatives. In complying with the foregoing, each party shall, and shall cause its
Affiliates and any Representatives to, use the same degree of care as would be used by a normally prudent person in protecting its own
proprietary and confidential information.
(b) Notwithstanding
the foregoing:
(i)
a
party shall not be required to keep confidential any Confidential Information that is:
(A)
at
the time of the disclosure, through no wrongful act or omission of such party, its Affiliates
or Representatives, part of the public domain;
(B)
at
the time of the disclosure known by such party and such party is not subject to any other
restrictions of confidentiality with respect to such Confidential Information;
(C)
independently
developed by such party without violating such party’s obligations under this Agreement;
or
(D)
lawfully
obtained by such party from a third party that to the knowledge of such party is not subject
to restrictions of confidentiality with respect to such Confidential Information; and
(ii)
each
party shall have the right to disclose Confidential Information:
(A)
to
the extent permitted by this Agreement;
(B)
to
the extent consented to by the other party;
(C)
to
its Affiliates and its Affiliates’ Representatives;
(D)
for
purposes of its and its Affiliates’ public company disclosure obligations,
provided
that
such party complies with its obligations under Section 6.8 to the extent permitted
by Applicable Law;
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(E)
in
the exercise of any of its rights and obligations hereunder; and
(F)
in
legal or arbitration proceedings involving the rights and obligation of a party (which proceedings
shall be kept confidential to the extent permitted by Applicable Law).
(c) The
receiving party will not be in breach of its obligation not to disclose any of the Confidential Information if that disclosure is required
by Applicable Law, a court or arbitral order, award or similar proceedings, or by applicable government or Exchange requirement, practice
or policy,
provided that
the receiving party complies with its obligations under Section 6.8 to the extent permitted by
Applicable Law, and the receiving party co-operates with the disclosing Party in any application, proceedings or other action the disclosing
party may undertake to obtain a protective order or other means of protecting the confidentiality of the Confidential Information required
to be disclosed. Each party will promptly notify the other party of any actual or threatened breach under any of the terms of this Section
6.9 or any unauthorized communication, disclosure or use of any of the Confidential Information of which such party has actual knowledge.
6.10
Further
Assurances
Each
of the parties shall, from time to time hereafter and upon any reasonable request of the other, promptly do, execute, deliver or cause
to be done, executed and delivered all further acts, documents and things as may be required or necessary for the purposes of giving
effect to this Agreement.
6.11
Right
to Injunctive Relief
The
parties agree that any breach of the terms of this Agreement by either party would result in immediate and irreparable injury and damage
to the other party which could not be adequately compensated by damages. The parties therefore also agree that in the event of any such
breach or any anticipated or threatened breach by the defaulting party, the other party shall be entitled to equitable relief, including
by way of temporary or permanent injunction or specific performance, without having to prove damages, in addition to any other remedies
(including damages) to which such other party may be entitled at law or in equity.
6.12
Counterparts
This
Agreement and all documents contemplated by or delivered under or in connection with this Agreement may be executed and delivered in
any number of counterparts (including in electronic form and/or with electronic signatures), with the same effect as if each party had
signed and delivered the same document, and all counterparts shall be construed together to be an original and will constitute one and
the same agreement.
[
Remainder
of page intentionally left blank
;
signature page follows.
]
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IN
WITNESS WHEREOF this Agreement has been executed by the parties on the date first written above.
THE ELMET GROUP CO.
by
/s/ Peter V. Anania
Name:
Peter V. Anania
Title:
Chief Executive Officer
BLUE MOON METALS INC.
by
/s/
Christian Kargl-Simard
Name:
Christian Kargl-Simard
Title:
Chief Executive Officer
Signature Page – Investor Rights Agreement

----- ea030911401ex10-3.htm -----
EX-10.3
4
ea030911401ex10-3.htm
BLUE MOON COMMON SHARE PURCHASE WARRANT
Exhibit 10.3
UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE FEBRUARY 17, 2027. THE WARRANTS
REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO VALUE IF NOT EXERCISED PRIOR TO THE EXPIRY TIME.
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“U.S. SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALES OF THE SECURITIES, (D) IN COMPLIANCE WITH THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS, OR (E) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D)
OR (E), THE COMPANY WILL REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND
APPLICABLE
STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE ‘GOOD DELIVERY’ IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA.
THIS
WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES, BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED STATES
OR A U.S. PERSON UNLESS THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED
STATES” AND U.S. PERSON” ARE DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.
WARRANTS
TO PURCHASE COMMON SHARES
OF BLUE MOON METALS INC.
Warrant
Certificate Number:
Number of Warrants:
2026-01
3,500,000
THIS
IS TO CERTIFY THAT
for value received The Elmet Group Co., 280 Fore Street, Suite 302, Portland, ME 04101 (the “
Warrantholder
”)
has the right to purchase in respect of each whole warrant (“
Warrants
”) represented by this certificate or by a replacement
certificate (in either case this “
Warrant Certificate
”), at any time up to 5:00 p.m. Toronto time, on October 16, 2029
(the “
Expiry Time
”) one fully paid and non-assessable common share (“
Common Shares
” and which term
shall include any shares or other securities to be issued in addition thereto or in substitution or replacement therefor as provided
herein) of Blue Moon Metals Inc. (the “
Corporation
”), a corporation existing under the laws of British Columbia, as
constituted on the date hereof at a purchase price (the purchase price in effect from time to time being called the “
Exercise
Price
”) of $10.80 per Common Share, subject to adjustment as provided herein.
The
Corporation agrees that the Common Shares purchased pursuant to the exercise of the Warrants shall be and be deemed to be issued to the
Warrantholder as of the close of business on the date on which this Warrant Certificate shall have been surrendered and payment made
for such Common Shares as aforesaid.
Nothing
contained herein shall confer any right upon the Warrantholder to subscribe for or purchase any Common Shares at any time after the Expiry
Time and from and after the Expiry Time the Warrants and all rights under this Warrant Certificate shall be void and of no value.
The
above provisions are subject to the following:
1.
Exercise
:
(1)
Cash
Exercise
:
In the event that the Warrantholder desires to exercise the right to purchase
Common Shares conferred hereby, the Warrantholder shall (a) complete to the extent possible
in the manner indicated and execute a subscription form in the form attached as Schedule
A to this Warrant Certificate, (b) surrender this Warrant Certificate to the Corporation
in accordance with section 9 hereof, and (c) pay the amount payable on the exercise of such
Warrants in respect of the Common Shares subscribed for by certified cheque, bank draft or
money order in lawful money of Canada payable to the Corporation or by transmitting same
day funds in lawful money of Canada by wire to such account as the Corporation shall direct
the Warrantholder or indicate that the exercise is a cashless exercise as provided in subsection
1(2) hereof. Upon such surrender and payment as aforesaid, the Warrantholder shall be deemed
for all purposes to be the holder of record of the number of Common Shares to be so issued
and the Warrantholder shall be entitled to delivery of a certificate or certificates representing
such Common Shares or an electronic book entry position representing such Common Shares,
and the Corporation shall cause such certificate or certificates to be delivered to the Warrantholder
at the address specified in the subscription form within three business days after such surrender
and payment as aforesaid. No fractional Common Shares will be issuable upon any exercise
of the Warrants and the Warrantholder will not be entitled to any cash payment or compensation
in lieu of a fractional Common Share. To the extent that the Warrantholder is entitled to
receive on the exercise or partial exercise thereof a fraction of a Common Share, the number
of Common Shares issuable shall be rounded down to the nearest whole Common Share.
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(2)
Cashless
Exercise
: Subject to the provisions of this Warrant Certificate other than those
requiring payment of the Exercise Price in cash, the Warrantholder may elect to exercise
the Warrants in whole or in part by surrendering this Warrant Certificate in the manner specified
in subsection 1(1) hereof in exchange for that number of Common Shares which is equal to
the product of (a) the number of Common Shares issuable upon the exercise of the Warrants
multiplied by (b) a fraction, (i) the numerator of which is the Fair Market Value of a Common
Share determined as of the date of exercise of the Warrants (the “
Exercise Date
”)
less the then Exercise Price and (ii) the denominator of which is the Fair Market Value of
a Common Share determined as of such Exercise Date, with the certificate representing such
Common Shares to be delivered in accordance with subsection 1(1) hereof. For purposes of
this subsection 1(2), “Fair Market Value” shall be equal to the volume weighted
average trading price of the Common Shares on each of the ten trading days prior to the Exercise
Date on the TSX Venture Exchange (the “
TSXV
”) or, if there shall have been
no sales on such exchange on any such trading day, the average of the closing bid and asked
prices on such exchange on such trading day.
(3)
US
Persons
: Notwithstanding any provision in sections 1, 2 or 3 hereof, the Warrants
may not be exercised, in whole or in part, by a U.S. Person or person within the United States
(or on behalf of a U.S. Person or person within the United States) unless registered under
the United States
Securities Act of 1933
, as amended (the “
1933 Act
”)
and applicable state securities laws or unless an exemption from such registration is available.
As used herein, the terms “
United States
” and “
U.S. Person
”
have the meaning assigned to them in Regulation S under the 1933 Act, as set forth in (a)
an opinion of counsel of recognized standing, in form and substance reasonably satisfactory
to the Corporation, delivered by the Warrantholder to the Corporation, or (b) other documentation
reasonably acceptable to the Corporation.
(4)
Limitation
on Exercise of the Warrants
: Notwithstanding anything to the contrary contained in
this Warrant Certificate, the Warrants shall not be exercisable by the Warrantholder, and
the Corporation shall not effect any exercise of the Warrants or otherwise issue any Common
Shares pursuant hereto, to the extent (but only to the extent) that, after giving effect
to such exercise, the Warrantholder or any of its affiliates would beneficially own in excess
of 9.99% (the “
Maximum Percentage
”) of the issued and outstanding Shares
of the Corporation after such exercise. To the extent the above limitation applies, the determination
of whether a Warrant shall be exercised (vis-à-vis other convertible, exercisable
or exchangeable securities owned by the Warrantholder or any of its affiliates) and of which
such securities shall be convertible, exercisable or exchangeable (as among all such securities
owned by the Warrantholder and its affiliates) shall, subject to the Maximum Percentage limitation,
be determined on the basis of the first submission to the Corporation for conversion, exercise
or exchange (as the case may be). No prior inability to exercise a Warrant or to issue Common
Shares pursuant to this subsection 1(4) shall have any effect on the applicability of the
provisions of this Section 1 with respect to any subsequent determination of exercisability.
For purposes of this subsection 1(4), beneficial ownership and all determinations and calculations
(including, without limitation, with respect to calculations of percentage ownership) shall
be determined in accordance with National Instrument 55-104
Insider Reporting Requirements
and Exemptions
. For any reason at any time, upon the written of the Warrantholder, the
Corporation shall within one business day confirm in writing to the Warrantholder the number
of Common Shares then outstanding, including by virtue of any prior conversion or exercise
of convertible or exercisable securities into Common Shares, including, without limitation,
pursuant to the Warrants. Notwithstanding this subsection 1(4), the Warrantholder may waive
this subsection upon written notice to the Corporation, subject to the Warrantholder providing
the Corporation, acting reasonably, with any documents required by the TSX Venture Exchange.
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3
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2.
Partial
Exercise
: The Warrantholder may from time to time subscribe for and purchase any
lesser number of Common Shares than the number of Common Shares expressed in this Warrant
Certificate. In the event that the Warrantholder subscribes for and purchases any such lesser
number of Common Shares prior to the Expiry Time, the Warrantholder shall be entitled to
receive a replacement certificate representing the unexercised balance of the Warrants.
3.
Not
a Shareholder
: The holding of the Warrants shall not constitute the Warrantholder
a shareholder of the Corporation nor entitle the Warrantholder to any right or interest in
respect thereof except as expressly provided in this Warrant Certificate.
4.
Covenants,
Representations and Warranties
: The Corporation hereby represents and warrants that
it is authorized to create and issue the Warrants and covenants and agrees that it will cause
the Common Shares from time to time subscribed for and purchased in the manner provided in
this Warrant Certificate and the certificate or certificates representing such Common Shares
to be issued and that, at all times prior to the Expiry Time, it will reserve and there will
remain unissued a sufficient number of Common Shares to satisfy the right of purchase provided
for in this Warrant Certificate. The Corporation hereby further covenants and agrees that
it will at its expense expeditiously use its best efforts to obtain the listing of such Common
Shares (subject to issue or notice of issue) on each stock exchange or over-the-counter market
on which the Common Shares may be listed from time to time. All Common Shares which are issued
upon the exercise of the right of purchase provided in this Warrant Certificate, upon payment
therefor of the amount at which such Common Shares may be purchased pursuant to the provisions
of this Warrant Certificate, shall be and be deemed to be fully paid and non-assessable shares
and free from all taxes, liens and charges with respect to the issue thereof. The Corporation
hereby represents and warrants that this Warrant Certificate is a valid and enforceable obligation
of the Corporation, enforceable in accordance with the provisions of this Warrant Certificate.
5.
Anti-Dilution
Protection
:
(1)
Definitions
:
For the purposes of this section 5, unless there is something in the subject matter or context
inconsistent therewith, the words and terms defined below shall have the respective meanings
specified therefor in this subsection 5(1):
(a)
“
Adjustment
Period
” means the period commencing on the date of issue of the Warrants and ending
at the Expiry Time;
(b)
“
Current
Market Price
” of the Common Shares at any date means the price per share equal to
the weighted average price at which the Common Shares have traded on the TSXV or, if the
Common Shares are not then listed on TSXV, on such other Canadian or U.S. stock exchange
as may be selected by the directors of the Corporation for such purpose or, if the Common
Shares are not then listed on any Canadian or U.S. stock exchange, in the over-the-counter
market, during the period of any 20 consecutive trading days ending not more than five business
days before such date; provided that the weighted average price shall be determined by dividing
the aggregate sale price of all Common Shares sold on the said exchange or market, as the
case may be, during such 20 consecutive trading days by the total number of Common Shares
so sold; and provided further that if the Common Shares are not then listed on any Canadian
or U.S. stock exchange or traded in the over-the-counter market, then the Current Market
Price shall be determined by a firm of independent chartered accountants selected by the
directors of the Corporation;
(c)
“
director
”
means a director of the Corporation for the time being and, unless otherwise specified herein,
a reference to action “by the directors” means action by the directors of the Corporation
as a board or, whenever empowered, action by any committee of the directors of the Corporation;
and
(d)
“
trading
day
” with respect to a stock exchange or over-the-counter market means a day on
which such stock exchange or market is open for business.
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(2)
Adjustments
:
The Exercise Price and the number of Common Shares issuable to the Warrantholder upon the
exercise of the Warrants shall be subject to adjustment from time to time in the events and
in the manner provided as follows:
(a)
If
at any time during the Adjustment Period the Corporation shall:
(i)
fix
a record date for the issue of, or issue, Common Shares to the holders of all or substantially
all of the outstanding Common Shares by way of a stock dividend;
(ii)
fix
a record date for the distribution to, or make a distribution to, the holders of all or substantially
all of the outstanding Common Shares payable in Common Shares or securities exchangeable
for or convertible into Common Shares;
(iii)
subdivide
the outstanding Common Shares into a greater number of Common Shares; or
(iv)
consolidate
the outstanding Common Shares into a lesser number of Common Shares,
(any
of such events in subclauses 5(2)(a)(i), 5(2)(a)(ii), 5(2)(a)(iii) and 5(2)(a)(iv) above being herein called a “
Common Share
Reorganization
”), the Exercise Price shall be adjusted on the earlier of the record date on which holders of Common Shares are
determined for the purposes of the Common Share Reorganization and the effective date of the Common Share Reorganization to the amount
determined by multiplying the Exercise Price in effect immediately prior to such record date or effective date, as the case may be, by
a fraction:
A.
the
numerator of which shall be the number of Common Shares outstanding on such record date or
effective date, as the case may be, before giving effect to such Common Share Reorganization;
and
B.
the
denominator of which shall be the number of Common Shares which will be outstanding immediately
after giving effect to such Common Share Reorganization (including in the case of a distribution
of securities exchangeable for or convertible into Common Shares the number of Common Shares
that would have been outstanding had such securities been exchanged for or converted into
Common Shares on such date).
To
the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(a) as a result of the fixing by the Corporation
of a record date for the distribution of securities exchangeable for or convertible into Common Shares, the Exercise Price shall be readjusted
immediately after the expiry of any relevant exchange or conversion right to the Exercise Price which would then be in effect based upon
the number of Common Shares actually issued and remaining issuable after such expiry and shall be further readjusted in such manner upon
the expiry of any further such right. Any Warrantholder who has not exercised his right to subscribe for and purchase Common Shares on
or prior to the record date of such stock dividend or distribution or the effective date of such subdivision or consolidation, as the
case may be, upon the exercise of such right thereafter shall be entitled to receive and shall accept in lieu of the number of Common
Shares then subscribed for and purchased by such Warrantholder, at the Exercise Price determined in accordance with this clause 5(2)(a)
the aggregate number of Common Shares that such Warrantholder would have been entitled to receive as a result of such Common Share Reorganization,
if, on such record date or effective date, as the case may be, such Warrantholder had been the holder of record of the number of Common
Shares so subscribed for and purchased.
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(b)
If
at any time during the Adjustment Period the Corporation shall fix a record date for the
issue or distribution to the holders of all or substantially all of the outstanding Common
Shares of rights, options or warrants pursuant to which such holders are entitled, during
a period expiring not more than 45 days after the record date for such issue (such period
being the “
Rights Period
”), to subscribe for or purchase Common Shares or
securities exchangeable for or convertible into Common Shares at a price per share to the
holder (or in the case of securities exchangeable for or convertible into Common Shares,
at an exchange or conversion price per share) at the date of issue of such securities of
less than 95% of the Current Market Price of the Common Shares on such record date (any of
such events being called a “
Rights Offering
”), the Exercise Price shall
be adjusted effective immediately after the record date for such Rights Offering to the amount
determined by multiplying the Exercise Price in effect on such record date by a fraction:
(i)
the
numerator of which shall be the aggregate of
A.
the
number of Common Shares outstanding on the record date for the Rights Offering, and
B.
the
quotient determined by dividing
(1)
either
(a) the product of the number of Common Shares offered during the Rights Period pursuant
to the Rights Offering and the price at which such Common Shares are offered, or, (b) the
product of the exchange or conversion price of the securities so offered and the number of
Common Shares for or into which the securities offered pursuant to the Rights Offering may
be exchanged or converted, as the case may be, by
(2)
the
Current Market Price of the Common Shares as of the record date for the Rights Offering;
and
(ii)
the
denominator of which shall be the aggregate of the number of Common Shares outstanding on
such record date and the number of Common Shares offered pursuant to the Rights Offering
(including in the case of the issue or distribution of securities exchangeable for or convertible
into Common Shares the number of Common Shares for or into which such securities may be exchanged
or converted).
If
by the terms of the rights, options, or warrants referred to in this clause 5(2)(b), there is more than one purchase, conversion or exchange
price per Common Share, the aggregate price of the total number of additional Common Shares offered for subscription or purchase, or
the aggregate conversion or exchange price of the convertible or exchangeable securities so offered, shall be calculated for purposes
of the adjustment on the basis of the lowest purchase, conversion or exchange price per Common Share, as the case may be. Any Common
Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any such calculation.
To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(b) as a result of the fixing by the Corporation
of a record date for the issue or distribution of rights, options or warrants referred to in this clause 5(2)(b), the Exercise Price
shall be readjusted immediately after the expiry of any relevant exchange, conversion or exercise right to the Exercise Price which would
then be in effect based upon the number of Common Shares actually issued and remaining issuable after such expiry and shall be further
readjusted in such manner upon the expiry of any further such right.
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(c)
If
at any time during the Adjustment Period the Corporation shall fix a record date for the
issue or distribution to the holders of all or substantially all of the outstanding Common
Shares of:
(i)
shares
of the Corporation of any class other than Common Shares;
(ii)
rights,
options or warrants to acquire Common Shares or securities exchangeable for or convertible
into Common Shares (other than rights, options or warrants pursuant to which holders of Common
Shares are entitled, during a period expiring not more than 45 days after the record date
for such issue, to subscribe for or purchase Common Shares or securities exchangeable for
or convertible into Common Shares at a price per share (or in the case of securities exchangeable
for or convertible into Common Shares at an exchange or conversion price per share) at the
date of issue of such securities to the holder of at least 95% of the Current Market Price
of the Common Shares on such record date);
(iii)
evidences
of indebtedness of the Corporation; or
(iv)
any
property or assets of the Corporation;
and
if such issue or distribution does not constitute a Common Share Reorganization or a Rights Offering (any of such non-excluded events
being herein called a “
Special Distribution
”), the Exercise Price shall be adjusted effective immediately after the
record date for the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for
the Special Distribution by a fraction:
A.
the
numerator of which shall be the difference between
(1)
the
product of the number of Common Shares outstanding on such record date and the Current Market
Price of the Common Shares on such record date, and
(2)
the
fair value, as determined by the directors of the Corporation, whose determination shall
be subject to the prior approval of the TSXV or, if required, any other stock exchange on
which the Common Shares are then listed, to the holders of Common Shares of the shares, rights,
options, warrants, evidences of indebtedness or property or assets to be issued or distributed
in the Special Distribution, and
B.
the
denominator of which shall be the product obtained by multiplying the number of Common Shares
outstanding on such record date by the Current Market Price of the Common Shares on such
record date.
Any
Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of such calculation.
To the extent that any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(c) as a result of the fixing by the Corporation
of a record date for the issue or distribution of rights, options or warrants to acquire Common Shares or securities exchangeable for
or convertible into Common Shares referred to in this clause 5(2)(c), the Exercise Price shall be readjusted immediately after the expiry
of any relevant exercise, exchange or conversion right to the amount which would then be in effect based upon the number of Common Shares
issued and remaining issuable after such expiry and shall be further readjusted in such manner upon the expiry of any further such right.
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(d)
If
at any time during the Adjustment Period there shall occur:
(i)
a
reclassification or redesignation of the Common Shares, a change of the Common Shares into
other shares or securities or any other capital reorganization involving the Common Shares
other than a Common Share Reorganization;
(ii)
a
consolidation, amalgamation or merger of the Corporation with or into another body corporate
which results in a reclassification or redesignation of the Common Shares or a change of
the Common Shares into other shares or securities; or
(iii)
the
transfer of the undertaking or assets of the Corporation as an entirety or substantially
as an entirety to another corporation or entity;
(any
of such events being called a “
Capital Reorganization
”), after the effective date of the Capital Reorganization the
Warrantholder shall be entitled to receive, and shall accept, for the same aggregate consideration, upon exercise of the Warrants, in
lieu of the number of Common Shares to which the Warrantholder was theretofor entitled upon the exercise of the Warrants, the kind and
aggregate number of shares and other securities or property resulting from the Capital Reorganization which the Warrantholder would have
been entitled to receive as a result of the Capital Reorganization if, on the effective date thereof, the Warrantholder had been the
registered holder of the number of Common Shares which the Warrantholders was theretofore entitled to purchase or receive upon the exercise
of the Warrants. If necessary, as a result of any such Capital Reorganization, appropriate adjustments shall be made in the application
of the provisions of this Warrant Certificate with respect to the rights and interests thereafter of the Warrantholder to the end that
the provisions shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares
or other securities or property thereafter deliverable upon the exercise of the Warrants.
(e)
If
at any time during the Adjustment Period any adjustment or readjustment in the Exercise Price
shall occur pursuant to the provisions of clause 5(2)(a), 5(2)(b) or 5(2)(c) of this Warrant
Certificate, then the number of Common Shares purchasable upon the subsequent exercise of
the Warrants shall be simultaneously adjusted or readjusted, as the case may be, by multiplying
the number of Common Shares purchasable upon the exercise of the Warrants immediately prior
to such adjustment or readjustment by a fraction which shall be the reciprocal of the fraction
used in the adjustment or readjustment of the Exercise Price.
(3)
Rules
:
The following rules and procedures shall be applicable to adjustments made pursuant to subsection
5(2) hereof:
(a)
Subject
to the following clauses of this subsection 5(3), any adjustment made pursuant to subsection
5(2) hereof shall be made successively whenever an event referred to therein shall occur.
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(b)
No
adjustment in the Exercise Price shall be required unless such adjustment would result in
a change of at least one per cent in the then Exercise Price and no adjustment shall be made
in the number of Common Shares purchasable or issuable on the exercise of the Warrants unless
it would result in a change of at least one one-hundredth of a Common Share; provided, however,
that any adjustments which except for the provision of this clause 5(3)(b) would otherwise
have been required to be made shall be carried forward and taken into account in any subsequent
adjustment. Notwithstanding any other provision of subsection 5(2) hereof, no adjustment
of the Exercise Price shall be made which would result in an increase in the Exercise Price
or a decrease in the number of Common Shares issuable upon the exercise of the Warrants (except
in respect of the Common Share Reorganization described in subclause 5(2)(a) hereof or a
Capital Reorganization described in subclause 5(2)(d) hereof).
(c)
No
adjustment in the Exercise Price or in the number or kind of securities purchasable upon
the exercise of the Warrants shall be made in respect of any event described in section 5
hereof if the Warrantholder is entitled to participate in such event on the same terms mutatis
mutandis as if the Warrantholder had exercised the Warrants prior to or on the record date
or effective date, as the case may be, of such event. Any such participation shall be subject
to the prior approval of the TSXV or, if required, any other stock exchange on which the
Common Shares are then listed.
(d)
No
adjustment in the Exercise Price or in the number of Common Shares purchasable upon the exercise
of the Warrants shall be made pursuant to subsection 5(2) hereof in respect of the issue
from time to time of Common Shares pursuant to securities issued pursuant to, or upon the
exercise, exchange or conversion of securities issued pursuant to, compensation plans that
have been approved by the shareholders of the Corporation and any required stock exchange
or issued to management, directors or employees of the Corporation and/or any subsidiary
of the Corporation as consideration for services provided to the Corporation or any subsidiary
and any such issue shall be deemed not to be a Common Share Reorganization, a Rights Offering
nor any other event described in subsection 5(2) hereof. For greater certainty, no adjustment
in the Exercise Price or in the number of Common Shares purchasable upon the exercise of
the Warrants shall be made pursuant to subsection 5(2) hereof in respect of the issue from
time to time of the Common Shares pursuant to this Warrant Certificate.
(e)
If
at any time during the Adjustment Period the Corporation shall take any action affecting
the Common Shares, other than an action described in subsection 5(2) hereof, which in the
opinion of the directors would have a material adverse effect upon the rights of Warrantholders,
either or both the Exercise Price and the number of Common Shares purchasable upon exercise
of Warrants shall be adjusted in such manner and at such time by action by the directors,
in their sole discretion, but subject to the prior written consent of the TSXV or, if required,
any other stock exchange on which the Common Shares are then listed, as may be equitable
in the circumstances. Failure of the taking of action by the directors so as to provide for
an adjustment prior to the effective date of any action by the Corporation affecting the
Common Shares shall be deemed to be conclusive evidence that the directors have determined
that it is equitable to make no adjustment in the circumstances.
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(f)
If
the Corporation shall set a record date to determine holders of Common Shares for the purpose
of entitling such holders to receive any dividend or distribution or any subscription or
purchase rights and shall, thereafter and before the distribution to such holders of any
such dividend, distribution or subscription or purchase rights, legally abandon its plan
to pay or deliver such dividend, distribution or subscription or purchase rights, then no
adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise
of the Warrant shall be required by reason of the setting of such record date.
(g)
In
any case in which this Warrant Certificate shall require that an adjustment shall become
effective immediately after a record date for an event referred to in subsection 5(2) hereof,
the Corporation may defer, until the occurrence of such event:
(i)
issuing
to the Warrantholder, to the extent that the Warrants are exercised after such record date
and before the occurrence of such event, the additional Common Shares or other securities
issuable upon such exercise by reason of the adjustment required by such event; and
(ii)
delivering
to the Warrantholder any distribution declared with respect to such additional Common Shares
or other securities after such record date and before such event;
provided,
however, that the Corporation shall deliver to the Warrantholder an appropriate instrument evidencing the right of the Warrantholder
upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable
upon the exercise of the Warrants and to such distribution declared with respect to any such additional Common Shares issuable on the
exercise of the Warrants.
(h)
In
the absence of a resolution of the directors fixing a record date for a Rights Offering,
the Corporation shall be deemed to have fixed as the record date therefor the date of the
issue of the rights, options or warrants issued pursuant to the Rights Offering.
(i)
If
a dispute shall at any time arise with respect to adjustments of the Exercise Price or the
number of Common Shares purchasable upon the exercise of the Warrants, such disputes shall
be conclusively determined by the auditors of the Corporation or if they are unable or unwilling
to act, by such other firm of independent chartered accountants as may be selected by the
directors and any such determination shall be conclusive evidence of the correctness of any
adjustment made pursuant to subsection 5(2) hereof and shall be binding upon the Corporation
and the Warrantholder.
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(j)
As
a condition precedent to the taking of any action which would require an adjustment pursuant
to subsection 5(2) hereof, including the Exercise Price and the number or class of Common
Shares or other securities which are to be received upon the exercise thereof, the Corporation
shall take any action which may, in the opinion of counsel to the Corporation, be necessary
in order that the Corporation may validly and legally issue as fully paid and non-assessable
shares all of the Common Shares or other securities which the Warrantholder is entitled to
receive in accordance with the provisions of this Warrant Certificate.
(4)
Notice
:
At least 21 days prior to the earlier of the record date or effective date of any event which
requires or might require an adjustment in any of the rights of the Warrantholder under this
Warrant Certificate, including the Exercise Price or the number of Common Shares which may
be purchased under this Warrant Certificate, the Corporation shall deliver to the Warrantholder
a certificate of the Corporation specifying the particulars of such event and, if determinable,
the required adjustment and the calculation of such adjustment. In case any adjustment for
which a notice in this subsection 5(4) has been given is not then determinable, the Corporation
shall promptly after such adjustment is determinable deliver to the Warrantholder a certificate
providing the calculation of such adjustment.
(5)
Share
Transfer Books Closed
: The Corporation shall not be required to deliver certificates
for Common Shares while the register of transfers and share transfer books of the Corporation
are properly closed prior to any meeting of shareholders or for the payment of dividends
or for any other purpose and in the event of the surrender of any Warrant Certificate in
accordance with the provisions hereof and the making of any subscription and payment for
the Common Shares called for thereby during any such period, delivery of certificates for
Common Shares may be postponed for not more than three (3) business days after the date of
the re-opening of said share transfer books; provided, however, that any such postponement
of delivery of certificates shall be without prejudice to the right of the Warrantholder
so surrendering the same and making payment during such period to receive after the share
transfer books shall have been re-opened such certificates for the Common Shares called for,
as the same may be adjusted pursuant to section 5 herein as a result of the completion of
the event in respect of which the transfer books were closed.
6.
Further
Assurances
: The Corporation hereby covenants and agrees that it will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all and
every such other act, deed and assurance as the Warrantholder shall reasonably require for
the better accomplishing and effectuating of the intentions and provisions of this Warrant
Certificate.
7.
Time
of Essence
: Time shall be of the essence of this Warrant Certificate.
8.
Governing
Laws
: This Warrant Certificate shall be construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.
9.
Notices
:
All notices or other communications to be given under this Warrant Certificate shall be delivered
by hand or by email and, if delivered by hand, shall be deemed to have been given on the
delivery date and, if sent by email, on the date of transmission if sent before 5:00 p.m.
on a business day or, if such day is not a business day, on the first business day following
the date of transmission.
Notices
to the Corporation shall be addressed to:
Blue
Moon Metals Inc.
550 – 220 Bay Street
Toronto, Ontario M5J 2W4
Attention:
[*]
Email:
[*]
With
a copy (which will not constitute notice):
Bennett
Jones LLP
3400 One First Canadian Place
Toronto, ON M5X 1A4
Attention
: [*]
Email : [*]
Notices
to the Warrantholder shall be addressed to the address of the Warrantholder set out on the face page of this Warrant Certificate.
The
Corporation and the Warrantholder may change its address for service by notice in writing to the other of them specifying its new address
for service under this Warrant Certificate.
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11
-
10.
Legends
on Common Shares
:
(1)
Canadian
Legends
: Any certificate representing Common Shares issued upon the exercise of the
Warrants prior to the date which is four months and one day after the date hereof will bear
the following legends:
“UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE FEBRUARY 17, 2027.”
And,
if applicable, if issued prior to the date which is four months and one day after the date hereof, will also bear the following legend:
“WITHOUT
PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED
BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE
OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL FEBRUARY 17, 2027.”;
provided
that at any time subsequent to the date which is four months and one day after the date hereof any certificate representing such Common
Shares may be exchanged for a certificate bearing no such legends. The Corporation shall use the best efforts thereof to cause the registrar
and transfer agent to deliver the certificate representing such Common Shares within three business days after receipt of the legended
certificate or certificates.
(2)
US
Legend
:
Any certificate representing Common Shares issued upon the exercise of the
Warrants will bear the following legend:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“U.S. SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND THE SECURITIES REPRESENTED HEREBY MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALES OF THE SECURITIES, (D) IN COMPLIANCE WITH THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS, OR (E) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D)
OR (E), THE COMPANY WILL REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND
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APPLICABLE
STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE ‘GOOD DELIVERY’ IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA.”;
provided,
that if the Common Shares are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation
S, the legend set forth above may be removed by providing an executed declaration to the Company and the registrar and transfer agent
of the Company, in substantially the form set forth as Schedule C hereto (or in such other form as the Company may prescribe from time
to time) and, if requested by the registrar and transfer agent, an opinion of counsel of recognized standing in form and substance reasonably
satisfactory to the Company and its registrar and transfer agent to the effect that such sale is being made in compliance with Rule 904
of Regulation S
;
provided
further, that
if any of the Common Shares are being sold pursuant to Rule 144 under the U.S. Securities Act and in compliance with
any applicable state securities laws, the legend may be removed by delivery to the Company and its registrar and transfer agent of an
opinion reasonably satisfactory to the Company and its registrar and transfer agent to the effect that the legend is no longer required
under applicable requirements of the U.S. Securities Act or applicable state securities laws.
Upon
receipt of the required deliverables specified in this subsection 10(2) in respect of sales pursuant to Rule 904 or Rule 144 under the
U.S. Securities Act of Common Shares being issued to the Warrantholder upon exercise of the Warrants, the Corporation shall use its best
efforts to deliver such Common Shares to the Warrantholder without the U.S. legend set out above.
11.
Lost
Certificate
: If this Warrant Certificate or any replacement hereof becomes stolen,
lost, mutilated or destroyed, the Corporation shall, on such terms as it may in its discretion
impose, acting reasonably, issue and deliver a new certificate, in form identical hereto
but with appropriate changes, representing any unexercised portion of the subscription rights
represented hereby to replace the certificate so stolen, lost, mutilated or destroyed.
12.
Language
:
The parties hereto acknowledge and confirm that they have requested that this Warrant Certificate
as well as all notices and other documents contemplated hereby be drawn up in the English
language. Les parties aux présentes reconnaissent et confirment qu’elles ont exigé
que la présente convention ainsi que tous les avis et documents qui s’y rattachent
soient rédigés en langue anglaise.
13.
Transfer
:
The Warrants are transferable and the term “Warrantholder” shall mean and include
any successor, transferee or assignee of the current or any future Warrantholder . The Warrants
may be transferred by the Warrantholder completing and delivering to the Corporation the
transfer form attached hereto as Schedule B and surrendering this Warrant Certificate to
the Corporation, provided that all such transfers shall be effected in accordance with all
applicable securities laws. If only part of the Warrants evidenced hereby is transferred,
the Corporation will deliver to the Warrantholder and the transferee replacement Warrant
Certificates substantially in the form of this Warrant Certificate.
14.
Successors
and Assigns
: This Warrant Certificate shall enure to the benefit of the Warrantholder
and the successors and assignees thereof and shall be binding upon the Corporation and the
successors thereof.
15.
Currency:
Unless otherwise provided, all dollar amounts referred to in the Warrant Certificate are
in lawful money of Canada.
16.
Email
Signature
: This Warrant may be executed by PDF or other legally permissible electronic
signature, each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same document.
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IN
WITNESS WHEREOF
the Corporation has caused this Warrant Certificate to be signed by an authorized officer as of the 16
th
day of October, 2026.
BLUE MOON METALS INC.
By:
/s/ Christian Kargl-Simard
Name:
Christian Kargl-Simard
Title:
CEO & Director
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SCHEDULE
A
TO: BLUE
MOON METALS INC.
SUBSCRIPTION
FORM
The
undersigned hereby subscribes for _________________ common shares (“
Common Shares
”) of Blue Moon Metals Inc. (the “
Corporation
”)
(or such other number of common shares or other securities to which such subscription entitles the undersigned in lieu thereof or in
addition thereto pursuant to the provisions of the warrant certificate (the “
Warrant Certificate
”) dated the ●
day of October, 2026 issued by the Corporation) at the purchase price of $10.80 per Common Share (or at such other purchase price as
may be in effect under the provisions of the Warrant Certificate) and on and subject to the other terms and conditions specified in the
Warrant Certificate and hereunder and encloses herewith a certified cheque, bank draft or money order in lawful money of Canada payable
to the Corporation or has transmitted same day funds in lawful money of Canada by wire to such account as the Corporation directed the
undersigned in payment of the subscription price.
By
executing this subscription form, the undersigned represents and warrants that the undersigned is:
(1)
the
Original U.S. Purchaser; or
(2)
not
a U.S. Person, or a Person in the United States, and is not acquiring any of the Common Shares
issuable upon the exercise of the Warrants for the account or benefit of, a U.S. Person or
Person in the United States and none of the persons listed above is a U.S. Person or a Person
in the United States other than the Original U.S. Purchaser. For purposes hereof, (a) “
United
States
” means the United States of America, its territories or possessions, any
state thereof or the District of Columbia, (b) a “
U.S. Person
” means any
natural person resident in the United States, any partnership or corporation organized or
incorporated under the laws of the United States, any estate of which any executor or administrator
is a U.S. Person, any trust of which any trustee is a U.S. Person, any agency or branch of
a foreign entity located in the United States, any non-discretionary account or similar account
(other than an estate or trust) held by a dealer or other fiduciary for the benefit or account
of a U.S. Person, any discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized or incorporated, or, if an individual, resident,
in the United States or any partnership or corporation organized or incorporated under the
laws of a country other than the United States if formed by a U.S. Person principally for
the purpose of investing in securities not registered under the United States
Securities
Act of 1933
, as amended and (c) “
Original U.S. Purchaser
” means the
U.S. Person or Person in the United States who purchased the Warrants from the Corporation.
The
undersigned hereby irrevocably directs that the Common Shares be delivered, subject to the conditions set out in this certificate, and
that the said Common Shares be registered as follows:
Name(s) in Full
Address(es) (include postal code)
Number of Common Shares
TOTAL:
_______________________
Please
print full name in which certificate(s) are to be issued. If any of the Common Shares are to be issued to a person or persons other than
the warrantholder, the warrantholder must pay to the Corporation all requisite taxes or other government charges, if any.
DATED
this ______ day of ___________________, 20___.
Signature of Warrantholder
Signature Guaranteed
*
*
If
the Common Shares and the warrants are to be issued to persons other than the registered holder of the warrants, the signature of the
registered holder must be guaranteed by a Canadian Schedule 1 chartered bank, a major trust company in Canada or an eligible guarantor
institution with membership in an approved signature medallion program (STAMP, SEMP, MSP). The guarantor must affix a stamp bearing the
actual words “Signature Guaranteed”. Signature guarantees are not accepted from Treasury Branches, Credit Unions or Caisses
Polulaires unless they are members of the Stamp Medallion Program.
Print Name and Address in full below:
Name
Address
(Include Postal Code)
SCHEDULE
B
FORM
OF TRANSFER
FOR
VALUE RECEIVED the undersigned hereby sells, assigns and transfers the warrants represented by this warrant certificate to:
Name:
Address
(Include Postal Code)
and hereby irrevocably constitutes and appoints
________________________________
(leave this space blank)
as
the attorney of the undersigned with full power of substitution to transfer the warrants on the appropriate register of Blue Moon Metals
Inc.
DATED
this ____ day of ____________________, 20__.
Signature Guaranteed
Signature of Transferor
*
Name of Transferor
*
The
signature of the transferor must correspond in every particular with the surname and the first name(s) or initials shown on the face
of this certificate and the endorsement must be signature guaranteed, in either case, by a Canadian Schedule 1 chartered bank, a major
trust company in Canada or an eligible guarantor institution with membership in an approved signature medallion program (STAMP, SEMP,
MSP). The guarantor must affix a stamp bearing the actual word “Signature Guaranteed”. Signature guarantees are not accepted
from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of the Stamp Medallion Program.
SCHEDULE
C
FORM
OF DECLARATION FOR REMOVAL OF U.S. LEGEND
TO:
Blue
Moon Metals Inc.
AND
TO:
The registrar and transfer agent for the securities of Blue Moon Metals Inc.
The
undersigned (A) acknowledges that the sale of the securities of Blue Moon Metals Inc. (the “
Company
”) to which this
declaration relates is being made in reliance on Rule 904 of Regulation S under the
United States Securities Act of 1933
, as amended
(the “
U.S. Securities Act
”) and (B) certifies that (1) the undersigned is not an “affiliate” (as that
term is defined in Rule 405 under the U.S. Securities Act) of the Company, a “distributor” or an affiliate of “distributor”,
(2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated,
the buyer was outside the “United States”, or the seller and any person acting on its behalf reasonably believed that the
buyer was outside the United States or (b) the transaction was executed on or through the facilities of a “designated offshore
securities market” (as defined in Rule 902 of Regulation S under the U.S. Securities Act) and neither the seller nor any person
acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any
affiliate of the seller nor any person acting on their behalf has engaged or will engage in any “directed selling efforts”
in the United States in connection with the offer and sale of such securities, and (4) the sale is not a transaction, or part of a series
of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme
to evade the registration provisions of the U.S. Securities Act. Unless otherwise specified, terms set forth above in quotation marks
have the meanings given to them by Regulation S under the U.S. Securities Act. The undersigned in making this Declaration acknowledges
that the Company is relying on the contents hereof and hereby agrees to indemnify and hold harmless the Company for any and all liability,
losses, claims and demands in any way related to the subject matter of this Declaration.
DATED
at ___________________ this _________ day of _________, 20___.
By:
X
Name:
Title:
Affirmation
by Seller’s Broker-Dealer
(required for sales under (B)2(b) above)
We
have read the foregoing representations of our customer, ________________(the “
Seller
”) dated
__________, with
regard to our sale, for such Seller’s account, of the securities of the Company described therein, and on behalf of ourselves
we certify and affirm that (A) we have no knowledge that the transaction had been prearranged with a buyer in the United States, (B)
the transaction was executed on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian
Securities Exchange or another “designated offshore securities market”, (C) neither we, nor any person acting on our
behalf, engaged in any “directed selling efforts” in connection with the offer and sale of such securities, and (D) no
selling concession, fee or other remuneration is being paid to us in connection with this offer and sale other than the usual and
customary broker’s commission that would be received by a person executing such transaction as agent. Terms used herein have
the meanings given to them by Regulation S under the U.S. Securities Act.
Name of Firm
By:
X
Authorized officer
Date:

----- ea030911401ex10-4.htm -----
EX-10.4
5
ea030911401ex10-4.htm
THE ELMET GROUP CO. 2026 EMPLOYEE STOCK PURCHASE PLAN
Exhibit 10.4
THE ELMET GROUP CO.
2026 EMPLOYEE STOCK PURCHASE PLAN
The
purpose of this 2026 Employee Stock Purchase Plan (the “
Plan
”) is to provide eligible employees of The Elmet
Group Co., a Delaware corporation (the “
Company
”), and certain of its subsidiaries with opportunities to purchase
shares of the Company’s common stock, $0.001
par value per share (the “
Common Stock
”), commencing
at such time and on such dates as the Board of Directors of the Company (the “
Board
”) shall determine. Subject
to adjustment under Section 15 hereof, the number of shares of Common Stock that have been approved for this purpose is the sum of:
(a) 400,000;
plus
(b) an
annual increase to be added on the first day of each fiscal year, commencing on January 1, 2027
and continuing for each fiscal
year until, and including, January 1, 2036, equal to the lesser of (i) 1% of the issued and outstanding shares of all classes of Company
common stock outstanding on such date, and (ii) a number of shares of Common Stock determined by the Board. No more than 50,000,000 shares
of Common Stock may be issued pursuant to the Plan.
The Plan is intended to qualify as an “employee
stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “
Code
”),
and the regulations issued thereunder, and shall be interpreted in a manner consistent therewith.
1.
Administration
. The
Plan shall be administered by the Board or by a committee appointed by the Board (the “
Administrator
”). The
Administrator has authority to (i) make rules and regulations for the administration of the Plan; (ii) interpret the terms and provisions
of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide all disputes arising in
connection with the Plan; and (v) otherwise supervise the administration of the Plan, and its interpretation and decisions with regard
thereto shall be final and conclusive. No member of the Board of the Administrator, and no officer, employee, or agent acting at the direction
thereof, shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted hereunder.
2.
Eligibility
. All
employees of the Company and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated
by the Administrator from time to time (a “
Designated Subsidiary
”), are eligible to participate in any one or
more of the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan, provided that:
(a) they
are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar
year;
(b) they
have been employed by the Company or a Designated Subsidiary for at least three months prior to the first day of the applicable Plan Period
(as defined below); and
(c) they
are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period.
No employee may be granted
an Option hereunder if such employee, immediately after the Option is granted, would own five percent (5%) or more of the total combined
voting power or value of the capital stock of the Company or any subsidiary. For purposes of the preceding sentence, the attribution
rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock that the employee
has a contractual right to purchase shall be treated as stock owned by the employee.
The Company retains the discretion
to determine which eligible employees may participate in an offering pursuant to and consistent with Treasury Regulation Sections 1.423-2(e)
and (f).
3.
Offerings
. The
Company shall make one or more offerings (“
Offerings
”) to employees to purchase stock under the Plan. Offerings
shall begin at such time and on such dates as the Administrator shall determine, or the first business day thereafter (such dates, the
“
Offering Commencement Dates
”). Each Offering Commencement Date shall begin a six (6)-month period (each, a
“
Plan Period
”) during which payroll deductions shall be made and held for the purchase of Common Stock at the
end of the Plan Period. However, the Administrator may, at its discretion, choose a different Plan Period of not more than twelve (12)
months for Offerings.
4.
Participation
. An
employee eligible on the Offering Commencement Date of any Offering may participate in such Offering by completing and forwarding either
a written or electronic payroll deduction authorization form to the employee’s appropriate payroll office at least 15 days (or such
other number of days as is determined by the Company) prior to the applicable Offering Commencement Date. The form will authorize
a regular payroll deduction from the Compensation (as defined below) received by the employee during the Plan Period. Unless an employee
files a new form or withdraws from the Plan, the employee’s deductions and purchases will continue at the same rate for future Offerings
under the Plan as long as the Plan remains in effect. The Administrator shall determine what constitutes “Compensation” for
the purposes of the Plan. In the absence of a determination by the Administrator, the term “
Compensation
” shall
mean the amount of money reportable on the employee’s Federal Income Tax Withholding Statement (or analogous non-U.S. statement),
including overtime, shift premium, and incentive or bonus awards, but excluding allowances and reimbursements for expenses such as relocation
allowances or travel expenses, income or gains associated with the grant or vesting of restricted stock, income or gains on the exercise
of Company stock options or stock appreciation rights, and similar items, whether or not shown or separately identified on the employee’s
Federal Income Tax Withholding Statement (or analogous non-U.S. statement), but including, in the case of salespersons, sales commissions
to the extent determined by the Administrator.
5.
Deductions
. The
Company shall maintain payroll deduction accounts for all participating employees. With respect to any Offering made under the Plan, an
employee may authorize a payroll deduction in any percentage amount (in whole percentages) at a minimum of one percent (1%) up to a maximum
of fifteen percent (15%) of the Compensation that the employee receives during the Plan Period or such shorter period during which deductions
from payroll are made. The Administrator may, at its discretion, designate a lower maximum contribution rate. The Administrator may likewise,
at its discretion, establish a different minimum payroll deduction percentage from time to time.
6.
Deduction
Changes
. An employee may decrease or discontinue the employee’s payroll deduction once during any Plan
Period, by filing either a written or electronic new payroll deduction authorization form, as determined by the Company. However,
an employee may not increase the employee’s payroll deduction during a Plan Period. If an employee elects to discontinue the
employee’s payroll deductions during a Plan Period, but does not elect to withdraw the employee’s funds pursuant to Section 8
hereof, funds deducted prior to the employee’s election to discontinue will be applied to the purchase of Common Stock on the Exercise
Date (as defined below).
7.
Interest
. Interest
will not be paid on any employee accounts, except to the extent that the Administrator, in its sole discretion, elects to credit
employee accounts with interest at such rate as it may from time to time determine.
8.
Withdrawal
of Funds
. An employee may at any time prior to the close of business on the fifteenth (15
th
) business
day prior to the end of a Plan Period (or such other number of days as is determined by the Company) and for any reason permanently draw
out the balance accumulated in such employee’s account and thereby withdraw from participation in an Offering. Partial withdrawals
are not permitted. The employee may not begin participation again during the remainder of the Plan Period during which the employee withdrew
such balance. The employee may participate in any subsequent Offering in accordance with the terms and conditions established by the Administrator.
9.
Purchase
of Shares
.
(a)
Number
of Shares
. On the Offering Commencement Date for the applicable Plan Period, the Company will grant to each
eligible employee who is then a participant in the Plan an option (an “
Option
”) to purchase on the last business
day of such Plan Period (the “
Exercise Date
”) at the applicable purchase price (the “
Option Price
”)
up to the whole number of shares of Common Stock determined by multiplying $2,083 by the number of full months in the Plan Period and
dividing the result by the closing price (as determined below) on the Offering Commencement Date;
provided
,
however
, that
no employee may be granted an Option which permits the employee’s rights to purchase Common Stock under the Plan and any other employee
stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such Common Stock (determined at the date such Option is granted) for each calendar year in which
the Option is outstanding at any time; and,
provided
,
further
,
however
, that the Administrator may, in its discretion,
set a different fixed number of shares of Common Stock that each eligible employee may purchase per Plan Period, which number shall not
be greater than the number of shares of Common Stock determined using the formula in this Section 9(a), and both of which shall be subject
to the first proviso of this Section 9(a).
2
(b)
Option
Price
. The Administrator shall determine the Option Price for each Plan Period, including whether such Option
Price shall be determined based on the lesser of the closing price of the Common Stock on (i) the first business day of the Plan Period
or (ii) the Exercise Date, or shall be based solely on the closing price of the Common Stock on the Exercise Date;
provided
,
however
,
that such Option Price shall be at least 85% of the applicable closing price. In the absence of a determination by the Administrator,
the Option Price shall be 90% of the lesser of the closing price of the Common Stock on (i) the first business day of the Plan Period
or (ii) the Exercise Date. The closing price shall be (a) the closing price (for the primary trading session) on any national securities
exchange on which the Common Stock is then listed or (b) the average of the closing bid and asked prices in the over-the-counter
market, whichever is applicable, as published in
The Wall Street Journal
or another source selected by the Administrator. If no
sales of Common Stock were made on such a day, the price of the Common Stock shall be the reported price for the last preceding day on
which sales were made.
(c)
Exercise
of Option
. Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed
to have exercised the employee’s Option at the Option Price on such date and shall be deemed to have purchased from the Company
the number of whole shares of Common Stock reserved for the purpose of the Plan that the employee’s accumulated payroll deductions
on such date will pay for, but not in excess of the maximum numbers determined in the manner set forth above.
(d)
Return
of Unused Payroll Deductions
. Any balance remaining in an employee’s payroll deduction account at the
end of a Plan Period shall be automatically refunded to the employee, except that any balance that is less than the purchase price of
one share of Common Stock shall be carried forward into the employee’s payroll deduction account for the following Offering, unless
the employee elects not to participate in the following Offering under the Plan, in which case the balance in the employee’s account
shall be refunded.
10.
Issuance
of Certificates
. Certificates (if applicable) representing shares of Common Stock purchased under the Plan
may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights
of survivorship, or (in the Company’s sole discretion) in the name of a brokerage firm, bank, or other nominee holder designated
by the employee. The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book-entry registration
of shares in lieu of issuing stock certificates.
11.
Rights
on Retirement, Death or Termination of Employment
. If a participating employee’s employment with the
Company or a Designated Subsidiary ends before the last business day of a Plan Period, no payroll deduction shall be taken from any pay
then due and owing to the employee and the balance in the employee’s account shall be paid to the employee. In the event of the
employee’s death before the last business day of a Plan Period, the Company shall, upon notification of such death, pay the balance
of the employee’s account (a) to the executor or administrator of the employee’s estate or (b) if no such executor
or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate.
If, before the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed ceases to be a subsidiary
of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of the Plan. For purposes of the Plan, an employee’s employment
shall be treated as continuing while the employee is on sick leave, military leave or other bona fide leave of absence approved by the
Company, except that, if the period of leave exceeds three (3) months and the employee’s right to reemployment is not guaranteed
by statute or by contract, the employment relationship shall be deemed to have been terminated on the first day immediately following
such three (3)-month period.
12.
Optionees
Not Stockholders
. Neither the granting of an Option to an employee nor the deductions from the employee’s
pay shall make such employee a stockholder of the shares of Common Stock covered by an Option under the Plan unless and until the employee
has purchased and received such shares. Prior to an employee’s purchase of Common Stock, the employee shall not have any of the
rights or privileges of a stockholder. Except as provided in Section 15 or otherwise determined by the Administrator, no adjustments shall
be made for ordinary cash dividends or distributions or other rights for which the record date occurs prior to the date of an employee’s
purchase of Common Stock.
13.
Options
Not Transferable
. Options under the Plan are not transferable by a participating employee other than by will
or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.
14.
Application of
Funds
. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for
any corporate purpose.
15.
Adjustment
for Changes in Common Stock and Certain Other Events.
(a)
Changes
in Capitalization
. In the event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution
to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii)
the share limitations set forth in Section 9, and (iii) the Option Price shall be equitably adjusted to the extent determined by the Administrator.
3
(b)
Reorganization
Events
.
(1)
Definition
. A
“
Reorganization Event
” shall mean: (a) any merger or consolidation of the Company with or into another entity
as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or
other property or is cancelled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other
property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.
(2)
Consequences
of a Reorganization Event on Options
. In connection with a Reorganization Event, the Administrator may take
any one or more of the following actions as to outstanding Options on such terms as the Administrator determines: (i) provide that
Options shall be assumed, or substantially equivalent Options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), (ii) upon written notice to employees, provide that all outstanding Options shall be terminated immediately prior
to the consummation of such Reorganization Event and that all such outstanding Options shall become exercisable to the extent of accumulated
payroll deductions as of a date specified by the Administrator in such notice, which date shall be ten (10) days preceding the effective
date of the Reorganization Event (or such other number of days as is determined by the Administrator), (iii) upon written notice to employees,
provide that all outstanding Options shall be cancelled as of a date prior to the effective date of the Reorganization Event and that
all accumulated payroll deductions will be returned to participating employees on such date, (iv) in the event of a Reorganization
Event under the terms of which holders of Common Stock shall receive upon consummation thereof a cash payment for each share surrendered
in the Reorganization Event (the “
Acquisition Price
”), change the last day of the Plan Period to be the date
of the consummation of such Reorganization Event and make or provide for a cash payment to each employee equal to (A) (1) the Acquisition
Price times (2) the number of shares of Common Stock that the employee’s accumulated payroll deductions as of immediately prior
to the Reorganization Event could purchase at the Option Price, where the Acquisition Price is treated as the fair market value of the
Common Stock on the last day of the applicable Plan Period for purposes of determining the Option Price under Section 9(b) hereof, and
where the number of shares that could be purchased is subject to the limitations set forth in Section 9(a), minus (B) the result of multiplying
such number of shares by such Option Price, (v) provide that, in connection with a liquidation or dissolution of the Company, Options
shall convert into the right to receive liquidation proceeds (net of the Option Price thereof), and (vi) any combination of the foregoing.
For purposes of clause (i)
above, an Option shall be considered assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase,
for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share
of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock);
provided
,
however
,
that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation
(or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration
to be received upon the exercise of Options to consist solely of such number of shares of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) that the Board determines to be equivalent in value (as of the date of such determination or another
date specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.
16.
Amendment
of the Plan
. The Board may, at any time and from time to time, amend or suspend the Plan or any portion thereof,
except that (a) if the approval of any such amendment by the stockholders of the Company is required by Section 423 of the Code,
or by the rules of any national securities exchange on which the Common Stock is then listed, such amendment shall not be effected without
such approval, and (b) in no event may any amendment be made that would cause the Plan to fail to comply with Section 423 of
the Code.
4
17.
Insufficient
Shares
. If the total number of shares of Common Stock specified in elections to be purchased under any Offering
plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan,
the Administrator will allot the shares then available on a pro-rata basis.
18.
Termination
of the Plan
. The Plan may be terminated at any time by the Board. Upon termination of the Plan all amounts
in the accounts of participating employees shall be promptly refunded.
19.
Governmental
Regulations
. The Company’s obligation to sell and deliver Common Stock under the Plan is subject
to listing on a national stock exchange (to the extent the Common Stock is then so listed or quoted) and the approval of all governmental
authorities required in connection with the authorization, issuance or sale of such stock.
20.
Governing
Law
. The Plan shall be governed by Delaware law, except to the extent that such law is preempted by federal
law.
21.
Issuance
of Shares
. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from
shares held in the treasury of the Company, or from any other proper source.
22.
Notification
upon Sale of Shares
. Each employee agrees, by participating in the Plan, to promptly give the Company notice
of any disposition of shares purchased under the Plan where such disposition occurs within two (2) years after the date of grant of the
Option pursuant to which such shares were purchased or within one (1) year after the date on which such shares were purchased.
23.
Grants
to Employees in Foreign Jurisdictions
. The Company may, to comply with the laws of a foreign jurisdiction,
grant Options to employees of the Company or a Designated Subsidiary who are citizens or residents of such foreign jurisdiction (without
regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code))
with terms that are less favorable (but not more favorable) than the terms of Options granted under the Plan to employees of the Company
or a Designated Subsidiary who are resident in the United States. Notwithstanding the preceding provisions of the Plan, employees of the
Company or a Designated Subsidiary who are citizens or residents of a foreign jurisdiction (without regard to whether they are also citizens
of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from eligibility under
the Plan if (a) the grant of an Option under the Plan to a citizen or resident of the foreign jurisdiction is prohibited under the laws
of such jurisdiction or (b) compliance with the laws of the foreign jurisdiction would cause the Plan to violate the requirements of Section
423 of the Code. The Company may add one or more appendices to the Plan describing the operation of the Plan in those foreign jurisdictions
in which employees are excluded from participation or granted less favorable Options.
24.
Authorization
of Sub-Plans
. The Administrator may from time to time establish one or more sub-plans under the Plan with respect
to one or more Designated Subsidiaries, provided that such sub-plan complies with Section 423 of the Code.
25.
Withholding
. If
applicable tax laws impose a tax withholding obligation, each affected employee shall, no later than the date of the event creating the
tax liability, make a provision satisfactory to the Administrator for payment of any taxes required by law to be withheld in connection
with any transaction related to Options granted to or shares acquired by such employee pursuant to the Plan. The Company may, to the extent
permitted by law, deduct any such taxes from any payment of any kind otherwise due to an employee.
26.
Equal
Rights and Privileges
. Subject to Section 23, all employees eligible to participate in the Plan will have equal
rights and privileges under the Plan so that the Plan qualifies as an “employee stock purchase plan” within the meaning of
Section 423 of the Code. Subject to Section 23, any provision of the Plan that is inconsistent with Section 423 of the Code will, without
further act or amendment by the Company, the Board, or the Administrator, be reformed to comply with the equal rights and privileges requirement
of Section 423 of the Code.
27.
No
Right of Employment
. Neither the Plan nor the grant of an Option hereunder shall confer upon any employee any
right to continued employment with the Company or a Designated Subsidiary, nor shall it interfere in any way with the right of the Company
or a Designated Subsidiary to terminate the employment of any of its employees at any time, with or without cause.
28.
Effective
Date and Approval of Stockholders
. The Plan shall take effect upon the day it is approved by the Company’s
shareholders (the “
Effective Date
”).
5