Form 8-K McEwen Mining Inc. For: Jun 21

Exhibit 10.1

 

McEWEN COPPER INC.
(the "Issuer")

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(COMMON SHARES)

 

INSTRUCTIONS TO SUBSCRIBER

 

1.

You must complete all the information in the boxes on page ii and sign where indicated with an "X".

 

2.

You must complete and sign Exhibit "A" - "Canadian Investor Questionnaire" that starts on page  A-1. The purpose of this form is to determine whether you meet the standards for participation in a private placement under applicable Canadian securities laws. In order for the Issuer to satisfy its obligations under applicable Canadian securities laws, you may be required to provide additional evidence to verify the information you have provided in Exhibit "A" - "Canadian Investor Questionnaire" that starts on page A-1.

 

3.

Please make sure that your subscription includes:

 

(a)

a signed copy of this Subscription Agreement.

 

(b)

payment by certified cheque, money order, bank draft, wire transfer or other acceptable means in the amount of the Subscription Amount payable to "McEwen Copper Inc."

 

	Subscription Procedure:
		Completed Subscription Agreement and payment to be delivered to:
		McEwen Copper Inc.
		150 King Street West, S. 2800
		Toronto, ON M5H 1J9
		Attention:	Carmen Diges
		Email:	[email protected]
	Wire Transfer Instructions:
		If paying by wire transfer, wire funds as follows:
		Beneficiary Name: McEwen Copper Inc.
		Beneficiary Address: STE 2800, 150 KING ST W TORONTO, ON M5H 1J9
		Beneficiary Account Number:
		Beneficiary Bank and Address:
		SWIFT:
		Bank Number: 003
		Transit Number: 00002
		Intermediary Bank and Address:
		SWIFT CODE:
		ABA NUMBER:
		SORT CODE //
		Reference: McEwen Copper Inc. – subscription proceeds

 

 

McEWEN COPPER INC.

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees to purchase from McEwen Copper Inc. (the "Issuer") the number of common shares in the capital of the Issuer (each, a "Common Share") on the terms set out in the Investor Term Sheet set out in Exhibit "B" that starts on page B-1. The Subscriber agrees to be bound by the terms and conditions set forth in the attached "Terms and Conditions of Subscription for Common Shares" (the "Terms and Conditions").

 

Subscriber Information				Common Shares to be Purchased
				Number of Common Shares:
(Name of Subscriber)

				Subscription Amount:	US$
	X			(the "Subscription Amount")

(Signature of Authorized Signatory – if the Subscriber is not an Individual)                                    (Name and Title of Authorized Signatory – if the Subscriber is not an Individual)                                     (Subscriber's Address, including postal or zip code)                                                                       (Telephone Number)                                    (Email Address)
		If the Subscriber is subscribing as an agent on behalf of a beneficial purchaser (check the appropriate box):   ¨  the Subscriber is a trust company or trust corporation or a registered adviser acting on behalf of a fully managed account and deemed under applicable securities laws to be purchasing as principal, or   ¨  the following information is true and correct and, as applicable, Exhibit "A" hereto has been completed for each beneficial purchaser:          (Name of Beneficial Purchaser)          (Address of Beneficial Purchaser)          (Beneficial Purchaser's Telephone Number)           (Beneficial Purchaser's E-Mail Address)

 

Register the Common Shares as set forth below:                                    (Name to Appear on Share Certificate)   (Account Reference, if applicable)                                    (Address, including postal or zip code)

Deliver the Common Shares as set forth below:                                    (Attention - Name)   (Account Reference, if applicable)                                    (Street Address, including postal or zip code – no PO Boxes permitted)   (Telephone Number)

 

 

ACCEPTANCE

 

The Issuer hereby accepts the Subscription (as defined herein) on the terms and conditions contained in this private placement subscription agreement (this "Agreement") as of the _____ day of ________________, 2022.

 

McEWEN COPPER INC.
Per:
	Authorized Signatory

 

 

TERMS AND CONDITIONS OF
SUBSCRIPTION FOR COMMON SHARES

 

1.

Subscription

 

1.1            On the basis of the representations and warranties, and subject to the terms and conditions, set forth in this Agreement, the Subscriber hereby irrevocably subscribes for and agrees to purchase the Common Shares for the Subscription Amount shown on page ii of this Agreement (such subscription and agreement to purchase the Common Shares being the "Subscription") by way of a private placement offering (the "Offering"), and the Issuer agrees to sell the Common Shares to the Subscriber, effective upon the Closing Date.

 

2.

Payment

 

2.1            The Subscription Amount must accompany this Subscription and be paid by a certified cheque, money order or bank draft drawn on a Canadian chartered bank or by wire transfer to the Issuer pursuant to the wire instructions provided by the Issuer in the Instructions to Subscriber on page i. The Subscriber authorizes the Issuer to treat the Subscription Amount as an interest free loan until the closing of the Offering (the "Closing").

 

2.2            The Subscriber acknowledges and agrees that this Agreement, the Subscription Amount and any other documents delivered in connection herewith will be held by or on behalf of the Issuer. In the event that this Agreement is not accepted by the Issuer for whatever reason, which the Issuer expressly reserves the right to do, the Issuer will return the Subscription Amount (without interest thereon) to the Subscriber at the address of the Subscriber as set forth on page ii of this Agreement, or as otherwise directed by the Subscriber, in writing, to the Issuer, prior to the return of the Subscription Amount by the Issuer.

 

3.

Documents Required from Subscriber

 

3.1          The Subscriber must complete, sign and return to the Issuer the following documents:

 

(a)

this Agreement;

 

(b)

the Canadian Investor Questionnaire (the "Questionnaire") attached as Exhibit "A" that starts on page A-1, along with any additional evidence that may be requested by the Issuer to verify the information provided in the Questionnaire; and

 

(c)

such other supporting documentation that the Issuer may request to establish the Subscriber's eligibility to participate in the Offering.

 

The Subscriber acknowledges and agrees that the Issuer will not consider the Subscription for acceptance unless the Subscriber has provided all of such documents to the Issuer.

 

3.2          As soon as practicable upon any request by the Issuer, the Subscriber will complete, sign and return to the Issuer any additional documents, questionnaires, notices and undertakings the Issuer may reasonably require or otherwise, may be required by any regulatory authorities or applicable laws.

 

 

4.

Conditions and Closing

 

4.1            The closing date (the "Closing Date") on such date as may be determined by the Issuer in its sole discretion. The Issuer may, at its discretion, elect to close the Offering in one or more closings, in which event the Issuer may agree with one or more purchasers (including the Subscriber) to complete delivery of the Common Shares to such purchaser(s) against payment therefor at any time on or prior to the Closing Date.

 

4.2            The Closing is conditional upon and subject to:

 

(a)

the Issuer having obtained any necessary approvals and consents for the Offering; and

 

(b)

the issue and sale of the Common Shares being exempt from the requirement to file a prospectus and the requirement to deliver an offering memorandum under applicable securities laws relating to the sale of the Common Shares, or the Issuer having received such orders, consents or approvals as may be required to permit such sale without the requirement to file a prospectus or deliver an offering memorandum.

 

4.3            The Subscriber acknowledges that the original share certificates representing the Common Shares ("Certificates") will be held by the Issuer in the Issuer's minute book. The Issuer will deliver electronic copies of the Certificates to the Subscriber within seven business days of the Closing Date, provided that the Subscriber has satisfied the requirements of Section 3.1 hereof and the Issuer has accepted this Agreement.

 

5.

Acknowledgements and Agreements of the Subscriber

 

5.1            The Subscriber acknowledges and agrees that:

 

(a)

no prospectus has been filed by the Issuer with any securities commission or any other regulatory authority in connection with the issuance of the Common Shares;

 

(b)

the Subscriber has not received, nor has the Subscriber requested nor had any need to receive, or been provided with a prospectus, offering memorandum or any document purporting to describe the business and affairs of the Issuer which has been prepared for review by prospective purchasers to assist in making an investment decision in respect of the Common Shares and that the Subscriber's decision, or, if applicable, the decision of others for whom the undersigned is contracting hereunder, to enter into this Agreement and to purchase the Common Shares from the Issuer is based entirely upon this Agreement and publicly available information concerning the Issuer and not upon any other verbal or written representation as to fact or otherwise made by or on behalf of the Issuer;

 

(c)

the Issuer's constating documents contain restrictions on the transfer of the Common Shares, which provide that no Common Shares may be transferred without the prior approval of the board of directors of the Issuer;

 

(d)

the Issuer is not a "reporting issuer" as that term is defined in applicable Canadian securities laws, nor will it become a reporting issuer in any jurisdiction in Canada or elsewhere upon completion of the Offering and, as a result:

 

(i)

unless the Issuer becomes a reporting issuer at a later date, the Issuer will not be subject to the continuous disclosure requirements of any securities laws, including any requirement relating to the production and filing of audited financial statements or other financial information, and

 

 

(ii)

any applicable hold periods under applicable securities laws may never expire, and the Common Shares may be subject to restrictions on resale for an indefinite period of time;

 

(e)

the issuance of the Common Shares will be made pursuant to exemptions from the registration and prospectus requirements of applicable Canadian securities laws and therefore:

 

(i)

the Subscriber is restricted from using most of the civil remedies available under applicable securities laws,

 

(ii)

the Subscriber may not receive information about the Issuer that would otherwise be required to be provided to it under applicable securities laws,

 

(iii)

the Issuer is relieved from certain obligations that would otherwise apply under applicable securities laws,

 

(iv)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares,

 

(v)

there is no government or other insurance covering the Common Shares, and

 

(vi)

there are risks associated with the purchase of the Common Shares, including that the Subscriber may lose the Subscriber's entire investment;

 

(f)

an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Common Shares;

 

(g)

any subscription monies paid by the Subscriber for the Common Shares is being raised as "seed" or "risk" capital for the Issuer, which is in a speculative stage, and there is no market for the Common Shares whatsoever;

 

(h)

none of the Common Shares have been or will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or under any securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to any U.S. Person (as defined in Section 6.2) except in accordance with the provisions of Regulation S under the 1933 Act ("Regulation S"), pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, and in each case only in accordance with any other applicable state, provincial and foreign securities laws;

 

(i)

the Issuer has not undertaken, and will have no obligation, to register any of the Common Shares under the 1933 Act or any other securities laws;

 

(j)

the Issuer will refuse to register the transfer of any of the Common Shares to a U.S. Person not made pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act, and in each case will only register such transfer in accordance with applicable laws;

 

 

(k)

it will hold harmless the Issuer from any loss or damage it may suffer as a result of the Subscriber's failure to correctly complete this Agreement or the Questionnaire;

 

(l)

it and its advisor(s) have had a reasonable opportunity to ask questions of, and receive answers from, the Issuer in connection with the distribution of the Common Shares hereunder, and to obtain additional information, to the extent possessed or obtainable by the Issuer without unreasonable effort or expense;

 

(m)

the books and records of the Issuer were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at the Issuer's principal place of business, and all documents, records and books in connection with the distribution of the Common Shares hereunder have been made available by the Issuer for inspection by the Subscriber, its legal counsel and/or its advisor(s) if requested by the Subscriber;

 

(n)

any resale, assignment, transfer, hypothecation or pledge of any of the Common Shares by the Subscriber will be subject to: (i) resale restrictions contained in the securities laws applicable to the Issuer, the Subscriber and any proposed transferee; and (ii) the Issuer's constating documents and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with such restrictions before selling any of the Common Shares;

 

(o)

it consents to the placement of a legend or legends on the Certificates and any other document evidencing any of the Common Shares setting forth the restrictions on transferability and sale thereof contained in this Agreement, including the following:

 

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE CONSTATING DOCUMENTS OR UNANIMOUS SHAREHOLDER AGREEMENT OF THE COMPANY.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED HEREBY MUST NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (I) [insert Closing Date] AND (II) THE DATE THAT THE COMPANY BECOMES A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY IN CANADA.";

 

(p)

it has been advised to consult its own legal, tax and other advisors with respect to the Offering and the risks of an investment in the Common Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Issuer is not in any way responsible) for compliance with:

 

(i)

any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Common Shares hereunder, and

 

(ii)

any applicable resale restrictions;

 

 

(q)

there may be material tax consequences to the Subscriber of an acquisition or disposition of the Common Shares and the Issuer gives no opinion and makes no representation to the Subscriber with respect to the tax consequences to the Subscriber under federal, state, provincial, local or foreign tax laws that may apply to the Subscriber's acquisition or disposition of any of the Common Shares;

 

(r)

the Issuer is relying on one of the "Accredited Investor" exemption or the "Minimum Amount Investment" exemption from the prospectus requirements as set out in National Instrument 45-106 – Prospectus Exemptions ("NI 45-106") adopted by the Canadian Securities Administrators or subsection 73.4(2) of the Securities Act (Ontario), as applicable, which, among other restrictions, impose: (i) a transfer restriction on the Common Shares to the effect that, for so long as the Issuer is not a reporting issuer, the Common Shares are subject to restrictions on transfer that are contained in the Issuer's constating documents; and (ii) a requirement to legend the Certificates representing the Common Shares to reflect such transfer restriction;

 

(s)

there is no market for any of the Common Shares and no market for any of the Common Shares may ever exist;

 

(t)

the Issuer intends to grant a 1.25% net smelter return royalty in favour of McEwen Mining Inc. as provided for in Exhibit “B” to this Agreement, and the Subscriber agrees and accepts this term as a condition of the acceptance of its subscription by the Issuer; and

 

(u)

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Issuer and the Issuer reserves the right to reject this Subscription for any reason.

 

6.

Representations and Warranties of the Subscriber

 

6.1            The Subscriber hereby represents and warrants to the Issuer (which representations and warranties will survive the Closing) that:

 

(a)

the Subscriber is not a U.S. Person;

 

(b)

the Subscriber is resident in the jurisdiction set out on page ii of this Agreement;

 

(c)

if the Subscriber is resident outside of Canada:

 

(i)

the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws having application in the jurisdiction in which the Subscriber is resident (the "International Jurisdiction") which would apply to the offer and sale of the Common Shares,

 

(ii)

the Subscriber is acquiring the Common Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to acquire the Common Shares under the applicable laws of the International Jurisdiction without the need to rely on any exemptions,

 

(iii)

the applicable laws of the authorities in the International Jurisdiction do not require the Issuer to make any filings or seek any approvals of any kind from any securities regulator in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Common Shares,

 

 

(iv)

the acquisition of the Common Shares by the Subscriber does not trigger:

 

(A)

any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase, in the International Jurisdiction, or

 

(B)

any continuous disclosure reporting obligation of the Issuer in the International Jurisdiction, and

 

(v)

the Subscriber will, if requested by the Issuer, deliver to the Issuer a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv), above, to the satisfaction of the Issuer, acting reasonably;

 

(d)

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;

 

(e)

the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

 

(f)

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;

 

(g)

the Subscriber has received and carefully read this Agreement;

 

(h)

the Subscriber acknowledges receipt of a copy of the unanimous shareholder agreement of the Issuer and acknowledges that it is a condition of becoming a shareholder of the Issuer that the Subscriber must become a party to such unanimous shareholder agreement;

 

(i)

the Subscriber is aware that an investment in the Issuer is speculative and involves certain risks, including the possible loss of the entire investment;

 

(j)

the Subscriber has made an independent examination and investigation of an investment in the Common Shares and the Issuer and agrees that the Issuer will not be responsible in any way for the Subscriber's decision to invest in the Common Shares and the Issuer;

 

(k)

the Subscriber is not an underwriter of, or dealer in, any of the Common Shares, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Common Shares;

 

 

(l)

the Subscriber is not aware of any advertisement of any of the Common Shares and is not acquiring the Common Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

(m)

no person has made to the Subscriber any written or oral representations:

 

(i)

that any person will resell or repurchase any of the Common Shares,

 

(ii)

that any person will refund the purchase price of any of the Common Shares, or

 

(iii)

as to the future price or value of any of the Common Shares; and

 

(n)

other than as provided in the term sheet attached as Exhibit “B” to this Agreement, there is no person acting or purporting to act in connection with the Offering who is entitled to any brokerage or finder's fee payable by the Issuer. If any person establishes a claim that any fee or other compensation is payable by the Issuer in connection with this subscription for the Common Shares, the Subscriber or any beneficial purchaser for whom the undersigned is acting covenants to indemnify and hold harmless the Issuer with respect thereto and with respect to all costs reasonably incurred in the defence thereof.

 

6.2            In this Agreement, the term "U.S. Person" has the meaning ascribed thereto in Regulation S, and for the purpose of this Agreement includes: (i) any person in the United States; (ii) any natural person resident in the United States; (iii) any partnership or corporation organized or incorporated under the laws of the United States; (iv) any partnership or corporation organized outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (v) any estate or trust of which any executor, administrator or trustee is a U.S. Person.

 

7.	Representations and Warranties will be Relied Upon

 

7.1           The Subscriber acknowledges that its representations and warranties contained herein and in the Questionnaire are made by it with the intention that such representations and warranties will be relied upon by the Issuer in determining the Subscriber's eligibility to purchase the Common Shares under applicable laws, or (if applicable) the eligibility of others on whose behalf the Subscriber is contracting hereunder to purchase the Common Shares under applicable laws. The Subscriber further agrees that, as at the Closing, it will be representing and warranting that its representations and warranties contained herein and in the Questionnaire are true and correct as at the Closing with the same force and effect as if they had been made by the Subscriber on the Closing, and that they will survive the purchase by the Subscriber of the Common Shares and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of the Common Shares.

 

 

8.

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

8.1           The Issuer hereby represents and warrants to the Subscriber (which representations and warranties will survive the Closing) that:

 

(a)

the Issuer is validly subsisting under the laws of its jurisdiction of incorporation, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and shall carry on its business in the ordinary course and in compliance in all material respects with all applicable laws, rules and regulations of each such jurisdiction;

 

(b)

on the Closing Date, the Issuer will have taken all corporate steps and proceedings necessary to approve the transactions contemplated under this Subscription Agreement, including its execution and delivery;

 

(c)

the Issuer has not received notice from any applicable regulatory authority that it is in default of any Securities Laws material to the Subscriber;

 

(d)

at the time of closing on the Closing Date, the Common Shares will be duly and validly created, authorized and issued; will be validly issued as fully paid as non-assessable Common Shares in the capital of the Issuer;

 

(e)

the issuance and sale of the Common Shares by the Issuer does not and will not constitute a breach of or default under the constating documents of the Issuer or any law, regulation, order or ruling applicable to the Issuer or any agreement, contract or indenture to which the Issuer is a party or by which it is bound; and

 

(f)

this Subscription Agreement, when signed by the Corporation, constitutes a binding and enforceable obligation of the Corporation, enforceable in accordance with its terms.

 

9.

Waiver

 

9.1           The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber may be entitled in connection with the distribution of any of the Common Shares.

 

10.

Pooling or Escrow of COMMON Shares and Power of Attorney

 

10.1         The Subscriber acknowledges that the Issuer is not currently a reporting issuer in any jurisdiction. If the Issuer completes an initial public offering that results in the Common Shares or other securities in the capital of the Issuer becoming listed on a stock exchange in Canada or the United States of America, or the Issuer completes a reverse takeover, statutory merger or amalgamation, arrangement, share exchange, business combination or other similar transaction which results in a class of shares of the issuer resulting from such transaction being listed (the "Resulting Issuer") on a stock exchange in Canada or the United States of America and the shareholders of the Issuer receiving such listed securities of the Resulting Issuer and/or cash in exchange for their Common Shares (in each case, a "Liquidity Event"), the Common Shares may be required to be pooled or escrowed, either at the request of the Issuer's selling agent or underwriter in connection with the Liquidity Event, or pursuant to the rules of any stock exchange, securities commission or other securities regulatory authority having jurisdiction, and the Subscriber agrees to sign any such pooling or escrow agreement and abide by any such restrictions as may be so imposed.

 

 

10.2            In furtherance of the covenant in Section 10.1, the Subscriber hereby irrevocably appoints the Chief Executive Officer or the President of the Issuer, as exists at the applicable time (in any case, the "President"), as the Subscriber's attorney-in-fact, and authorizes the President as the Subscriber's attorney-in-fact, with full power and authority in the Subscriber's place and stead, to approve and sign any pooling or escrow agreement, or any other document, on behalf of the Subscriber as the Issuer advises may be required to provide for pooling or escrow of the Common Shares, or the approval and completion of any Liquidity Event, as the case may be, in the event of a Liquidity Event or other transaction pursuant to which the Issuer may become listed, directly or indirectly, on any stock exchange. This 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 by the Subscriber. This power of attorney and other rights and privileges granted hereunder will survive any legal or mental incapacity, dissolution, bankruptcy or death of the Subscriber. This power of attorney extends to the heirs, executors, administrators, other legal representatives and successors, transferees and assigns of the Subscriber. Any person dealing with the Issuer may conclusively presume and rely upon the fact that any document, instrument or agreement executed by the President pursuant to this power of attorney is authorized and binding on the Subscriber, without further inquiry. The Subscriber (on its own behalf and, if applicable, on behalf of each beneficial purchaser on whose behalf it is contracting) agrees to be bound by any representations or actions made or taken by the President pursuant to this power of attorney, and waives any and all defences that may be available to contest, negate or disaffirm any action of the President taken in good faith under this power of attorney.

 

11.

Collection of Personal Information

 

11.1         The Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber's personal information for the purpose of fulfilling this Agreement and completing the Offering. The Subscriber acknowledges that its personal information (and, if applicable, the personal information of any person on whose behalf the Subscriber is contracting hereunder) may be included in record books in connection with the Offering and may be disclosed by the Issuer to: (i) stock exchanges or securities regulatory authorities; (ii) the Issuer's registrar and transfer agent; (iii) Canadian tax authorities; (iv) authorities pursuant, among other legislation, to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and (v) any other parties involved in the Offering, including the Issuer's Counsel. By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber's personal information (and, if applicable, the personal information of any other person on whose behalf the Subscriber is contracting hereunder) for the foregoing purposes and to the retention of such personal information for as long as permitted or required by applicable laws. Notwithstanding that the Subscriber may be purchasing the Common Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal has in the Issuer, all as may be required by the Issuer in order to comply with the foregoing. Furthermore, the Subscriber is hereby notified that:

 

(a)

the Issuer may deliver to any securities commission having jurisdiction over the Issuer, the Subscriber or this Subscription, including any Canadian provincial securities commissions, the United States Securities and Exchange Commission and/or any state securities commissions (collectively, the "Commissions"), certain personal information pertaining to the Subscriber, including the Subscriber's full name, residential address and telephone number, the number of securities of the Issuer owned by the Subscriber, the number of Common Shares purchased by the Subscriber, the total Subscription Amount paid, the prospectus exemption relied on by the Issuer and the date of distribution of the Common Shares;

 

(b)

such information is being collected indirectly by the Commissions under the authority granted to them in applicable securities laws;

 

 

(c)

such information is being collected for the purposes of the administration and enforcement of applicable securities laws; and

 

(d)

in Ontario, the Administrative Support Clerk, Suite 1903, Box 55, 20 Queen Street West, Toronto ON, M5H 3S8, Telephone: (416) 593-3684 in the public official who can answer questions about the collection of personal information.

 

12.

Costs

 

12.1         The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any legal counsel or tax or financial advisors retained by the Subscriber) relating to the purchase of the Common Shares will be paid by the Subscriber.

 

13.

Delivery of Subscription Agreement

 

13.1         The Issuer and the Issuer's Counsel will be entitled to rely on delivery by DocuSign or other means of electronic communication of an executed copy of this Agreement, and acceptance by the Issuer of such copy will be equally effective to create a valid and binding agreement between the Subscriber and the Issuer in accordance with the terms hereof. If less than a complete copy of this Agreement is delivered to the Issuer or the Issuer's Counsel prior to or at Closing, the Issuer and the Issuer's Counsel are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered prior to or at Closing as written herein, unaltered.

 

13.2         The Subscriber hereby authorizes the Issuer to correct any minor errors in, or complete any minor information missing from, any part of this Agreement and any other acknowledgements, provisions, forms, certificates or documents executed by the Subscriber and delivered to the Issuer or the Issuer's Counsel in connection with the Subscription.

 

14.

Beneficial Subscribers

 

14.1         Whether or not explicitly stated in this Agreement, any acknowledgement, representation, warranty, covenant or agreement made by the Subscriber in this Agreement, including the exhibits and appendices hereto, will be treated as if made by the disclosed principal, if any.

 

15.

Governing Law

 

15.1         This Agreement and all matters related hereto or arising herefrom are governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial or undisclosed purchaser for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Alberta in all matters related to, or arising from, this Agreement.

 

16.

Survival

 

16.1         This Agreement, including the representations, warranties and covenants contained herein, will survive and continue in full force and effect and be binding upon the Issuer and the Subscriber, notwithstanding the completion of the purchase of the Common Shares by the Subscriber.

 

 

17.

Assignment

 

17.1         This Agreement is not transferable or assignable.

 

18.

Severability

 

18.1         The invalidity or unenforceability of any particular provision of this Agreement will not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

19.

Entire Agreement

 

19.1         Except as expressly provided in this Agreement and in the Questionnaire and any other documents contemplated or provided for herein, this Agreement contains the entire agreement between the Issuer and the Subscriber with respect to the sale of the Common Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by or of the Issuer or any other person.

 

20.

Notices

 

20.1         All notices and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication, including DocuSign, electronic mail or other means of electronic communication capable of producing a printed copy. Notices to the Subscriber will be directed to the address of the Subscriber set forth on page ii of this Agreement and notices to the Issuer will be directed to the address of the Issuer set forth on the first page of this Agreement.

 

21.

Counterparts and Electronic Means

 

21.1         This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute an original and all of which together will constitute one instrument. Delivery of an executed copy of this Agreement by DocuSign or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the Closing Date.

 

22.

Exhibits

 

22.1         The exhibits and appendices attached hereto form part of this Agreement.

 

23.

Indemnity

 

The Subscriber will indemnify and hold harmless the Issuer and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation, whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained in this Agreement, the Questionnaire, or in any document furnished by the Subscriber to the Issuer in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Issuer in connection therewith.

 

 

Exhibit "A"
CANADIAN INVESTOR QUESTIONNAIRE

 

Capitalized terms used in this Canadian Investor Questionnaire (this "Questionnaire") and not specifically defined have the meaning ascribed to them in the Private Placement Subscription Agreement (the "Agreement") between the undersigned (or, if the undersigned is purchasing the Common Shares as agent on behalf of a disclosed beneficial purchaser, such beneficial purchaser) (in any case, the "Subscriber") and McEwen Copper Inc. (the "Issuer") to which this Exhibit "A" is attached.

 

In connection with the purchase by the Subscriber of the Common Shares, the Subscriber hereby represents, warrants and certifies to the Issuer that the Subscriber:

 

(i)

is acquiring the Common Shares as principal (or deemed principal under the terms of National Instrument 45-106 – Prospectus Exemptions adopted by the Canadian Securities Administrators ("NI 45-106"));

 

(ii)

is resident in the jurisdiction set out as at the "Subscriber's Address" set out on page ii of the Agreement; and

 

(iii)

has not been provided with any offering memorandum in connection with the purchase of the Common Shares.

 

In connection with the acquisition of the Common Shares, the Subscriber hereby represents, warrants and certifies to, and covenants and agrees with, the Issuer that the Subscriber meets one or more of the following criteria:

 

I.	SUBSCRIBERS PURCHASING UNDER THE "ACCREDITED INVESTOR" EXEMPTION
the Subscriber is an "accredited investor" within the meaning of NI 45-106, by virtue of satisfying the indicated criterion below (YOU MUST PLACE A CHECK-MARK ON THE APPROPRIATE LINE(S)) (see certain guidance with respect to accredited investors that starts on page 19 below)
	¨	(a)	except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer,
	¨	(b)	an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (a),
	¨	(c)	an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador),
	¨	(d)	an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1,000,000 (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT A OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A-9),
	¨	(e)	an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000,

 

 

	¨	(f)	an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT A OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A-9),
	¨	(g)	an individual who, either alone or with a spouse, has net assets of at least $5,000,000 (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A -9),
	¨	(h)	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements and that has not been created or used solely to purchase or hold securities as an accredited investor as defined in this paragraph (h),
	¨	(i)	an investment fund that distributes or has distributed its securities only to:   (i)       a person that is or was an accredited investor at the time of the distribution,   (ii)       a person that acquires or acquired securities in the circumstances referred to in Sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45-106, or   (iii)       a person described in paragraph (i) or (ii) that acquires or acquired securities under Section 2.18 [Investment fund reinvestment] of NI 45-106,
	¨	(j)	an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt,
	¨	(k)	a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be,
	¨	(l)	a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction,
	¨	(m)	a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded,
	¨	(n)	an entity organized in a foreign jurisdiction that is analogous to an entity referred to in paragraph (a) in form and function, or
	¨	(o)	a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

 

 

II.	SUBSCRIBERS PURCHASING UNDER THE MINIMUM AMOUNT INVESTMENT
(a)	the Subscriber is not an individual as that term is defined in applicable Canadian securities laws,
(b)	the Subscriber is purchasing the Common Shares as principal for its own account and not for the benefit of any other person,
(c)	the Common Shares have an acquisition cost to the Subscriber of not less than $150,000, payable in cash at the Closing, and
(d)	the Subscriber was not created and is not being used solely to purchase or hold securities in reliance on the prospectus exemption provided under Section 2.10 of NI 45-106, it pre-existed the Offering and has a bona fide purpose other than investment in the Common Shares.

 

DEFINITIONS

 

For the purposes of this Questionnaire and Appendix "A" attached to this Questionnaire:

 

(a)            "control person" means

 

(i)

a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an Issuer to affect materially the control of the Issuer, or

 

(ii)

each person in a combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an Issuer to affect materially the control of the Issuer,

 

and, if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of an Issuer, the person or combination of persons is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the Issuer;

 

(b)            "director" means

 

(i)

a member of the board of directors of a company or an individual who performs similar functions for a company, and

 

(ii)

with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company;

 

(c)            "eligibility adviser" means

 

(i)

a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed, and

 

(ii)

in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not:

 

(A)

have a professional, business or personal relationship with the Issuer, or any of its directors, executive officers, founders or control persons, and

 

 

(B)

have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the Issuer or any of its directors, executive officers, founders or control persons within the previous 12 months;

 

(d)            "executive officer" means, for an Issuer, an individual who is

 

(i)

a chair, vice-chair or president,

 

(ii)

a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

 

(iii)

performing a policy-making function in respect of the Issuer;

 

(e)            "financial assets" means

 

(i)

cash,

 

(ii)

securities, or

 

(iii)

a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

 

(f)

"foreign jurisdiction" means a country other than Canada or a political subdivision of a country other than Canada;

 

(g)            "founder" means, in respect of an Issuer, a person who,

 

(i)

acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the Issuer, and

 

(ii)

at the time of the distribution or trade is actively involved in the business of the Issuer;

 

(h)

"fully managed account" means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction;

 

(i)

"individual" means a natural person, but does not include

 

(i)

a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or trust, or

 

(ii)

a natural person in the person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

(j)

"investment fund" means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an employee venture capital corporation and a venture capital corporation as such terms are defined in National Instrument 81-106 Investment Fund Continuous Disclosure;

 

(k)

"jurisdiction" or "jurisdiction of Canada" means a province or territory of Canada except when used in the term foreign jurisdiction;

 

(l)

"non-redeemable investment fund" means an Issuer:

 

(i)            whose primary purpose is to invest money provided by its securityholders,

 

(ii)            that does not invest

 

 

(A)

for the purpose of exercising or seeking to exercise control of an Issuer, other than an Issuer that is a mutual fund or a non-redeemable investment fund, or

 

(B)

for the purpose of being actively involved in the management of any Issuer in which it invests, other than an Issuer that is a mutual fund or a non-redeemable investment fund, and

 

(iii)            that is not a mutual fund;

 

(m)            "person" includes

 

(i)

an individual,

 

(ii)

a corporation,

 

(iii)

a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

 

(iv)

an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

(n)            "related liabilities" means

 

(i)

liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

 

(ii)

liabilities that are secured by financial assets; and

 

(o)            "spouse" means, an individual who,

 

(i)

is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,

 

(ii)

is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or

 

(iii)

in Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta).

 

Guidance On Accredited Investor Exemptions for Individuals

 

An individual accredited investor is an individual:

 

(a)

who, either alone or with a spouse, beneficially owns financial assets (please see the guidance below regarding what financial assets are) having an aggregate realizable value that. before taxes but net of any related liabilities (please see the guidance below regarding what related liabilities are), exceeds $1,000,000;

 

(b)

whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

 

(c)

who, either alone or with a spouse, has net assets (please see the guidance below regarding calculating net assets) of at least $5,000,000; and

 

 

(d)

who beneficially owns financial assets (please see the guidance below regarding what financial assets are) having an aggregate realizable value that, before taxes but net of any related liabilities (please see the guidance below regarding what related liabilities are), exceeds $5,000,000.

 

The monetary thresholds above are intended to create bright-line standards. Subscribers who do not satisfy these monetary thresholds do not qualify as accredited investors.

 

Spouses

 

Sections (a), (b) and (c) above are designed to treat spouses as a single investing unit, so that either spouse qualifies as an accredited investor if the combined financial assets of both spouses exceed $1,000,000, the combined net income of both spouses exceeds $300,000, or the combined net assets of both spouses exceed $5,000,000. Section (d) above does not treat spouses as a single investing unit.

 

If the combined net income of both spouses does not exceed $300,000, but the net income of one of the spouses exceeds $200,000, only the spouse whose net income exceeds $200,000 qualifies as an accredited investor.

 

Financial Assets and Related Liabilities

 

For the purposes of sections (a) and (d) above, "financial assets" means: (1) cash, (2) securities, or (3) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation. These financial assets are generally liquid or relatively easy to liquidate. The value of a subscriber's personal residence is not included in a calculation of financial assets.

 

The calculation of financial assets must exclude "related liabilities", meaning: (1) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or (2) liabilities that are secured by financial assets.

 

As a general matter, it should not be difficult to determine whether financial assets are beneficially owned by an individual, an individual's spouse, or both, in any particular instance. However, in the case where financial assets are held in a trust or in another type of investment vehicle for the benefit of an individual, there may be questions as to whether the individual beneficially owns the financial assets. The following factors are indicative of beneficial ownership of financial assets:

 

•

physical or constructive possession of evidence of ownership of the financial asset;

 

•

entitlement to receipt of any income generated by the financial asset;

 

•

risk of loss of the value of the financial asset; and

 

•

the ability to dispose of the financial asset or otherwise deal with it as the individual sees fit.

 

For example, securities held in a self-directed RRSP for the sole benefit of an individual are beneficially owned by that individual.

 

In general, financial assets in a spousal RRSP can be included for the purposes of the $1,000,000 financial asset test in section (a) above because section (a) takes into account financial assets owned beneficially by a spouse. However, financial assets in a spousal RRSP cannot be included for purposes of the $5,000,000 financial asset test in section (d) above.

 

 

Financial assets held in a group RRSP under which the individual does not have the ability to acquire the financial assets and deal with them directly do not meet the beneficial ownership requirements in either sections (a) or (d) above.

 

Net Assets

 

For the purposes of section (c) above, "net assets" means all of a subscriber's total assets minus all of the subscriber's total liabilities. Accordingly, for the purposes of the net asset test, the calculation of total assets includes the value of a subscriber's personal residence, and the calculation of total liabilities includes the amount of any liability (such as a mortgage) in respect of the subscriber's personal residence.

 

To calculate a subscriber's net assets under the net asset test, subtract the subscriber's total liabilities from the subscriber's total assets. The value attributed to assets should reasonably reflect their estimated fair value. Income tax is considered a liability if the obligation to pay it is outstanding at the time of the distribution of the security to the subscriber by the Issuer.

 

Guidance On Accredited Investor Exemptions for Corporations, Trusts and Other Entities

 

Accredited investors that are corporations, trusts or other entities include:

 

(a)

a corporation, trust or other entity, other than an investment fund, that has net assets (please see the guidance below regarding calculating net assets) of at least $5,000,000 as shown on its most recently prepared financial statements in accordance with applicable generally accepted accounting principles and that has not been created or used solely to purchase or hold securities as an accredited investor;

 

(b)

a corporation, trust or other entity in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; and

 

(c)

a trust established by an accredited investor for the benefit of the accredited investor's family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor's spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor's spouse or of that accredited investor's former spouse.

 

Net Assets

 

For the purposes of section (a) above, "net assets" means all of the subscriber's total assets minus all of the subscriber's total liabilities. The minimum net asset threshold of $5,000,000 specified in section (a) above must be shown on the entity's most recently prepared financial statements. The financial statements must be prepared in accordance with applicable generally accepted accounting principles.

 

The Subscriber agrees that the above representations and warranties will be true and correct both as of the execution of this Questionnaire and as of the Closing and acknowledges that they will survive the completion of the issue of the Common Shares.

 

The Subscriber acknowledges that the foregoing representations and warranties are made by the Subscriber with the intent that they be relied upon in determining the suitability of the Subscriber to acquire the Common Shares and that this Questionnaire is incorporated into and forms part of the Agreement and the undersigned undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the closing time of the purchase and sale of any of the Common Shares.

 

 

The Subscriber undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth in the Agreement or in this Questionnaire which takes place prior to the Closing.

 

By completing this Questionnaire, the Subscriber authorizes the indirect collection of this information by each applicable regulatory authority or regulator and acknowledges that such information is made available to the public under applicable laws.

 

DATED as of _______ day of               , 2022.

 

	Print Name of Subscriber (or person signing as agent of the Subscriber)
	By:
		Signature
	Print Name of Subscriber (or person signing as agent of the Subscriber)

 

 

Appendix "A"

TO EXHIBIT A

TO CANADIAN INVESTOR QUESTIONNAIRE
Form 45-106F9

 

WARNING! This investment is risky. Don't invest unless you can afford to lose all the money you pay for this investment.

 

SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER
1. About your investment
Type of securities: Common Shares at a price of US$10.00 per Common Share.	Issuer: McEwen Copper Inc. (the "Issuer")

Purchased from: The Issuer.
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER
2. Risk acknowledgement
This investment is risky. Initial that you understand that:	Your initials
Risk of loss – You could lose your entire investment of $___________. [Instruction: Insert the total dollar amount of the investment.]
Liquidity risk – You may not be able to sell your investment quickly – or at all.
Lack of information – You may receive little or no information about your investment.
Lack of advice – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca.
3. Accredited investor status
You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria.	Your initials

·	Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.)
·	Your net income before taxes combined with your spouse's was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year.
·	Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.

 

 

·

Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.)

4. Your name and signature
By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form.
First and last name (please print):
Signature:	Date:
SECTION 5 TO BE COMPLETED BY THE ISSUER
5. For more information about this investment
McEwen Copper Inc. 150 King Street West, S. 2800 Toronto, ON M5H 1J9   Attention:    Carmen Diges Email:          [email protected]
For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca.

 

Form instructions:
1.	This form does not mandate the use of a specific font size or style but the font must be legible
2.	The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form.
3.	The purchaser must sign this form. Each of the purchaser and the Issuer or selling security holder must receive a copy of this form signed by the purchaser. The Issuer or selling security holder is required to keep a copy of this form for 8 years after the distribution.

 

 

exhibit "B"
TERM SHEET

 

McEwen Copper Inc.

 

Terms and Conditions of Non-Brokered Private Placement Offering

 

(All amounts shown in United States Currency)

Issuer:	McEwen Copper Corp. (the “Company”), a private Alberta company, wholly-owned by McEwen Mining Inc. (MUX: NYSE, TSX).   The Company owns a 100% interest in the development stage Los Azules copper property, located in San Juan Argentina and a 100% interest in the Elder Creek copper exploration property in Nevada.
Offering:	Private placement (the “Offering”) of a minimum of 4,000,000 to and a maximum of 8,000,000 common shares of the Company (the “Shares”), representing up to a 31% equity ownership of the Company post-financing based on a pre-money valuation of USD $175M.  A 1.25% NSR would be issued in favour of McEwen Mining Inc. following the closing of the Offering.
Price:	USD $10.00 per common share (the “Share Price”). USD $250,000 minimum subscription amount.  Lead order of USD $40,000,000 by Rob McEwen, Chief Owner of McEwen Mining Inc. personally.
Size of Offering:	Minimum of USD $40,000,000 to USD $80,000,000.
Use of Proceeds:	The net proceeds of the Offering will be used to: (i) to advance the project towards a pre-feasibility study and improve access to the Los Azules property, (ii) USD $3 million for exploration of the Elder Creek property, and (iii) for general corporate purposes.
Offering  Jurisdictions:	The Offering will take place by way of a non-brokered private placement to qualified investors in all the provinces of Canada, excluding Quebec, to Qualified Institutional Buyers (as such term is defined in the United States Securities Act of 1933) in the United States and otherwise in those jurisdictions where the Offering can lawfully be made without subjecting the Company to registration or continuous disclosure requirements in such jurisdictions. Subscribers must be “accredited investors” (as defined in National Instrument 45-106 - Prospectus Exemptions (“NI 45-106”)).
Hold Period:	The Company is not a reporting issuer in any province or territory of Canada. As such, the Shares will not be transferable under the laws of Canada, except pursuant to applicable statutory exemptions, until the date that is four months and a day after the date the Company becomes a reporting issuer in any province or territory of Canada (subject to any control person distribution restrictions) in accordance with National Instrument 45-102 – Resale of Securities.
Commission:	Finder’s fees of up to 5% cash payable to arm’s length finders.
Conditions to be met on Closing:	The Offering shall be conditional upon each purchaser of Shares entering into a shareholder agreement in a form to be determined.
Closing Date:	Closing may be in one or more tranches as the Company may determine.

 

 

 

Exhibit 10.2 

 

McEWEN COPPER INC.
(the "Issuer")

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(COMMON SHARES)

 

INSTRUCTIONS TO SUBSCRIBER

 

1.

You must complete all the information in the boxes on page ii and sign where indicated with an "X".

 

2.

You must complete and sign Exhibit "A" - "U.S. Investor Questionnaire" that starts on page  A-1. The purpose of this form is to determine whether you meet the standards for participation in a private placement under applicable U.S. securities laws. In order for the Issuer to satisfy its obligations under applicable U.S. securities laws, you may be required to provide additional evidence to verify the information you have provided in Exhibit "A" - "U.S. Investor Questionnaire" that starts on page A-1.

 

3.

Please make sure that your subscription includes:

 

(a)

a signed copy of this Subscription Agreement.

 

(b)

payment by certified check, money order, bank draft, wire transfer or other acceptable means in the amount of the Subscription Amount payable to " McEwen Copper Inc."

 

	Subscription Procedure:
		Completed Subscription Agreement and payment to be delivered to:
		McEwen Copper Inc.
		150 King Street West, S. 2800
		Toronto, ON M5H 1J9
		Attention:	Carmen Diges
		Email:	[email protected]
	Wire Transfer Instructions:
		If paying by wire transfer, wire funds as follows:
		Beneficiary Name: McEwen Copper Inc.
		Beneficiary Address: STE 2800, 150 KING ST W TORONTO, ON M5H 1J9
		Beneficiary Account Number:
		Beneficiary Bank and Address:
		SWIFT:
		Bank Number: 003
		Transit Number: 00002
		Intermediary Bank and Address:
		SWIFT CODE:
		ABA NUMBER:
		SORT CODE //
		Reference: McEwen Copper Inc. – subscription proceeds

 

 

McEWEN COPPER INC.

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees to purchase from McEwen Copper Inc. (the "Issuer") the number of common shares in the capital of the Issuer (each, a "Common Share") on the terms set out in the Investor Term Sheet set out in Exhibit "B" that starts on page B-1. The Subscriber agrees to be bound by the terms and conditions set forth in the attached "Terms and Conditions of Subscription for Common Shares" (the "Terms and Conditions").

 

Subscriber Information				Common Shares to be Purchased
				Number of Common Shares:
(Name of Subscriber)

				Subscription Amount:	US$
	X			(the "Subscription Amount")

(Signature of Authorized Signatory – if the Subscriber is not an Individual)                                    (Name and Title of Authorized Signatory – if the Subscriber is not an Individual)                                     (Subscriber's Address, including postal or zip code)                                                                       (Telephone Number)                                    (Email Address)
		If the Subscriber is subscribing as an agent on behalf of a beneficial purchaser (check the appropriate box):   ¨  the Subscriber is a trust company or trust corporation or a registered adviser acting on behalf of a fully managed account and deemed under applicable securities laws to be purchasing as principal, or   ¨  the following information is true and correct and, as applicable, Exhibit "A" hereto has been completed for each beneficial purchaser:          (Name of Beneficial Purchaser)          (Address of Beneficial Purchaser)          (Beneficial Purchaser's Telephone Number)           (Beneficial Purchaser's E-Mail Address)

 

Register the Common Shares as set forth below:                                    (Name to Appear on Share Certificate)   (Account Reference, if applicable)                                    (Address, including postal or zip code)

Deliver the Common Shares as set forth below:                                    (Attention - Name)   (Account Reference, if applicable)                                    (Street Address, including postal or zip code – no PO Boxes permitted)   (Telephone Number)

 

 

ACCEPTANCE

 

The Issuer hereby accepts the Subscription (as defined herein) on the terms and conditions contained in this private placement subscription agreement (this "Agreement") as of the _____ day of ________________, 2022.

 

McEWEN COPPER INC.
Per:
	Authorized Signatory

 

 

TERMS AND CONDITIONS OF
SUBSCRIPTION FOR COMMON SHARES

 

1.

Subscription

 

1.1            On the basis of the representations and warranties, and subject to the terms and conditions, set forth in this Agreement, the Subscriber hereby irrevocably subscribes for and agrees to purchase the Common Shares for the Subscription Amount shown on page ii of this Agreement (such subscription and agreement to purchase the Common Shares being the "Subscription") by way of a private placement offering (the "Offering"), and the Issuer agrees to sell the Common Shares to the Subscriber, effective upon the Closing Date.

 

2.

Payment

 

2.1           The Subscription Amount must accompany this Subscription and be paid by a certified check, money order or bank draft or by wire transfer to the Issuer pursuant to the wire instructions provided by the Issuer in the Instructions to Subscriber on page i. The Subscriber authorizes the Issuer to treat the Subscription Amount as an interest free loan until the closing of the Offering (the "Closing").

 

2.2           The Subscriber acknowledges and agrees that this Agreement, the Subscription Amount and any other documents delivered in connection herewith will be held by or on behalf of the Issuer. In the event that this Agreement is not accepted by the Issuer for whatever reason, which the Issuer expressly reserves the right to do, the Issuer will return the Subscription Amount (without interest thereon) to the Subscriber at the address of the Subscriber as set forth on page ii of this Agreement, or as otherwise directed by the Subscriber, in writing, to the Issuer, prior to the return of the Subscription Amount by the Issuer.

 

3.

Documents Required from Subscriber

 

3.1           The Subscriber must complete, sign and return to the Issuer the following documents:

 

(a)

this Agreement;

 

(b)

the U.S. Investor Questionnaire (the "Questionnaire") attached as Exhibit "A" that starts on page A-1, along with any additional evidence that may be requested by the Issuer to verify the information provided in the Questionnaire; and

 

(c)

such other supporting documentation that the Issuer may request to establish the Subscriber's eligibility to participate in the Offering.

 

The Subscriber acknowledges and agrees that the Issuer will not consider the Subscription for acceptance unless the Subscriber has provided all of such documents to the Issuer.

 

3.2            As soon as practicable upon any request by the Issuer, the Subscriber will complete, sign and return to the Issuer any additional documents, questionnaires, notices and undertakings the Issuer may reasonably require or otherwise, may be required by any regulatory authorities or applicable laws.

 

 

4.

Conditions and Closing

 

4.1            The closing date (the "Closing Date") shall be on such date as may be determined by the Issuer in its sole discretion. The Issuer may, at its discretion, elect to close the Offering in one or more closings, in which event the Issuer may agree with one or more purchasers (including the Subscriber) to complete delivery of the Common Shares to such purchaser(s) against payment therefor at any time on or prior to the Closing Date.

 

4.2            The Closing is conditional upon and subject to:

 

(a)

the Issuer having obtained any necessary approvals and consents for the Offering; and

 

(b)

the offer and sale of the Common Shares being exempt from the registration requirements under the U.S. Securities Act of 1933, as amended (the “1933 Act”), the laws of any U.S. state or other applicable jurisdiction.

 

4.3            The Subscriber acknowledges that the original share certificates representing the Common Shares ("Certificates") will be held by the Issuer in the Issuer's minute book. The Issuer will deliver electronic copies of the Certificates to the Subscriber within seven business days of the Closing Date, provided that the Subscriber has satisfied the requirements of Section 3.1 hereof and the Issuer has accepted this Agreement.

 

5.

Acknowledgements and Agreements of the Subscriber

 

5.1            The Subscriber acknowledges and agrees that:

 

(a)

no registration statement has been filed by the Issuer with any securities commission or any other regulatory authority in connection with the issuance of the Common Shares;

 

(b)

the Subscriber has not received, nor has the Subscriber requested nor had any need to receive, or been provided with a prospectus, offering memorandum or any document purporting to describe the business and affairs of the Issuer which has been prepared for review by prospective purchasers to assist in making an investment decision in respect of the Common Shares and that the Subscriber's decision, or, if applicable, the decision of others for whom the undersigned is contracting hereunder, to enter into this Agreement and to purchase the Common Shares from the Issuer is based entirely upon this Agreement and publicly available information concerning the Issuer and not upon any other verbal or written representation as to fact or otherwise made by or on behalf of the Issuer;

 

(c)

the Issuer's constating documents contain restrictions on the transfer of the Common Shares, which provide that no Common Shares may be transferred without the prior approval of the board of directors of the Issuer;

 

(d)

the Issuer is not a "reporting issuer" as that term is defined in applicable Canadian securities laws, does not file periodic reports with the U.S. Securities and Exchange Commission, nor will it become a reporting issuer in any jurisdiction in Canada or elsewhere upon completion of the Offering and, as a result unless the Issuer becomes a reporting issuer at a later date, the Issuer will not be subject to the continuous disclosure requirements of any securities laws, including any requirement relating to the production and filing of audited financial statements or other financial information.

 

 

(e)

the issuance of the Common Shares will be made pursuant to exemptions from the registration and prospectus delivery requirements of applicable securities laws and therefore:

 

(i)

the Subscriber may not receive information about the Issuer that would otherwise be required to be provided to it under applicable securities laws,

 

(ii)

the Issuer is relieved from certain obligations that would otherwise apply under applicable securities laws,

 

(iii)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares,

 

(iv)

there is no government or other insurance covering the Common Shares, and

 

(v)

there are risks associated with the purchase of the Common Shares, including that the Subscriber may lose the Subscriber's entire investment;

 

(f)

an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Common Shares;

 

(g)

any subscription monies paid by the Subscriber for the Common Shares is being raised as "seed" or "risk" capital for the Issuer, which is in a speculative stage, and there is no market for the Common Shares whatsoever;

 

(h)

none of the Common Shares have been or will be registered under the 1933 Act, or under any securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold except pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, and in each case only in accordance with any other applicable federal, state, provincial and foreign securities laws;

 

(i)

the Issuer has not undertaken, and will have no obligation, to register any of the Common Shares under the 1933 Act or any other securities laws;

 

(j)

the Issuer will refuse to register the transfer of any of the Common Shares not made pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act, and in each case will only register such transfer in accordance with applicable laws;

 

(k)

it will hold harmless the Issuer from any loss or damage it may suffer as a result of the Subscriber's failure to correctly complete this Agreement or the Questionnaire;

 

(l)

it and its advisor(s) have had a reasonable opportunity to ask questions of, and receive answers from, the Issuer in connection with the distribution of the Common Shares hereunder, and to obtain additional information, to the extent possessed or obtainable by the Issuer without unreasonable effort or expense;

 

(m)

the books and records of the Issuer were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at the Issuer's principal place of business, and all documents, records and books in connection with the distribution of the Common Shares hereunder have been made available by the Issuer for inspection by the Subscriber, its legal counsel and/or its advisor(s) if requested by the Subscriber;

 

 

(n)

any resale, assignment, transfer, hypothecation or pledge of any of the Common Shares by the Subscriber will be subject to: (i) resale restrictions contained in the securities laws applicable to the Issuer, the Subscriber and any proposed transferee; and (ii) the Issuer's constating documents and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with such restrictions before selling any of the Common Shares;

 

(o)

it consents to the placement of a legend or legends on the Certificates and any other document evidencing any of the Common Shares setting forth the restrictions on transferability and sale thereof contained in this Agreement, including the following:

 

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE CONSTATING DOCUMENTS OR UNANIMOUS SHAREHOLDER AGREEMENT OF THE COMPANY.

 

THE SHARES THAT ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.";

 

(p)

it has been advised to consult its own legal, tax and other advisors with respect to the Offering and the risks of an investment in the Common Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Issuer is not in any way responsible) for compliance with:

 

(i)

any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Common Shares hereunder, and

 

(ii)

any applicable resale restrictions;

 

(q)

there may be material tax consequences to the Subscriber of an acquisition or disposition of the Common Shares and the Issuer gives no opinion and makes no representation to the Subscriber with respect to the tax consequences to the Subscriber under federal, state, provincial, local or foreign tax laws that may apply to the Subscriber's acquisition or disposition of any of the Common Shares;

 

(r)

it is subscribing for the Common Shares for investment purposes and for Subscriber’s own account, with the intention of holding the Common Shares, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of the Common Shares;;

 

(s)

there is no market for any of the Common Shares and no market for any of the Common Shares may ever exist;

 

 

(t)

the Issuer intends to grant a 1.25% net smelter return royalty in favour of McEwen Mining Inc. as provided for in Exhibit “B” to this Agreement, and the Subscriber agrees and accepts this term as a condition of the acceptance of its subscription by the Issuer; and

 

(u)

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Issuer and the Issuer reserves the right to reject this Subscription for any reason.

 

6.

Representations and Warranties of the Subscriber

 

6.1            The Subscriber hereby represents and warrants to the Issuer (which representations and warranties will survive the Closing) that:

 

(a)

the Subscriber is resident in the jurisdiction set out on page ii of this Agreement;

 

(b)

if the Subscriber is resident outside of the U.S. or Canada:

 

(i)

the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws having application in the jurisdiction in which the Subscriber is resident (the "International Jurisdiction") which would apply to the offer and sale of the Common Shares,

 

(ii)

the Subscriber is acquiring the Common Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to acquire the Common Shares under the applicable laws of the International Jurisdiction without the need to rely on any exemptions,

 

(iii)

the applicable laws of the authorities in the International Jurisdiction do not require the Issuer to make any filings or seek any approvals of any kind from any securities regulator in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Common Shares,

 

(iv)

the acquisition of the Common Shares by the Subscriber does not trigger:

 

(A)

any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase, in the International Jurisdiction, or

 

(B)

any continuous disclosure reporting obligation of the Issuer in the International Jurisdiction, and

 

(v)

the Subscriber will, if requested by the Issuer, deliver to the Issuer a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv), above, to the satisfaction of the Issuer, acting reasonably;

 

(c)

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;

 

 

(d)

the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

 

(e)

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;

 

(f)

the Subscriber has received and carefully read this Agreement;

 

(g)

the Subscriber acknowledges receipt of a copy of the unanimous shareholder agreement of the Issuer and acknowledges that it is a condition of becoming a shareholder of the Issuer that the Subscriber must become a party to such unanimous shareholder agreement;

 

(h)

the Subscriber is aware that an investment in the Issuer is speculative and involves certain risks, including the possible loss of the entire investment;

 

(i)

the Subscriber has made an independent examination and investigation of an investment in the Common Shares and the Issuer and agrees that the Issuer will not be responsible in any way for the Subscriber's decision to invest in the Common Shares and the Issuer;

 

(j)

the Subscriber is not an underwriter of, or dealer in, any of the Common Shares, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Common Shares;

 

(k)

the Subscriber is not aware of any advertisement of any of the Common Shares and is not acquiring the Common Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

(l)

no person has made to the Subscriber any written or oral representations:

 

(i)

that any person will resell or repurchase any of the Common Shares,

 

(ii)

that any person will refund the purchase price of any of the Common Shares, or

 

(iii)

as to the future price or value of any of the Common Shares; and

 

(m)

other than as provided in the term sheet attached as Exhibit “B” to this Agreement, there is no person acting or purporting to act in connection with the Offering who is entitled to any brokerage or finder's fee payable by the Issuer. If any person establishes a claim that any fee or other compensation is payable by the Issuer in connection with this subscription for the Common Shares, the Subscriber or any beneficial purchaser for whom the undersigned is acting covenants to indemnify and hold harmless the Issuer with respect thereto and with respect to all costs reasonably incurred in the defence thereof.

 

 

7.

Representations and Warranties will be Relied Upon

 

7.1            The Subscriber acknowledges that its representations and warranties contained herein and in the Questionnaire are made by it with the intention that such representations and warranties will be relied upon by the Issuer in determining the Subscriber's eligibility to purchase the Common Shares under applicable laws, or (if applicable) the eligibility of others on whose behalf the Subscriber is contracting hereunder to purchase the Common Shares under applicable laws. The Subscriber further agrees that, as at the Closing, it will be representing and warranting that its representations and warranties contained herein and in the Questionnaire are true and correct as at the Closing with the same force and effect as if they had been made by the Subscriber on the Closing, and that they will survive the purchase by the Subscriber of the Common Shares and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of the Common Shares.

 

8.

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

8.1            The Issuer hereby represents and warrants to the Subscriber (which representations and warranties will survive the Closing) that:

 

(a)

the Issuer is validly subsisting under the laws of its jurisdiction of incorporation, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and shall carry on its business in the ordinary course and in compliance in all material respects with all applicable laws, rules and regulations of each such jurisdiction;

 

(b)

on the Closing Date, the Issuer will have taken all corporate steps and proceedings necessary to approve the transactions contemplated under this Subscription Agreement, including its execution and delivery;

 

(c)

the Issuer has not received notice from any applicable regulatory authority that it is in default of any securities laws material to the Subscriber;

 

(d)

at the time of closing on the Closing Date, the Common Shares will be duly and validly created, authorized and issued; will be validly issued as fully paid as non-assessable Common Shares in the capital of the Issuer;

 

(e)

the issuance and sale of the Common Shares by the Issuer does not and will not constitute a breach of or default under the constating documents of the Issuer or any law, regulation, order or ruling applicable to the Issuer or any agreement, contract or indenture to which the Issuer is a party or by which it is bound; and

 

(f)

this Subscription Agreement, when signed by the Issuer, constitutes a binding and enforceable obligation of the Issuer, enforceable in accordance with its terms.

 

9.

Waiver

 

9.1            The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber may be entitled in connection with the distribution of any of the Common Shares.

 

 

10.

Pooling or Escrow of COMMON Shares and Power of Attorney

 

10.1         The Subscriber acknowledges that the Issuer is not currently a reporting issuer in any jurisdiction. If the Issuer completes an initial public offering that results in the Common Shares or other securities in the capital of the Issuer becoming listed on a stock exchange in Canada or the United States of America, or the Issuer completes a reverse takeover, statutory merger or amalgamation, arrangement, share exchange, business combination or other similar transaction which results in a class of shares of the issuer resulting from such transaction being listed (the "Resulting Issuer") on a stock exchange in Canada or the United States of America and the shareholders of the Issuer receiving such listed securities of the Resulting Issuer and/or cash in exchange for their Common Shares (in each case, a "Liquidity Event"), the Common Shares may be required to be pooled or escrowed, either at the request of the Issuer's selling agent or underwriter in connection with the Liquidity Event, or pursuant to the rules of any stock exchange, securities commission or other securities regulatory authority having jurisdiction, and the Subscriber agrees to sign any such pooling or escrow agreement and abide by any such restrictions as may be so imposed.

 

10.2         In furtherance of the covenant in Section 10.1, the Subscriber hereby irrevocably appoints the Chief Executive Officer or the President of the Issuer, as exists at the applicable time (in any case, the "President"), as the Subscriber's attorney-in-fact, and authorizes the President as the Subscriber's attorney-in-fact, with full power and authority in the Subscriber's place and stead, to approve and sign any pooling or escrow agreement, or any other document, on behalf of the Subscriber as the Issuer advises may be required to provide for pooling or escrow of the Common Shares, or the approval and completion of any Liquidity Event, as the case may be, in the event of a Liquidity Event or other transaction pursuant to which the Issuer may become listed, directly or indirectly, on any stock exchange. This 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 by the Subscriber. This power of attorney and other rights and privileges granted hereunder will survive any legal or mental incapacity, dissolution, bankruptcy or death of the Subscriber. This power of attorney extends to the heirs, executors, administrators, other legal representatives and successors, transferees and assigns of the Subscriber. Any person dealing with the Issuer may conclusively presume and rely upon the fact that any document, instrument or agreement executed by the President pursuant to this power of attorney is authorized and binding on the Subscriber, without further inquiry. The Subscriber (on its own behalf and, if applicable, on behalf of each beneficial purchaser on whose behalf it is contracting) agrees to be bound by any representations or actions made or taken by the President pursuant to this power of attorney, and waives any and all defences that may be available to contest, negate or disaffirm any action of the President taken in good faith under this power of attorney.

 

11.

Collection of Personal Information

 

11.1         The Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber's personal information for the purpose of fulfilling this Agreement and completing the Offering. The Subscriber acknowledges that its personal information (and, if applicable, the personal information of any person on whose behalf the Subscriber is contracting hereunder) may be included in record books in connection with the Offering and may be disclosed by the Issuer to: (i) stock exchanges or securities regulatory authorities; (ii) the Issuer's registrar and transfer agent; (iii) Canadian or U.S. tax authorities; (iv) the U.S. Financial Crimes Enforcement Network and authorities pursuant, among other legislation, to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) ; and (v) any other parties involved in the Offering, including the Issuer's Counsel. By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber's personal information (and, if applicable, the personal information of any other person on whose behalf the Subscriber is contracting hereunder) for the foregoing purposes and to the retention of such personal information for as long as permitted or required by applicable laws. Notwithstanding that the Subscriber may be purchasing the Common Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal has in the Issuer, all as may be required by the Issuer in order to comply with the foregoing. Furthermore, the Subscriber is hereby notified that:

 

(a)

the Issuer may deliver to any securities commission having jurisdiction over the Issuer, the Subscriber or this Subscription, including any Canadian provincial securities commissions, the United States Securities and Exchange Commission and/or any state securities commissions (collectively, the "Commissions"), certain personal information pertaining to the Subscriber, including the Subscriber's full name, residential address and telephone number, the number of securities of the Issuer owned by the Subscriber, the number of Common Shares purchased by the Subscriber, the total Subscription Amount paid, the prospectus exemption relied on by the Issuer and the date of distribution of the Common Shares;

 

 

(b)

such information is being collected indirectly by the Commissions under the authority granted to them in applicable securities laws; and

 

(c)

such information is being collected for the purposes of the administration and enforcement of applicable securities laws.

 

12.

Costs

 

12.1         The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any legal counsel or tax or financial advisors retained by the Subscriber) relating to the purchase of the Common Shares will be paid by the Subscriber.

 

13.

Delivery of Subscription Agreement

 

13.1         The Issuer and the Issuer's Counsel will be entitled to rely on delivery by DocuSign or other means of electronic communication of an executed copy of this Agreement, and acceptance by the Issuer of such copy will be equally effective to create a valid and binding agreement between the Subscriber and the Issuer in accordance with the terms hereof. If less than a complete copy of this Agreement is delivered to the Issuer or the Issuer's Counsel prior to or at Closing, the Issuer and the Issuer's Counsel are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered prior to or at Closing as written herein, unaltered.

 

13.2         The Subscriber hereby authorizes the Issuer to correct any minor errors in, or complete any minor information missing from, any part of this Agreement and any other acknowledgements, provisions, forms, certificates or documents executed by the Subscriber and delivered to the Issuer or the Issuer's Counsel in connection with the Subscription.

 

14.

Beneficial Subscribers

 

14.1        Whether or not explicitly stated in this Agreement, any acknowledgement, representation, warranty, covenant or agreement made by the Subscriber in this Agreement, including the exhibits and appendices hereto, will be treated as if made by the disclosed principal, if any.

 

 

15.

Governing Law

 

15.1         This Agreement and all matters related hereto or arising herefrom are governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial or undisclosed purchaser for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Alberta in all matters related to, or arising from, this Agreement.

 

16.

Survival

 

16.1         This Agreement, including the representations, warranties and covenants contained herein, will survive and continue in full force and effect and be binding upon the Issuer and the Subscriber, notwithstanding the completion of the purchase of the Common Shares by the Subscriber.

 

17.

Assignment

 

17.1         This Agreement is not transferable or assignable.

 

18.

Severability

 

18.1         The invalidity or unenforceability of any particular provision of this Agreement will not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

19.

Entire Agreement

 

19.1         Except as expressly provided in this Agreement and in the Questionnaire and any other documents contemplated or provided for herein, this Agreement contains the entire agreement between the Issuer and the Subscriber with respect to the sale of the Common Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by or of the Issuer or any other person.

 

20.

Notices

 

20.1         All notices and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication, including DocuSign, electronic mail or other means of electronic communication capable of producing a printed copy. Notices to the Subscriber will be directed to the address of the Subscriber set forth on page ii of this Agreement and notices to the Issuer will be directed to the address of the Issuer set forth on the first page of this Agreement.

 

21.

Counterparts and Electronic Means

 

21.1         This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute an original and all of which together will constitute one instrument. Delivery of an executed copy of this Agreement by DocuSign or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the Closing Date.

 

 

22.

Exhibits

 

22.1        The exhibits and appendices attached hereto form part of this Agreement.

 

23.

Indemnity

 

The Subscriber will indemnify and hold harmless the Issuer and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation, whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained in this Agreement, the Questionnaire, or in any document furnished by the Subscriber to the Issuer in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Issuer in connection therewith.

 

 

Exhibit "A"
U.S. INVESTOR QUESTIONNAIRE

 

Capitalized terms used in this U.S. Investor Questionnaire (this "Questionnaire") and not specifically defined have the meaning ascribed to them in the Private Placement Subscription Agreement (the "Agreement") between the undersigned (or, if the undersigned is purchasing the Common Shares as agent on behalf of a disclosed beneficial purchaser, such beneficial purchaser) (in any case, the "Subscriber") and McEwen Copper Inc. (the "Issuer") to which this Exhibit "A" is attached.

 

In connection with the purchase by the Subscriber of the Common Shares, the Subscriber hereby represents, warrants and certifies to the Issuer that the Subscriber:

 

(i)

is acquiring the Common Shares for investment purposes and for its own account, and pursuant to one or more exemptions from the registration requirements under applicable U.S. federal and state law;

 

(ii)

is resident in the jurisdiction set out as at the "Subscriber's Address" set out on page ii of the Agreement; and

 

(iii)

has not been provided with any offering memorandum in connection with the purchase of the Common Shares.

 

 

In connection with the acquisition of the Common Shares, the Subscriber hereby represents, warrants and certifies to, and covenants and agrees with, the Issuer that the Subscriber meets one or more of the following criteria:

 

I.	SUBSCRIBERS PURCHASING UNDER THE "ACCREDITED INVESTOR" EXEMPTION
The Subscriber is an "accredited investor" as such term is defined in Regulation D promulgated under the 1933 Act, by virtue of satisfying the indicated criterion below (YOU MUST PLACE A CHECK-MARK ON THE APPROPRIATE LINE(S))

 

¨	(1)	I certify that I am an accredited investor because I have an individual net worth1, or my spouse or spousal equivalent and I have a combined net worth, in excess of $1,000,000.
¨	(2)	I certify that I am an accredited investor because I had individual income (exclusive of any income attributable to my spouse or spousal equivalent) of more than $200,000 in each of the past two years, or joint income with my spouse or spousal equivalent of more than $300,000 in each of those years, and I reasonably expect to reach the same income level in the current year.2
¨	(3)	I certify that I am a natural person who holds, in good standing, one of the following professional licenses: the General Securities Representative license (Series 7), the Private Securities Offerings Representative license (Series 82), or the Investment Adviser Representative license (Series 65).
¨	(4)	I certify that I am a “family client,” as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), of a family office (meeting the requirements of a family office as identified below in Section 3 of this Questionnaire), and whose prospective investment in Issuer  is directed by a Family Officer Director (as defined below).
¨	(5)	The Subscriber hereby certifies that it is an accredited investor because it is a bank as defined in 1933 Act §3(a)(2) or a savings and loan association or other institution as defined in 1933 Act §3(a)(5)(A), acting in its individual or fiduciary capacity.

 

1

For purposes of this Questionnaire, (i) “net worth” means the excess of total assets at fair market value, including home furnishings and automobiles, over total liabilities; (ii) Subscriber may not count the value of Subscriber’s primary residence in net worth, and if the amount of debt on Subscriber’s primary residence exceeds its value, Subscriber must count the excess against net worth; and (iii) Subscriber does not need to count as a liability debt secured by the Subscriber’s primary residence up to the value of the residence, unless the amount of such debt exceeds the amount that was outstanding 60 days prior, other than debt resulting from the acquisition of the primary residence.

 

2

For purposes of this Questionnaire, “individual income” means adjusted gross income, as reported for Federal income tax purposes, less any income attributable to a spouse or to property owned by a spouse, increased by the following amounts (but not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount of any tax-exempt interest income under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”); (ii) the amount of losses claimed as a limited partner in a limited partnership as reported on Schedule E of Form 1040; (iii) the amount of any deduction, including the allowance for depletion, under Section 611 et seq. of the Code; (iv) amounts contributed to an Individual Retirement Account (as defined in the Code) or Keogh retirement plan; (v) alimony paid; and (vi) any elective contributions to a cash or deferred arrangement under Code §401(k). For purposes of this Subscription Agreement, “joint income” means adjusted gross income, as reported for Federal income tax purposes, including any income attributable to a spouse or to property owned by a spouse, increased by the foregoing items (i) through (vi), (including any amounts attributable to a spouse or to property owned by a spouse).

 

 

¨	(6)	The Subscriber hereby certifies that it is an accredited investor because it is a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 (“1934 Act”).
¨	(7)	The Subscriber hereby certifies that it is an accredited investor because it is an insurance company as defined in 1933 Act §2(13).
¨	(8)	The Subscriber hereby certifies that it is an accredited investor because it is an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) or a business development company as defined in 1940 Act §2(a)(48).
¨	(9)	The Subscriber hereby certifies that it is an accredited investor because it is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.
¨	(10)	The Subscriber hereby certifies that it is an accredited investor because it is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, and such plan has total assets in excess of $5 million.
¨	(11)	The Subscriber hereby certifies that it is an accredited investor because it is a self-directed plan in which investment decisions are made solely by persons that are accredited investors.
¨	(12)	The Subscriber hereby certifies that it is an accredited investor because it is a private business development company as defined in Section 202(a)(22) of the Advisers Act.
¨	(13)	The Subscriber hereby certifies that it is an accredited investor because it is (i) an organization described in Code §501(c)(3), a corporation, a limited liability company, a Massachusetts or similar business trust, or a partnership, (ii) was not formed for the specific purpose of acquiring the Common Shares, and (iii) has total assets in excess of $5,000,000.
¨	(14)	The Subscriber hereby certifies that it is an accredited investor because it is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Common Shares, whose purchase is directed by a sophisticated person.  As used in the foregoing sentence, a “sophisticated person” is one who has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment.
¨	(15)	The Subscriber hereby certifies that it is an accredited investor because all of its equity owners are accredited investors.
¨	(16)	The Subscriber hereby certifies that it is an investment adviser registered pursuant to Section 203 of the Advisers Act or registered pursuant to the laws of a state.
¨	(17)	The Subscriber hereby certifies that it is an investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of the Advisers Act.
¨	(18)	The Subscriber hereby certifies that it is a “Rural Business Investment Company” as defined in Section 384A of the Consolidated Farm and Rural Development Act.
¨	(19)	The Subscriber hereby certifies that it is an entity of a type not specifically identified listed in this Questionnaire, that is not formed for the specific purpose of acquiring the Common Shares and owns “investments” in excess of $5 million. For purposes of this clause, "investments" is defined in Rule 2a51-1 adopted under the 1940 Act.

 

 

¨

(20)

The Subscriber hereby certifies that it is a “family office”, as defined in Rule 202(a)(11)(G)-1 under the Advisers Act, that: (i) has assets under management in excess of $5 million; (ii) is not formed for the specific purpose of acquiring the Common Shares; and (iii) has a person directing the prospective investment who has such knowledge and experience in financial and business matters so that the family office is capable of evaluating the merits and risks of the prospective investment in the Common Shares (a “Family Office Director”).

 

The Subscriber agrees that the above representations and warranties will be true and correct both as of the execution of this Questionnaire and as of the Closing and acknowledges that they will survive the completion of the issue of the Common Shares.

 

The Subscriber acknowledges that the foregoing representations and warranties are made by the Subscriber with the intent that they be relied upon in determining the suitability of the Subscriber to acquire the Common Shares and that this Questionnaire is incorporated into and forms part of the Agreement and the undersigned undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the closing time of the purchase and sale of any of the Common Shares.

 

The Subscriber undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth in the Agreement or in this Questionnaire which takes place prior to the Closing.

 

By completing this Questionnaire, the Subscriber authorizes the indirect collection of this information by each applicable regulatory authority or regulator and acknowledges that such information is made available to the public under applicable laws.

 

DATED as of _______ day of_______________, 2022.

 

	Print Name of Subscriber (or person signing as agent of the Subscriber)
	By:
		Signature
	Print Name of Subscriber (or person signing as agent of the Subscriber)

 

 

exhibit "B"
TERM SHEET

 

McEwen Copper Inc.

 

Terms and Conditions of Non-Brokered Private Placement Offering

 

(All amounts shown in United States Currency)

Issuer:	McEwen Copper Inc. (the “Company”), a private Alberta company, wholly-owned by McEwen Mining Inc. (MUX: NYSE, TSX).   The Company owns a 100% interest in the development stage Los Azules copper property, located in San Juan Argentina and a 100% interest in the Elder Creek copper exploration property in Nevada.
Offering:	Private placement (the “Offering”) of a minimum of 4,000,000 to and a maximum of 8,000,000 common shares of the Company (the “Shares”), representing up to a 31% equity ownership of the Company post-financing based on a pre-money valuation of USD $175M.  A 1.25% NSR would be issued in favour of McEwen Mining Inc. following the closing of the Offering.
Price:	USD $10.00 per common share (the “Share Price”). USD $250,000 minimum subscription amount.  Lead order of USD $40,000,000 by Rob McEwen, Chief Owner of McEwen Mining Inc. personally.
Size of Offering:	Minimum of USD $40,000,000 to USD $80,000,000.
Use of Proceeds:	The net proceeds of the Offering will be used to: (i) to advance the project towards a pre-feasibility study and improve access to the Los Azules property, (ii) USD $3 million for exploration of the Elder Creek property, and (iii) for general corporate purposes.
Offering Jurisdictions:	The Offering will take place by way of a non-brokered private placement to qualified investors in all the provinces of Canada, excluding Quebec, to Qualified Institutional Buyers (as such term is defined in the United States Securities Act of 1933) in the United States and otherwise in those jurisdictions where the Offering can lawfully be made without subjecting the Company to registration or continuous disclosure requirements in such jurisdictions. Subscribers must be “accredited investors” (as defined in National Instrument 45-106 - Prospectus Exemptions (“NI 45-106”) and / or Regulation D promulgated under the U.S. Securities Act of 1933).
Hold Period:	The Company is not a reporting issuer in any province or territory of Canada or the United States. As such, the Shares will not be transferable under: (i) the laws of Canada, except pursuant to applicable statutory exemptions, until the date that is four months and a day after the date the Company becomes a reporting issuer in any province or territory of Canada (subject to any control person distribution restrictions) in accordance with National Instrument 45-102 – Resale of Securities, or (ii) the laws of the United States except in accordance with a registration statement or in accordance with an exemption from applicable U.S. federal and state registration requirements.
Commission:	Finder’s fees of up to 5% cash payable to arm’s length finders.
Conditions to be met on Closing:	The Offering shall be conditional upon each purchaser of Shares entering into a shareholder agreement in a form to be determined.
Closing Date:	Closing may be in one or more tranches as the Company may determine.

 

 

 

Exhibit 10.3

 

McEWEN COPPER INC.
(the "Issuer")

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
(COMMON SHARES)

 

INSTRUCTIONS TO SUBSCRIBER

 

1.

You must complete all the information in the boxes on page ii and sign where indicated with an "X".

 

2.

You must complete and sign Exhibit "A" - "Canadian Investor Questionnaire" that starts on page A-1. The purpose of this form is to determine whether you meet the standards for participation in a private placement under applicable Canadian securities laws. In order for the Issuer to satisfy its obligations under applicable Canadian securities laws, you may be required to provide additional evidence to verify the information you have provided in Exhibit "A" - "Canadian Investor Questionnaire" that starts on page A-1.

 

3.

Please make sure that your subscription includes:

 

(a)

a signed copy of this Subscription Agreement.

 

(b)

payment by certified cheque, money order, bank draft, wire transfer or other acceptable means in the amount of the Subscription Amount payable to "McEwen Copper Inc."

 

	Subscription Procedure:
	Completed Subscription Agreement and payment to be delivered to:   McEwen Copper Inc. 150 King Street West, S. 2800 Toronto, ON M5H 1J9   Attention:          Carmen Diges Email:                  [email protected]
	Wire Transfer Instructions:
	If paying by wire transfer, wire funds as follows:   Beneficiary Name: McEwen Copper Inc. Beneficiary Address: STE 2800, 150 KING ST W TORONTO, ON M5H 1J9 Beneficiary Account Number: Beneficiary Bank and Address: SWIFT: Bank Number: 003 Transit Number: 00002 Intermediary Bank and Address: SWIFT CODE: ABA NUMBER: SORT CODE //   Reference: McEwen Copper Inc. – subscription proceeds

 

- ii -

 

McEWEN COPPER INC.

 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

 

The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees to purchase from McEwen Copper Inc. (the "Issuer") the number of common shares in the capital of the Issuer (each, a "Common Share") on the terms set out in the Investor Term Sheet set out in Exhibit "B" that starts on page B-1. The Subscriber agrees to be bound by the terms and conditions set forth in the attached "Terms and Conditions of Subscription for Common Shares" (the "Terms and Conditions").

 

Subscriber Information		Common Shares to be Purchased     Number of Common Shares:
(Name of Subscriber)
X		Subscription Amount: US$                                                              (the "Subscription Amount")
(Signature of Authorized Signatory – if the Subscriber is not an Individual)       (Name and Title of Authorized Signatory – if the Subscriber is not an Individual)     (Subscriber's Address, including postal or zip code)         (Telephone Number)     (Email Address)
		If the Subscriber is subscribing as an agent on behalf of a beneficial purchaser (check the appropriate box):   ¨    the Subscriber is a trust company or trust corporation or a registered adviser acting on behalf of a fully managed account and deemed under applicable securities laws to be purchasing as principal, or   ¨    the following information is true and correct and, as applicable, Exhibit "A" hereto has been completed for each beneficial purchaser:   (Name of Beneficial Purchaser)   (Address of Beneficial Purchaser)   (Beneficial Purchaser's Telephone Number)   (Beneficial Purchaser's E-Mail Address)

 

Register the Common Shares as set forth below:   (Name to Appear on Share Certificate)   (Account Reference, if applicable)       (Address, including postal or zip code)

Deliver the Common Shares as set forth below:   (Attention - Name)   (Account Reference, if applicable)   (Street Address, including postal or zip code – no PO Boxes permitted)   (Telephone Number)

 

- iii -

 

ACCEPTANCE

 

The Issuer hereby accepts the Subscription (as defined herein) on the terms and conditions contained in this private placement subscription agreement (this "Agreement") as of the _____ day of ________________, 2022.

 

 

McEWEN COPPER INC.
Per:
	Authorized Signatory

 

 

TERMS AND CONDITIONS OF
SUBSCRIPTION FOR COMMON SHARES

 

1.

Subscription

 

1.1            On the basis of the representations and warranties, and subject to the terms and conditions, set forth in this Agreement, the Subscriber hereby irrevocably subscribes for and agrees to purchase the Common Shares for the Subscription Amount shown on page ii of this Agreement (such subscription and agreement to purchase the Common Shares being the "Subscription") by way of a private placement offering (the "Offering"), and the Issuer agrees to sell the Common Shares to the Subscriber, effective upon the Closing Date.

 

2.

Payment

 

2.1            The Subscription Amount must accompany this Subscription and be paid by a certified cheque, money order or bank draft drawn on a Canadian chartered bank or by wire transfer to the Issuer pursuant to the wire instructions provided by the Issuer in the Instructions to Subscriber on page i. The Subscriber authorizes the Issuer to treat the Subscription Amount as an interest free loan until the closing of the Offering (the "Closing").

 

2.2            The Subscriber acknowledges and agrees that this Agreement, the Subscription Amount and any other documents delivered in connection herewith will be held by or on behalf of the Issuer. In the event that this Agreement is not accepted by the Issuer for whatever reason, which the Issuer expressly reserves the right to do, the Issuer will return the Subscription Amount (without interest thereon) to the Subscriber at the address of the Subscriber as set forth on page ii of this Agreement, or as otherwise directed by the Subscriber, in writing, to the Issuer, prior to the return of the Subscription Amount by the Issuer.

 

3.

Documents Required from Subscriber

 

3.1            The Subscriber must complete, sign and return to the Issuer the following documents:

 

(a)

this Agreement;

 

(b)

the Canadian Investor Questionnaire (the "Questionnaire") attached as Exhibit "A" that starts on page A-1, along with any additional evidence that may be requested by the Issuer to verify the information provided in the Questionnaire; and

 

(c)

such other supporting documentation that the Issuer may request to establish the Subscriber's eligibility to participate in the Offering.

 

The Subscriber acknowledges and agrees that the Issuer will not consider the Subscription for acceptance unless the Subscriber has provided all of such documents to the Issuer.

 

3.2            As soon as practicable upon any request by the Issuer, the Subscriber will complete, sign and return to the Issuer any additional documents, questionnaires, notices and undertakings the Issuer may reasonably require or otherwise, may be required by any regulatory authorities or applicable laws.

 

 

4.

Conditions and Closing

 

4.1            The closing date (the "Closing Date") on such date as may be determined by the Issuer in its sole discretion. The Issuer may, at its discretion, elect to close the Offering in one or more closings, in which event the Issuer may agree with one or more purchasers (including the Subscriber) to complete delivery of the Common Shares to such purchaser(s) against payment therefor at any time on or prior to the Closing Date.

 

4.2            The Closing is conditional upon and subject to:

 

(a)

the Issuer having obtained any necessary third party approvals and consents for the Offering; and

 

(b)

the issue and sale of the Common Shares being exempt from the requirement to file a prospectus and the requirement to deliver an offering memorandum under applicable securities laws relating to the sale of the Common Shares, or the Issuer having received such orders, consents or approvals as may be required to permit such sale without the requirement to file a prospectus or deliver an offering memorandum.

 

4.3            The Subscriber acknowledges that the original share certificates representing the Common Shares ("Certificates") will be held by the Issuer in the Issuer's minute book. The Issuer will deliver electronic copies of the Certificates to the Subscriber within seven business days of the Closing Date, provided that the Subscriber has satisfied the requirements of Section 3.1 hereof and the Issuer has accepted this Agreement.

 

5.

Acknowledgements and Agreements of the Subscriber

 

5.1            The Subscriber acknowledges and agrees that:

 

(a)

no prospectus has been filed by the Issuer with any securities commission or any other regulatory authority in connection with the issuance of the Common Shares;

 

(b)

the Subscriber has not received, nor has the Subscriber requested nor had any need to receive, or been provided with a prospectus, offering memorandum or any document purporting to describe the business and affairs of the Issuer which has been prepared for review by prospective purchasers to assist in making an investment decision in respect of the Common Shares and that the Subscriber's decision, or, if applicable, the decision of others for whom the undersigned is contracting hereunder, to enter into this Agreement and to purchase the Common Shares from the Issuer is based entirely upon this Agreement and publicly available information concerning the Issuer and not upon any other verbal or written representation as to fact or otherwise made by or on behalf of the Issuer;

 

(c)

the Issuer's constating documents contain restrictions on the transfer of the Common Shares, which provide that no Common Shares may be transferred without the prior approval of the board of directors of the Issuer;

 

(d)

the Issuer is not a "reporting issuer" as that term is defined in applicable Canadian securities laws, nor will it become a reporting issuer in any jurisdiction in Canada or elsewhere upon completion of the Offering and, as a result:

 

 

(i)

unless the Issuer becomes a reporting issuer at a later date, the Issuer will not be subject to the continuous disclosure requirements of any securities laws, including any requirement relating to the production and filing of audited financial statements or other financial information, and

 

(ii)

any applicable hold periods under applicable securities laws may never expire, and the Common Shares may be subject to restrictions on resale for an indefinite period of time;

 

(e)

the issuance of the Common Shares will be made pursuant to exemptions from the registration and prospectus requirements of applicable Canadian securities laws and therefore:

 

(i)

the Subscriber is restricted from using most of the civil remedies available under applicable securities laws,

 

(ii)

the Subscriber may not receive information about the Issuer that would otherwise be required to be provided to it under applicable securities laws,

 

(iii)

the Issuer is relieved from certain obligations that would otherwise apply under applicable securities laws,

 

(iv)

no securities commission or similar regulatory authority has reviewed or passed on the merits of the Common Shares,

 

(v)

there is no government or other insurance covering the Common Shares, and

 

(vi)

there are risks associated with the purchase of the Common Shares, including that the Subscriber may lose the Subscriber's entire investment;

 

(f)

an investment in the Issuer is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Issuer and the Common Shares;

 

(g)

any subscription monies paid by the Subscriber for the Common Shares is being raised as "seed" or "risk" capital for the Issuer, which is in a speculative stage, and there is no market for the Common Shares whatsoever;

 

(h)

none of the Common Shares have been or will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or under any securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to any U.S. Person (as defined in Section 6.2) except in accordance with the provisions of Regulation S under the 1933 Act ("Regulation S"), pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, and in each case only in accordance with any other applicable state, provincial and foreign securities laws;

 

(i)

the Issuer has not undertaken, and will have no obligation, to register any of the Common Shares under the 1933 Act or any other securities laws;

 

 

(j)

the Issuer will refuse to register the transfer of any of the Common Shares to a U.S. Person not made pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act, and in each case will only register such transfer in accordance with applicable laws;

 

(k)

it will hold harmless the Issuer from any loss or damage it may suffer as a result of the Subscriber's failure to correctly complete this Agreement or the Questionnaire;

 

(l)

it and its advisor(s) have had a reasonable opportunity to ask questions of, and receive answers from, the Issuer in connection with the distribution of the Common Shares hereunder, and to obtain additional information, to the extent possessed or obtainable by the Issuer without unreasonable effort or expense;

 

(m)

the books and records of the Issuer were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the Subscriber during reasonable business hours at the Issuer's principal place of business, and all documents, records and books in connection with the distribution of the Common Shares hereunder have been made available by the Issuer for inspection by the Subscriber, its legal counsel and/or its advisor(s) if requested by the Subscriber;

 

(n)

any resale, assignment, transfer, hypothecation or pledge of any of the Common Shares by the Subscriber will be subject to: (i) resale restrictions contained in the securities laws applicable to the Issuer, the Subscriber and any proposed transferee; and (ii) the Issuer's constating documents and it is the responsibility of the Subscriber to find out what those restrictions are and to comply with such restrictions before selling any of the Common Shares;

 

(o)

it consents to the placement of a legend or legends on the Certificates and any other document evidencing any of the Common Shares setting forth the restrictions on transferability and sale thereof contained in this Agreement, including the following:

 

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE CONSTATING DOCUMENTS OR UNANIMOUS SHAREHOLDER AGREEMENT OF THE COMPANY.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED HEREBY MUST NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (I) [insert Closing Date] AND (II) THE DATE THAT THE COMPANY BECOMES A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY IN CANADA.";

 

(p)

it has been advised to consult its own legal, tax and other advisors with respect to the Offering and the risks of an investment in the Common Shares and with respect to applicable resale restrictions, and it is solely responsible (and the Issuer is not in any way responsible) for compliance with:

 

(i)

any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Common Shares hereunder, and

 

(ii)

any applicable resale restrictions;

 

 

(q)

there may be material tax consequences to the Subscriber of an acquisition or disposition of the Common Shares and the Issuer gives no opinion and makes no representation to the Subscriber with respect to the tax consequences to the Subscriber under federal, state, provincial, local or foreign tax laws that may apply to the Subscriber's acquisition or disposition of any of the Common Shares;

 

(r)

the Issuer is relying on one of the "Accredited Investor" exemption or the "Minimum Amount Investment" exemption from the prospectus requirements as set out in National Instrument 45-106 – Prospectus Exemptions ("NI 45-106") adopted by the Canadian Securities Administrators or subsection 73.4(2) of the Securities Act (Ontario), as applicable, which, among other restrictions, impose: (i) a transfer restriction on the Common Shares to the effect that, for so long as the Issuer is not a reporting issuer, the Common Shares are subject to restrictions on transfer that are contained in the Issuer's constating documents; and (ii) a requirement to legend the Certificates representing the Common Shares to reflect such transfer restriction;

 

(s)

there is no market for any of the Common Shares and no market for any of the Common Shares may ever exist;

 

(t)

the Issuer intends to grant a 1.25% net smelter return royalty in favour of McEwen Mining Inc. as provided for in Exhibit “B” to this Agreement, and the Subscriber agrees and accepts this term as a condition of the acceptance of its subscription by the Issuer; and

 

(u)

this Agreement is not enforceable by the Subscriber unless it has been accepted by the Issuer and the Issuer reserves the right to reject this Subscription for any reason.

 

6.

Representations and Warranties of the Subscriber

 

6.1

The Subscriber hereby represents and warrants to the Issuer (which representations and warranties will survive the Closing) that:

 

(a)

the Subscriber is not a U.S. Person;

 

(b)

the Subscriber is resident in the jurisdiction set out on page ii of this Agreement;

 

(c)

if the Subscriber is resident outside of Canada:

 

(i)

the Subscriber is knowledgeable of, or has been independently advised as to, the applicable securities laws having application in the jurisdiction in which the Subscriber is resident (the "International Jurisdiction") which would apply to the offer and sale of the Common Shares,

 

(ii)

the Subscriber is acquiring the Common Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the Subscriber is permitted to acquire the Common Shares under the applicable laws of the International Jurisdiction without the need to rely on any exemptions,

 

(iii)

the applicable laws of the authorities in the International Jurisdiction do not require the Issuer to make any filings or seek any approvals of any kind from any securities regulator in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Common Shares,

 

 

(iv)

the acquisition of the Common Shares by the Subscriber does not trigger:

 

(A)

any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase, in the International Jurisdiction, or

 

(B)

any continuous disclosure reporting obligation of the Issuer in the International Jurisdiction, and

 

(v)

the Subscriber will, if requested by the Issuer, deliver to the Issuer a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv), above, to the satisfaction of the Issuer, acting reasonably;

 

(d)

the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;

 

(e)

the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

 

(f)

the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber in accordance with its terms;

 

(g)

the Subscriber has received and carefully read this Agreement;

 

(h)

the Subscriber acknowledges receipt of a copy of the unanimous shareholder agreement of the Issuer and acknowledges that it is a condition of becoming a shareholder of the Issuer that the Subscriber must become a party to such unanimous shareholder agreement;

 

(i)

the Subscriber is aware that an investment in the Issuer is speculative and involves certain risks, including the possible loss of the entire investment;

 

(j)

the Subscriber is not aware of any advertisement of any of the Common Shares and is not acquiring the Common Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;

 

 

(k)

the Subscriber has made an independent examination and investigation of an investment in the Common Shares and the Issuer and agrees that the Issuer will not be responsible in any way for the Subscriber’s decision to invest in the Common Shares and the Issuer;

 

(l)

no person has made to the Subscriber any written or oral representations:

 

(i)

that any person will resell or repurchase any of the Common Shares,

 

(ii)

that any person will refund the purchase price of any of the Common Shares, or

 

(iii)

as to the future price or value of any of the Common Shares; and

 

(m)

other than as provided in the term sheet attached as Exhibit “B” to this Agreement, there is no person acting or purporting to act in connection with the Offering who is entitled to any brokerage or finder's fee payable by the Issuer. If any person establishes a claim that any fee or other compensation is payable by the Issuer in connection with this subscription for the Common Shares, the Subscriber or any beneficial purchaser for whom the undersigned is acting covenants to indemnify and hold harmless the Issuer with respect thereto and with respect to all costs reasonably incurred in the defence thereof.

 

6.2            In this Agreement, the term "U.S. Person" has the meaning ascribed thereto in Regulation S, and for the purpose of this Agreement includes: (i) any person in the United States; (ii) any natural person resident in the United States; (iii) any partnership or corporation organized or incorporated under the laws of the United States; (iv) any partnership or corporation organized outside the United States by a U.S. Person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts; or (v) any estate or trust of which any executor, administrator or trustee is a U.S. Person.

 

7.

Representations and Warranties will be Relied Upon

 

7.1            The Subscriber acknowledges that its representations and warranties contained herein and in the Questionnaire are made by it with the intention that such representations and warranties will be relied upon by the Issuer in determining the Subscriber's eligibility to purchase the Common Shares under applicable laws, or (if applicable) the eligibility of others on whose behalf the Subscriber is contracting hereunder to purchase the Common Shares under applicable laws. The Subscriber further agrees that, as at the Closing, it will be representing and warranting that its representations and warranties contained herein and in the Questionnaire are true and correct as at the Closing with the same force and effect as if they had been made by the Subscriber on the Closing, and that they will survive the purchase by the Subscriber of the Common Shares and will continue in full force and effect notwithstanding any subsequent disposition by the Subscriber of the Common Shares.

 

8.

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

8.1            The Issuer hereby represents and warrants to the Subscriber (which representations and warranties will survive the Closing) that:

 

(a)

the Issuer is validly subsisting under the laws of its jurisdiction of incorporation, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary and carries on its business in the ordinary course and in compliance in all material respects with all applicable laws, rules and regulations of each such jurisdiction;

 

 

(b)

on the Closing Date, the Issuer will have taken all corporate steps and proceedings necessary to duly approve the transactions contemplated under this Subscription Agreement, including its execution and delivery;

 

(c)

the Issuer has not received notice from any applicable regulatory authority that it is in default of any Securities Laws material to the Subscriber;

 

(d)

at the time of closing on the Closing Date, the Common Shares will be duly and validly created, authorized and issued; will be validly issued as fully paid as non-assessable Common Shares in the capital of the Issuer;

 

(e)

the Issuer is authorized to issue an unlimited number of Common Shares; as of the date of this Subscription Agreement, 21,500,000 Common Shares are issued and outstanding to Minera Andes Inc. (17,500,000 Common Shares), and Evanachan Limited (4,000,000 Common Shares); the issuance and sale of the Common Shares by the Issuer and the fulfilment of the terms hereof does not and will not conflict with or constitute a breach of or default under (i) the constating documents of the Issuer or its Material Subsidiaries (as defined below), (ii) any applicable law, regulation, order or ruling or (ii) any agreement, contract or indenture, including any covenants or provisions respecting the Issuer’s right to issue additional equity, or any pre-emptive right or similar rights therein, to which the Issuer or any of its Material Subsidiaries (as defined below) is a party or by which it is bound, or to which any of the property or assets of the Issuer or any of its Material Subsidiaries (as defined below) is subject;

 

(f)

this Subscription Agreement, when signed by the Issuer, constitutes a binding and enforceable obligation of the Issuer, enforceable in accordance with its terms;

 

(g)

Exhibit “C” accurately shows (i) each direct and indirect subsidiary of the Issuer (collectively, “Material Subsidiaries”); (ii) the registered holders of all of the issued and outstanding shares in the capital of each of the Material Subsidiaries; and (iii) the numbers and classes of shares currently held by each such registered holder and the percentage in the outstanding capital of each Material Subsidiary;

 

(h)

Other than the obligations and security provided in the amended and restated credit agreement among McEwen Mining Inc., Sprott Private Resource Lending II (Collector), LP as lender and as Administrative Agent, and Evanachan Limited, a copy of which the Subscriber acknowledges having received, the Issuer owns all of the issued and outstanding securities of the Material Subsidiaries, free and clear of any encumbrances and defects, and has no other subsidies. All of the outstanding equity interests in the Material Subsidiaries have been duly authorized and validly issued and all of such equity interests are outstanding as fully paid and non-assessable shares. There exist no options, warrants, purchase rights, or other contracts or commitments that would require the Company or any other person to sell, transfer or otherwise dispose of any equity interests of the Material Subsidiaries or for the issue or allotment of any unissued shares in the capital of the Material Subsidiaries or any other security convertible into or exchangeable for any such shares;

 

(i)

each of the Material Subsidiaries has been duly incorporated or established and is validly existing and in good standing under the laws of its respective jurisdiction of organization with all requisite corporate power and authority to own, use, lease and operate its properties and conduct its business in the manner currently conducted, and is duly qualified to transact business in each jurisdiction where it carries its business;

 

 

(j)

the Issuer and its Material Subsidiaries (i) are conducting their business operations in material compliance with applicable laws, rules and regulations, including without limitation those of the country, province and municipality in which such entity carries on business or conducts its activities; (ii) have received and hold all material permits, by-laws, licenses, waivers, exemptions, consents, certificates, registrations, rights, rights of way, entitlements and other approvals which are required from any governmental or regulatory authority or any other person necessary to the conduct of their business and activities as currently conducted, and to the conduct of their business as proposed to be conducted pursuant to the use of funds proposal underlying the proposed placement, including but not limited to those required under applicable mining and environmental laws (“Authorizations”); and (iii) are in material compliance with all terms and conditions of such Authorizations, and such Authorizations are in full force and effect in all material respects; and (iv) have not received any notice of the modification, suspension, revocation, cancellation or non-renewal of, or any intention to modify, suspend, revoke, cancel or not renew or any proceeding relating to the modification, suspension, revocation, cancellation or non-renewal of any such Authorizations, and no Authorizations will be subject to modification, suspension, revocation, cancellation or non-renewal as a result of the execution and delivery of this Subscription Agreement or the Closing;

 

(k)

except to the extent qualified by the opinion of Vargas Galindez dated May 20, 2022 (the “Vargas Opinion”), which the Subscriber acknowledges having received, the Issuer and each of its Material Subsidiaries (i) own, hold or lease all such properties as are necessary to the conduct of their respective businesses as currently operated, and to the conduct of their business as proposed to be conducted pursuant to the use of funds proposal underlying the proposed placement; and (ii) have good and marketable title under applicable laws to all real property and good and marketable title to all personal property owned by them that constitute the Los Azules Project and the Elder Creek Project and to all material personal property owned by them in the conduct of their business on the Los Azules Project and the Elder Creek Project, in each case free and clear of all liens, encumbrances and defects; and any real property and buildings to be held under lease or sublease by the Issuer and the Material Subsidiaries are held by them under valid, subsisting and enforceable leases; [(A) the “Los Azules Project” means the Issuer’s copper exploration and development project, located in the San Juan Province, Argentina, as described in the technical report entitled “SEC S-K 229.1304 Initial Assessment Individual Disclosure for the Los Azules Project, Argentina” with an effective reporting date of September 1, 2017 prepared by Mining Plus; and (B) the “Elder Creek Project” means the Issuer’s copper and gold exploration and development project located near Elder Creek, Nevada, USA;

 

(l)

except to the extent qualified by the opinion of Vargas Opinion, all interests in material mining claims, concessions, exploration, reconnaissance, exploitation or extraction rights, surface rights, subsurface rights or similar rights, (“Mining Claims”) that are held by the Issuer or any of the Material Subsidiaries, held by way of Authorizations or otherwise, are in good standing, are valid and enforceable, are free and clear of any encumbrances and no royalty is payable in respect of any of them, except as disclosed under this Subscription Agreement and the Vargas Opinion; no other material property rights are necessary for the conduct of the business as currently conducted, or for the conduct of the business as proposed to be conducted pursuant to the use of funds proposal underlying the proposed placement, in each case by the Issuer and the Material Subsidiaries; except as provided in the Vargas Opinion, there are no material restrictions on the ability of the Issuer and the Material Subsidiaries to use, transfer or otherwise exploit any such property rights;

 

 

(m)

except as set out in the Vargas Opinion, there are no material claims, actions, suits, arbitration, administration or other proceedings to which the Issuer or any of its Material Subsidiaries is a party or of which any property, including Authorizations and Mining Claims, of the Issuer or any of its Material Subsidiaries is the subject; and, no such proceedings are threatened or pending by governmental authorities or any other person; there is no agreement, judgment, injunction, order or decree binding upon the Issuer or its Material Subsidiaries that has or would reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of the Issuer or its Material Subsidiaries;

 

(n)

no dispute between the Issuer or the Material Subsidiaries and any local, native or indigenous group exists or to the knowledge of the Issuer is threatened or imminent with respect to the Los Azules Project and the Elder Creek Project or the business activities of the Issuer and the Material Subsidiaries that could reasonably be expected to have a material adverse effect;

 

(o)

the Issuer’s unaudited financial statements for the period ending December 31, 2021 have been prepared in accordance with [International Financial Reporting Standards (“IFRS”)] and present fairly the consolidated financial position and results of operation and changes in the financial position of the Issuer and its Material Subsidiaries and such accounts fairly present in all material respects the financial condition, financial performance and cash flows of the Issuer for the periods indicated; neither the Issuer nor the Material Subsidiaries have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise required to be disclosed under IFRS, which are not disclosed in the Issuer’s financial statements;

 

(p)

the audited consolidated financial statements for Andes Corporation Minera S.A (“ACM”) for the period ending December 31, 2021 are prepared in accordance with Argentine GAAP and present fairly the consolidated financial position and results of operation and changes in the financial position of ACM and its subsidiaries and such accounts fairly present in all material respects the financial condition, financial performance and cash flows of ACM for the periods indicated; as at the Closing Date, neither ACM nor its subsidiaries have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise required to be disclosed under Argentine GAAP, which are not disclosed in ACM’s financial statements and each of ACM and its subsidiaries have conducted their respective businesses in the ordinary course since December 31, 2021 until the Closing Date;

 

(q)

the Issuer and the Material Subsidiaries have accurately prepared and timely filed all federal, provincial, local and foreign tax returns which are required to be filed, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against them, to the extent that any of the foregoing is due and payable;

 

(r)

there are no liens for taxes on the assets of the Issuer or the Material Subsidiaries, there are no audits of any of the tax returns of the Issuer or the Material Subsidiaries reasonably expected to have a material adverse effect on the properties, business or assets of the Issuer or the Subsidiaries which are pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any government agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer or the Material Subsidiaries;

 

 

(s)

neither the Issuer nor any of its Material Subsidiaries are insolvent or in liquidation or administration or subject to any other insolvency procedure and no receiver, manager, trustee, custodian or analogous officer has been appointed in respect of all or any part of its property, undertaking or assets; neither steps have been taken nor legal, legislative or administrative proceedings have been started or threatened to wind up, dissolve, make dormant, or eliminate the Issuer or any of its Material Subsidiaries; and the Issuer does not have any knowledge of any event or circumstance that could reasonably be expected to lead to or result in the winding up, liquidation, dissolution, elimination or insolvency of the Issuer or any Material Subsidiary; and

 

(t)

the data or information with respect to the business and activities of the Issuer and Material Subsidiaries disclosed on the EDGAR system by McEwen Mining Inc. is complete and correct in all material respects and did not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statement contained therein not misleading in the circumstances.

 

(u)

the data or information made available to Subscriber by or on behalf of the Issuer: (i) does not, when taken as a whole, create a false impression of the development and operations of the Los Azules Project and the Elder Creek Project as at the date of this Subscription Agreement, (ii) was, to the knowledge of the Issuer at the time when such data or information was created by or for the Issuer, accurate in all material respects, and (iii) was prepared in good faith for the purposes of informing the Subscriber about the business and activities of the Issuer and Material Subsidiaries and in doing so, the Issuer has not:

 

(i)

omitted anything that the Issuer, acting reasonably, considers is material from such data or information; or

 

(ii)

included anything that the Issuer, acting reasonably, considers is materially misleading in such data or information.

 

9.

Waiver

 

9.1            The Subscriber hereby waives, to the fullest extent permitted by law, any rights of withdrawal, rescission or compensation for damages to which the Subscriber may be entitled in connection with the distribution of any of the Common Shares.

 

10.

Pooling or Escrow of COMMON Shares and Power of Attorney

 

10.1          The Subscriber acknowledges that the Issuer is not currently a reporting issuer in any jurisdiction. If the Issuer completes an initial public offering that results in the Common Shares or other securities in the capital of the Issuer becoming listed on a stock exchange in Canada or the United States of America, or the Issuer completes a reverse takeover, statutory merger or amalgamation, arrangement, share exchange, business combination or other similar transaction which results in a class of shares of the issuer resulting from such transaction being listed (the "Resulting Issuer") on a stock exchange in Canada or the United States of America and the shareholders of the Issuer receiving such listed securities of the Resulting Issuer and/or cash in exchange for their Common Shares (in each case, a "Liquidity Event"), the Common Shares may be required to be pooled or escrowed, either at the request of the Issuer's selling agent or underwriter in connection with the Liquidity Event, or pursuant to the rules of any stock exchange, securities commission or other securities regulatory authority having jurisdiction, and the Subscriber agrees to sign any such pooling or escrow agreement and abide by any such restrictions as may be so imposed.

 

 

10.2          In furtherance of the covenant in Section 10.1, the Subscriber hereby irrevocably appoints the Chief Executive Officer or the President of the Issuer, as exists at the applicable time (in any case, the "President"), as the Subscriber's attorney-in-fact, and authorizes the President as the Subscriber's attorney-in-fact, with full power and authority in the Subscriber's place and stead, to approve and sign any pooling or escrow agreement, or any other document, on behalf of the Subscriber as the Issuer advises may be required to provide for pooling or escrow of the Common Shares, or the approval and completion of any Liquidity Event, as the case may be, in the event of a Liquidity Event or other transaction pursuant to which the Issuer may become listed, directly or indirectly, on any stock exchange. This 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 by the Subscriber. This power of attorney and other rights and privileges granted hereunder will survive any legal or mental incapacity, dissolution, bankruptcy or death of the Subscriber. This power of attorney extends to the heirs, executors, administrators, other legal representatives and successors, transferees and assigns of the Subscriber. Any person dealing with the Issuer may conclusively presume and rely upon the fact that any document, instrument or agreement executed by the President pursuant to this power of attorney is authorized and binding on the Subscriber, without further inquiry. The Subscriber (on its own behalf and, if applicable, on behalf of each beneficial purchaser on whose behalf it is contracting) agrees to be bound by any representations or actions made or taken by the President pursuant to this power of attorney, and waives any and all defences that may be available to contest, negate or disaffirm any action of the President taken in good faith under this power of attorney.

 

11.

Collection of Personal Information

 

11.1          The Subscriber acknowledges and consents to the fact that the Issuer is collecting the Subscriber's personal information for the purpose of fulfilling this Agreement and completing the Offering. The Subscriber acknowledges that its personal information (and, if applicable, the personal information of any person on whose behalf the Subscriber is contracting hereunder) may be included in record books in connection with the Offering and may be disclosed by the Issuer to: (i) stock exchanges or securities regulatory authorities; (ii) the Issuer's registrar and transfer agent; (iii) Canadian tax authorities; (iv) authorities pursuant, among other legislation, to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and (v) any other parties involved in the Offering, including the Issuer's Counsel. By executing this Agreement, the Subscriber is deemed to be consenting to the foregoing collection, use and disclosure of the Subscriber's personal information (and, if applicable, the personal information of any other person on whose behalf the Subscriber is contracting hereunder) for the foregoing purposes and to the retention of such personal information for as long as permitted or required by applicable laws. Notwithstanding that the Subscriber may be purchasing the Common Shares as agent on behalf of an undisclosed principal, the Subscriber agrees to provide, on request, particulars as to the nature and identity of such undisclosed principal, and any interest that such undisclosed principal has in the Issuer, all as may be required by the Issuer in order to comply with the foregoing. Furthermore, the Subscriber is hereby notified that:

 

(a)

the Issuer may deliver to any securities commission having jurisdiction over the Issuer, the Subscriber or this Subscription, including any Canadian provincial securities commissions, the United States Securities and Exchange Commission and/or any state securities commissions (collectively, the "Commissions"), certain personal information pertaining to the Subscriber, including the Subscriber's full name, residential address and telephone number, the number of securities of the Issuer owned by the Subscriber, the number of Common Shares purchased by the Subscriber, the total Subscription Amount paid, the prospectus exemption relied on by the Issuer and the date of distribution of the Common Shares;

 

 

(b)

such information is being collected indirectly by the Commissions under the authority granted to them in applicable securities laws;

 

(c)

such information is being collected for the purposes of the administration and enforcement of applicable securities laws; and

 

(d)

in Ontario, the Administrative Support Clerk, Suite 1903, Box 55, 20 Queen Street West, Toronto ON, M5H 3S8, Telephone: (416) 593-3684 in the public official who can answer questions about the collection of personal information.

 

12.

Costs

 

12.1          The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any legal counsel or tax or financial advisors retained by the Subscriber) relating to the purchase of the Common Shares will be paid by the Subscriber.

 

13.

Delivery of Subscription Agreement

 

13.1          The Issuer and the Issuer's Counsel will be entitled to rely on delivery by DocuSign or other means of electronic communication of an executed copy of this Agreement, and acceptance by the Issuer of such copy will be equally effective to create a valid and binding agreement between the Subscriber and the Issuer in accordance with the terms hereof. If less than a complete copy of this Agreement is delivered to the Issuer or the Issuer's Counsel prior to or at Closing, the Issuer and the Issuer's Counsel are entitled to assume that the Subscriber accepts and agrees to all of the terms and conditions of the pages not delivered prior to or at Closing as written herein, unaltered.

 

13.2          The Subscriber hereby authorizes the Issuer to correct any minor errors in, or complete any minor information missing from, any part of this Agreement and any other acknowledgements, provisions, forms, certificates or documents executed by the Subscriber and delivered to the Issuer or the Issuer's Counsel in connection with the Subscription.

 

14.

Beneficial Subscribers

 

14.1          Whether or not explicitly stated in this Agreement, any acknowledgement, representation, warranty, covenant or agreement made by the Subscriber in this Agreement, including the exhibits and appendices hereto, will be treated as if made by the disclosed principal, if any.

 

15.

Governing Law

 

15.1          This Agreement and all matters related hereto or arising herefrom are governed by the laws of the Province of Alberta and the federal laws of Canada applicable therein. The Subscriber, in its personal or corporate capacity and, if applicable, on behalf of each beneficial or undisclosed purchaser for whom it is acting, irrevocably attorns to the exclusive jurisdiction of the courts of the Province of Alberta in all matters related to, or arising from, this Agreement.

 

 

16.

Survival

 

16.1          This Agreement, including the representations, warranties and covenants contained herein, will survive and continue in full force and effect and be binding upon the Issuer and the Subscriber, notwithstanding the completion of the purchase of the Common Shares by the Subscriber.

 

17.

Assignment

 

17.1          This Agreement is not transferable or assignable.

 

18.

Severability

 

18.1          The invalidity or unenforceability of any particular provision of this Agreement will not affect or limit the validity or enforceability of the remaining provisions of this Agreement.

 

19.

Entire Agreement

 

19.1          Except as expressly provided in this Agreement and in the Questionnaire and any other documents contemplated or provided for herein, this Agreement contains the entire agreement between the Issuer and the Subscriber with respect to the sale of the Common Shares and there are no other terms, conditions, representations or warranties, whether expressed, implied, oral or written, by statute or common law, by or of the Issuer or any other person.

 

20.

Notices

 

20.1          All notices and other communications hereunder will be in writing and will be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication, including DocuSign, electronic mail or other means of electronic communication capable of producing a printed copy. Notices to the Subscriber will be directed to the address of the Subscriber set forth on page ii of this Agreement and notices to the Issuer will be directed to the address of the Issuer set forth on the first page of this Agreement.

 

21.

Counterparts and Electronic Means

 

21.1          This Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, will constitute an original and all of which together will constitute one instrument. Delivery of an executed copy of this Agreement by DocuSign or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the Closing Date.

 

22.

Exhibits

 

22.1          The exhibits and appendices attached hereto form part of this Agreement.

 

 

23.

Indemnity

 

The Subscriber will indemnify and hold harmless the Issuer and, where applicable, its directors, officers, employees, agents, advisors and shareholders, from and against any and all loss, liability, claim, damage and expense whatsoever (including any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation, whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained in this Agreement, the Questionnaire, or in any document furnished by the Subscriber to the Issuer in connection herewith being untrue in any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber to the Issuer in connection therewith.

 

 

Exhibit "A"
CANADIAN INVESTOR QUESTIONNAIRE

 

Capitalized terms used in this Canadian Investor Questionnaire (this "Questionnaire") and not specifically defined have the meaning ascribed to them in the Private Placement Subscription Agreement (the "Agreement") between the undersigned (or, if the undersigned is purchasing the Common Shares as agent on behalf of a disclosed beneficial purchaser, such beneficial purchaser) (in any case, the "Subscriber") and McEwen Copper Inc. (the "Issuer") to which this Exhibit "A" is attached.

 

In connection with the purchase by the Subscriber of the Common Shares, the Subscriber hereby represents, warrants and certifies to the Issuer that the Subscriber:

 

(i)

is acquiring the Common Shares as principal (or deemed principal under the terms of National Instrument 45-106 – Prospectus Exemptions adopted by the Canadian Securities Administrators ("NI 45-106"));

 

(ii)

is resident in the jurisdiction set out as at the "Subscriber's Address" set out on page ii of the Agreement; and

 

(iii)

has not been provided with any offering memorandum in connection with the purchase of the Common Shares.

 

In connection with the acquisition of the Common Shares, the Subscriber hereby represents, warrants and certifies to, and covenants and agrees with, the Issuer that the Subscriber meets one or more of the following criteria:

 

I.

SUBSCRIBERS PURCHASING UNDER THE "ACCREDITED INVESTOR" EXEMPTION

 

the Subscriber is an "accredited investor" within the meaning of NI 45-106, by virtue of satisfying the indicated criterion below (YOU MUST PLACE A CHECK-MARK ON THE APPROPRIATE LINE(S)) (see certain guidance with respect to accredited investors that starts on page 19 below)

 

 

	¨	(a)	except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer,
	¨	(b)	an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (a),
	¨	(c)	an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador),
	¨	(d)	an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1,000,000 (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT A OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A-9),
	¨	(e)	an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5,000,000,

 

 

	¨	(f)	an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT A OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A-9),
	¨	(g)	an individual who, either alone or with a spouse, has net assets of at least $5,000,000 (YOU MUST ALSO COMPLETE AND SIGN APPENDIX "A" TO EXHIBIT OF THIS QUESTIONNAIRE THAT STARTS ON PAGE A -9),
	¨	(h)	a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements and that has not been created or used solely to purchase or hold securities as an accredited investor as defined in this paragraph (h),

 

¨

(i)

an investment fund that distributes or has distributed its securities only to:

 

(i)

a person that is or was an accredited investor at the time of the distribution,

 

(ii)

a person that acquires or acquired securities in the circumstances referred to in Sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45-106, or

 

	(iii)	a person described in paragraph (i) or (ii) that acquires or acquired securities under Section 2.18 [Investment fund reinvestment] of NI 45-106,

 

	¨	(j)	an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt,
	¨	(k)	a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be,
	¨	(l)	a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction,
	¨	(m)	a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded,
	¨	(n)	an entity organized in a foreign jurisdiction that is analogous to an entity referred to in paragraph (a) in form and function, or
	¨	(o)	a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

 

 

II.	SUBSCRIBERS PURCHASING UNDER THE MINIMUM AMOUNT INVESTMENT
(a)	the Subscriber is not an individual as that term is defined in applicable Canadian securities laws,
(b)	the Subscriber is purchasing the Common Shares as principal for its own account and not for the benefit of any other person,
(c)	the Common Shares have an acquisition cost to the Subscriber of not less than $150,000, payable in cash at the Closing, and
(d)	the Subscriber was not created and is not being used solely to purchase or hold securities in reliance on the prospectus exemption provided under Section 2.10 of NI 45-106, it pre-existed the Offering and has a bona fide purpose other than investment in the Common Shares.

 

DEFINITIONS

 

For the purposes of this Questionnaire and Appendix "A" attached to this Questionnaire:

 

(a)            "control person" means

 

(i)

a person who holds a sufficient number of the voting rights attached to all outstanding voting securities of an Issuer to affect materially the control of the Issuer, or

 

(ii)

each person in a combination of persons, acting in concert by virtue of an agreement, arrangement, commitment or understanding, which holds in total a sufficient number of the voting rights attached to all outstanding voting securities of an Issuer to affect materially the control of the Issuer,

 

and, if a person or combination of persons holds more than 20% of the voting rights attached to all outstanding voting securities of an Issuer, the person or combination of persons is deemed, in the absence of evidence to the contrary, to hold a sufficient number of the voting rights to affect materially the control of the Issuer;

 

(b)            "director" means

 

(i)

a member of the board of directors of a company or an individual who performs similar functions for a company, and

 

(ii)

with respect to a person that is not a company, an individual who performs functions similar to those of a director of a company;

 

(c)            "eligibility adviser" means

 

(i)

a person that is registered as an investment dealer and authorized to give advice with respect to the type of security being distributed, and

 

(ii)

in Saskatchewan or Manitoba, also means a lawyer who is a practicing member in good standing with a law society of a jurisdiction of Canada or a public accountant who is a member in good standing of an institute or association of chartered accountants, certified general accountants or certified management accountants in a jurisdiction of Canada provided that the lawyer or public accountant must not:

 

(A)

have a professional, business or personal relationship with the Issuer, or any of its directors, executive officers, founders or control persons, and

 

 

(B)

have acted for or been retained personally or otherwise as an employee, executive officer, director, associate or partner of a person that has acted for or been retained by the Issuer or any of its directors, executive officers, founders or control persons within the previous 12 months;

 

(d)            "executive officer" means, for an Issuer, an individual who is

 

(i)

a chair, vice-chair or president,

 

(ii)

a vice-president in charge of a principal business unit, division or function including sales, finance or production, or

 

(iii)

performing a policy-making function in respect of the Issuer;

 

(e)            "financial assets" means

 

(i)

cash,

 

(ii)

securities, or

 

(iii)

a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation;

 

(f)

"foreign jurisdiction" means a country other than Canada or a political subdivision of a country other than Canada;

 

(g)            "founder" means, in respect of an Issuer, a person who,

 

(i)

acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the Issuer, and

 

(ii)

at the time of the distribution or trade is actively involved in the business of the Issuer;

 

(h)

"fully managed account" means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client's express consent to a transaction;

 

(i)

"individual" means a natural person, but does not include

 

(i)

a partnership, unincorporated association, unincorporated syndicate, unincorporated organization or trust, or

 

(ii)

a natural person in the person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

(j)

"investment fund" means a mutual fund or a non-redeemable investment fund, and, for greater certainty in British Columbia, includes an employee venture capital corporation and a venture capital corporation as such terms are defined in National Instrument 81-106 Investment Fund Continuous Disclosure;

 

(k)

"jurisdiction" or "jurisdiction of Canada" means a province or territory of Canada except when used in the term foreign jurisdiction;

 

(l)

"non-redeemable investment fund" means an Issuer:

 

(i)

whose primary purpose is to invest money provided by its securityholders,

 

(ii)

that does not invest

 

 

(A)

for the purpose of exercising or seeking to exercise control of an Issuer, other than an Issuer that is a mutual fund or a non-redeemable investment fund, or

 

(B)

for the purpose of being actively involved in the management of any Issuer in which it invests, other than an Issuer that is a mutual fund or a non-redeemable investment fund, and

 

(iii)

that is not a mutual fund;

 

(m)

"person" includes

 

(i)

an individual,

 

(ii)

a corporation,

 

(iii)

a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and

 

(iv)

an individual or other person in that person's capacity as a trustee, executor, administrator or personal or other legal representative;

 

(n)

"related liabilities" means

 

(i)

liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or

 

(ii)

liabilities that are secured by financial assets; and

 

(o)

"spouse" means, an individual who,

 

(i)

is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,

 

(ii)

is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or

 

(iii)

in Alberta, is an individual referred to in paragraph (i) or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta).

 

Guidance On Accredited Investor Exemptions for Individuals

 

An individual accredited investor is an individual:

 

(a)

who, either alone or with a spouse, beneficially owns financial assets (please see the guidance below regarding what financial assets are) having an aggregate realizable value that. before taxes but net of any related liabilities (please see the guidance below regarding what related liabilities are), exceeds $1,000,000;

 

(b)

whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

 

(c)

who, either alone or with a spouse, has net assets (please see the guidance below regarding calculating net assets) of at least $5,000,000; and

 

 

(d)

who beneficially owns financial assets (please see the guidance below regarding what financial assets are) having an aggregate realizable value that, before taxes but net of any related liabilities (please see the guidance below regarding what related liabilities are), exceeds $5,000,000.

 

The monetary thresholds above are intended to create bright-line standards. Subscribers who do not satisfy these monetary thresholds do not qualify as accredited investors.

 

Spouses

 

Sections (a), (b) and (c) above are designed to treat spouses as a single investing unit, so that either spouse qualifies as an accredited investor if the combined financial assets of both spouses exceed $1,000,000, the combined net income of both spouses exceeds $300,000, or the combined net assets of both spouses exceed $5,000,000. Section (d) above does not treat spouses as a single investing unit.

 

If the combined net income of both spouses does not exceed $300,000, but the net income of one of the spouses exceeds $200,000, only the spouse whose net income exceeds $200,000 qualifies as an accredited investor.

 

Financial Assets and Related Liabilities

 

For the purposes of sections (a) and (d) above, "financial assets" means: (1) cash, (2) securities, or (3) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation. These financial assets are generally liquid or relatively easy to liquidate. The value of a subscriber's personal residence is not included in a calculation of financial assets.

 

The calculation of financial assets must exclude "related liabilities", meaning: (1) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or (2) liabilities that are secured by financial assets.

 

As a general matter, it should not be difficult to determine whether financial assets are beneficially owned by an individual, an individual's spouse, or both, in any particular instance. However, in the case where financial assets are held in a trust or in another type of investment vehicle for the benefit of an individual, there may be questions as to whether the individual beneficially owns the financial assets. The following factors are indicative of beneficial ownership of financial assets:

 

●

physical or constructive possession of evidence of ownership of the financial asset;

 

●

entitlement to receipt of any income generated by the financial asset;

 

●

risk of loss of the value of the financial asset; and

 

●

the ability to dispose of the financial asset or otherwise deal with it as the individual sees fit.

 

For example, securities held in a self-directed RRSP for the sole benefit of an individual are beneficially owned by that individual.

 

In general, financial assets in a spousal RRSP can be included for the purposes of the $1,000,000 financial asset test in section (a) above because section (a) takes into account financial assets owned beneficially by a spouse. However, financial assets in a spousal RRSP cannot be included for purposes of the $5,000,000 financial asset test in section (d) above.

 

 

Financial assets held in a group RRSP under which the individual does not have the ability to acquire the financial assets and deal with them directly do not meet the beneficial ownership requirements in either sections (a) or (d) above.

 

Net Assets

 

For the purposes of section (c) above, "net assets" means all of a subscriber's total assets minus all of the subscriber's total liabilities. Accordingly, for the purposes of the net asset test, the calculation of total assets includes the value of a subscriber's personal residence, and the calculation of total liabilities includes the amount of any liability (such as a mortgage) in respect of the subscriber's personal residence.

 

To calculate a subscriber's net assets under the net asset test, subtract the subscriber's total liabilities from the subscriber's total assets. The value attributed to assets should reasonably reflect their estimated fair value. Income tax is considered a liability if the obligation to pay it is outstanding at the time of the distribution of the security to the subscriber by the Issuer.

 

Guidance On Accredited Investor Exemptions for Corporations, Trusts and Other Entities

 

Accredited investors that are corporations, trusts or other entities include:

 

(a)

a corporation, trust or other entity, other than an investment fund, that has net assets (please see the guidance below regarding calculating net assets) of at least $5,000,000 as shown on its most recently prepared financial statements in accordance with applicable generally accepted accounting principles and that has not been created or used solely to purchase or hold securities as an accredited investor;

 

(b)

a corporation, trust or other entity in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors; and

 

(c)

a trust established by an accredited investor for the benefit of the accredited investor's family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor's spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor's spouse or of that accredited investor's former spouse.

 

Net Assets

 

For the purposes of section (a) above, "net assets" means all of the subscriber's total assets minus all of the subscriber's total liabilities. The minimum net asset threshold of $5,000,000 specified in section (a) above must be shown on the entity's most recently prepared financial statements. The financial statements must be prepared in accordance with applicable generally accepted accounting principles.

 

The Subscriber agrees that the above representations and warranties will be true and correct both as of the execution of this Questionnaire and as of the Closing and acknowledges that they will survive the completion of the issue of the Common Shares.

 

The Subscriber acknowledges that the foregoing representations and warranties are made by the Subscriber with the intent that they be relied upon in determining the suitability of the Subscriber to acquire the Common Shares and that this Questionnaire is incorporated into and forms part of the Agreement and the undersigned undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth herein which takes place prior to the closing time of the purchase and sale of any of the Common Shares.

 

 

The Subscriber undertakes to immediately notify the Issuer of any change in any statement or other information relating to the Subscriber set forth in the Agreement or in this Questionnaire which takes place prior to the Closing.

 

By completing this Questionnaire, the Subscriber authorizes the indirect collection of this information by each applicable regulatory authority or regulator and acknowledges that such information is made available to the public under applicable laws.

 

DATED as of _______ day of                                     , 2021.

 

 

	Print Name of Subscriber (or person signing as agent of the Subscriber)

 

 

	By:
		Signature
	Print Name of Subscriber (or person signing as agent of the Subscriber)

 

 

Appendix "A"
TO EXHIBIT A

TO CANADIAN INVESTOR QUESTIONNAIRE
Form 45-106F9

 

WARNING! This investment is risky. Don't invest unless you can afford to lose all the money you pay for this investment.

 

SECTION 1 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER
1. About your investment
Type of securities: Common Shares at a price of US$10.00 per Common Share.	Issuer: McEwen Copper Inc. (the "Issuer")

Purchased from: The Issuer.
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER
2. Risk acknowledgement
This investment is risky. Initial that you understand that:	Your initials
Risk of loss – You could lose your entire investment of $__________. [Instruction: Insert the total dollar amount of the investment.]
Liquidity risk – You may not be able to sell your investment quickly – or at all.
Lack of information – You may receive little or no information about your investment.
Lack of advice – You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to, you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca.
3. Accredited investor status
You must meet at least one of the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement.) The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria.	Your initials
●             Your net income before taxes was more than $200,000 in each of the 2 most recent calendar years, and you expect it to be more than $200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.)
●             Your net income before taxes combined with your spouse's was more than $300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than $300,000 in the current calendar year.
●             Either alone or with your spouse, you own more than $1 million in cash and securities, after subtracting any debt related to the cash and securities.

 

 

 

●             Either alone or with your spouse, you have net assets worth more than $5 million. (Your net assets are your total assets (including real estate) minus your total debt.)
4. Your name and signature
By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form.
First and last name (please print):

 

Signature:	Date:
SECTION 5 TO BE COMPLETED BY THE ISSUER
5. For more information about this investment
McEwen Copper Inc. 150 King Street West, S. 2800 Toronto, ON M5H 1J9   Attention:      Carmen Diges Email:              [email protected]
For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca.
Form instructions:

 

 

1.	This form does not mandate the use of a specific font size or style but the font must be legible
2.	The information in sections 1, 5 and 6 must be completed before the purchaser completes and signs the form.
3.	The purchaser must sign this form. Each of the purchaser and the Issuer or selling security holder must receive a copy of this form signed by the purchaser. The Issuer or selling security holder is required to keep a copy of this form for 8 years after the distribution.

 

 

exhibit "B"
TERM SHEET

 

McEwen Copper Inc.

 

Terms and Conditions of Non-Brokered Private Placement Offering

 

(All amounts shown in United States Currency)

 

Issuer:	McEwen Copper Corp. (the “Company”), a private Alberta company, wholly-owned by McEwen Mining Inc. (MUX: NYSE, TSX).   The Company owns a 100% interest in the development stage Los Azules copper property, located in San Juan Argentina and a 100% interest in the Elder Creek copper exploration property in Nevada.
Offering:	Private placement (the “Offering”) of a minimum of 4,000,000 to and a maximum of 8,000,000 common shares of the Company (the “Shares”), representing up to a 31% equity ownership of the Company post-financing based on a pre-money valuation of USD $175M.  A 1.25% NSR would be issued in favour of McEwen Mining Inc. following the closing of the Offering.
Price:	USD $10.00 per common share (the “Share Price”). USD $250,000 minimum subscription amount.  Lead order of USD $40,000,000 by Rob McEwen, Chief Owner of McEwen Mining Inc. personally.
Size of Offering:	Minimum of USD $40,000,000 to USD $80,000,000.
Use of Proceeds:	The net proceeds of the Offering will be used to: (i) to advance the project towards a pre-feasibility study and improve access to the Los Azules property, (ii) USD $3 million for exploration of the Elder Creek property, and (iii) for general corporate purposes.
Offering  Jurisdictions:	The Offering will take place by way of a non-brokered private placement to qualified investors in all the provinces of Canada, excluding Quebec, to Qualified Institutional Buyers (as such term is defined in the United States Securities Act of 1933) in the United States and otherwise in those jurisdictions where the Offering can lawfully be made without subjecting the Company to registration or continuous disclosure requirements in such jurisdictions. Subscribers must be “accredited investors” (as defined in National Instrument 45-106 - Prospectus Exemptions (“NI 45-106”)).
Hold Period:	The Company is not a reporting issuer in any province or territory of Canada. As such, the Shares will not be transferable under the laws of Canada, except pursuant to applicable statutory exemptions, until the date that is four months and a day after the date the Company becomes a reporting issuer in any province or territory of Canada (subject to any control person distribution restrictions) in accordance with National Instrument 45-102 – Resale of Securities.
Commission:	Finder’s fees of up to 5% cash payable to arm’s length finders.
Conditions to be met on Closing:	The Offering shall be conditional upon each purchaser of Shares entering into a shareholder agreement in a form to be determined.
Closing Date:	Closing may be in one or more tranches as the Company may determine.

 

 

exhibit "C"
STRUCTURE CHART

 

 

 

Exhibit 10.4

 

UNANIMOUS SHAREHOLDER AGREEMENT

 

McEWEN COPPER INC.

 

AUGUST 20, 2021

 

 

TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION		2
1.1	Definitions	2
1.2	Gender and Number	5
1.3	Currency	5
1.4	Headings	6
1.5	Calculation of Time Periods	6
1.6	Conflict	6
1.7	Grant of Power of Attorney	6
1.8	Corporation Bound	6
ARTICLE 2 BUSINESS AND AFFAIRS OF THE CORPORATION		6
2.1	Board of Directors	6
2.2	Appointment of Additional Directors	7
2.3	Board Quorum	7
2.4	Officers	7
2.5	Place, Notice and Telephone Attendance of Board Meetings	7
2.6	Indemnity of Directors and Officers	8
2.7	Books and Records	8
2.8	Fiscal Year	8
2.9	D&O Insurance	9
2.10	Shares of the Corporation	9
2.11	Legend on Share Certificates	9
2.12	Shareholders' Meetings	9
ARTICLE 3 BOARD APPROVALS AND SHAREHOLDER APPROVALS		10
3.1	Matters Requiring Board Approval	10
3.2	Reserved Matters Requiring Super-Majority Shareholders Approval	10
ARTICLE 4 TRANSFER RESTRICTIONS AND TRANSFERS TO PERMITTED TRANSFEREES		11
4.1	General Transfer Restriction	11
4.2	Agreement to Be Bound by Transferee	11
4.3	Permitted Transfers	11
ARTICLE 5 FINANCING AND PRE-EMPTIVE RIGHT		11
5.1	Pre-Emptive Right	11
5.2	New Issuance	12
5.3	Pre-Emptive Right Exclusions	12
ARTICLE 6 RIGHT OF FIRST REFUSAL		13
6.1	Offer To Sell	13
6.2	ROFR Exercise Notice	13
6.3	Failure To Purchase	13
ARTICLE 7 TAG-ALONG RIGHTS		14
7.1	Tag-Along	14

 

 

7.2	Tag-Along Right	14
7.3	Preference of Right of First Refusal	15
ARTICLE 8 DRAG-ALONG RIGHTS		15
8.1	Notice of Proposed Sale and Drag-Along Rights	15
8.2	Obligation to Sell and Terms of Sale	15
ARTICLE 9 PURCHASE OPTION ON A TRIGGERING EVENT		16
9.1	Triggering Events	16
9.2	Trigger Notice	16
9.3	Purchase Option	17
9.4	Suspension of Requirement for Unanimous Approval	17
9.5	Spouse Becoming Shareholder	18
9.6	Purchase Price	18
ARTICLE 10 GENERAL SALE PROVISIONS		18
10.1	Definitions	18
10.2	Deliveries at a Closing	18
10.3	Personal Guarantees	19
10.4	Treatment of Indebtedness	19
10.5	Failure to Complete	19
10.6	Closing Place	19
ARTICLE 11 TOP-UP SHARES		19
ARTICLE 12 CONFIDENTIALITY		20
12.1	Confidentiality	20
ARTICLE 13 GENERAL		20
13.1	Term	20
13.2	Notices	20
13.3	Applicable Law	20
13.4	Severability	20
13.5	Enurement and Assignment	21
13.6	Waiver	21
13.7	Time of Essence	21
13.8	Further Assurances	21
13.9	Independent Legal Advice	21
13.10	Entire Agreement	21
13.11	Counterparts	21

 

Schedule "A" JOINDER

 

Schedule "B" DETERMINATION OF FAIR VALUE

 

Schedule "C" HOLDERS OF COMMON SHARES

 

 

UNANIMOUS SHAREHOLDER AGREEMENT

 

THIS UNANIMOUS SHAREHOLDER AGREEMENT made effective as of August 20, 2021.

 

AMONG:

 

Minera Andes Inc., a corporation existing under the laws of the
Province of Alberta

 

– and –

 

Evanachan Limited, a corporation existing under the laws of the
Province of Ontario

 

– and –

 

Those additional shareholders of the Corporation who become parties hereto by the execution of a joinder agreement in the form of Schedule "A" attached hereto

 

– and –

 

McEwen Copper Inc., a corporation existing under the laws of the
Province of Alberta (the "Corporation")

 

WHEREAS:

 

A.

the Corporation was incorporated under the laws of the Province of British Columbia on March 6, 2006 and continued from the Province of British Columbia to the Province of Alberta on December 31, 2012 as International Copper ULC;

 

B.

the Corporation was converted to a limited liability corporation and changed its name by way of articles of amendment dated August 20, 2021;

 

C.

the authorized share capital of the Corporation consists of an unlimited number of Common Shares and an unlimited number of Class B Common Shares;

 

D.

as at the date hereof, 21,500,000 Common Shares are issued and outstanding to the holders and in the amounts as set out in Schedule "C";

 

E.

the Shareholders wish to establish their rights and obligations in respect of the Shares of the Corporation now or hereafter owned by them, the management and control of the Corporation and certain other matters as set forth herein; and

 

F.

the Shareholders intend that this Agreement shall operate and be construed as a unanimous shareholder agreement under the Act;

 

 

NOW THEREFORE the parties hereto hereby agree as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1

Definitions

 

In this Agreement, including the recitals hereto, unless there is something in the subject matter or content inconsistent therewith, the expressions set out below shall have the following meanings, respectively:

 

"Acceptance Period" has the meaning attributed thereto in subsection 6.1(d);

 

"Act" means the Business Corporations Act (Alberta) and its regulations, as amended;

 

"Acquired Shares" has the meaning attributed thereto in Schedule “A”;

 

"Affiliate" means with respect to any Person, any other Person which directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with such Person;

 

"Agreement", "this Agreement", "hereto", "herein", "hereby", "hereunder", "hereof" and similar expressions refer to this unanimous shareholder agreement and not to any particular article, section, subsection, clause, subdivision or other portion hereof and include any and every amending agreement and agreement supplemental or ancillary hereto;

 

"Articles" means the articles of the Corporation as may be amended or restated from time to time;

 

"Board" means the board of directors of the Corporation;

 

"Business Day" means any day, excluding Saturday, Sunday or any other day which is a legal holiday in Edmonton, Alberta;

 

"By-laws" means the by-laws of the Corporation from time to time in effect;

 

"Common Shares" means the common shares in the capital of the Corporation;

 

"Control" means (i) in respect of a corporation, the ability of a Person or group of Persons acting in concert to influence the manner in which the business of the Corporation is carried on, whether as a result of ownership of sufficient Shares of the Corporation to enable that Person or group of Persons to elect a majority of the Directors of the Corporation or by contract or otherwise, or (ii) with reference to a partnership, trust, syndicate or other entity, will mean actual power or authority to manage and direct the affairs of the entity and if such power or authority is not otherwise determinable will mean ownership of more than 50% of the transferable beneficial interests in such entity, and in each case the term "Controlled" has a corresponding meaning;

 

"Corporate Shareholder" means any Shareholder which is a corporation, partnership, trust, syndicate, or other entity any of the beneficial interests in which are transferable;

 

"Corporation" means McEwen Copper Inc.;

 

"Director" means a member of the Board;

 

 

"Disability" means the mental or physical inability of a person to perform regularly his or her duties for the Corporation for a period of 12 consecutive calendar months, or for any 12 calendar months in any consecutive 18 calendar months;

 

"Drag-Along Notice" has the meaning attributed thereto in Section 8.1;

 

"Drag-Along Right" has the meaning attributed thereto in Section 8.1;

 

"Drag-Along Shares" has the meaning attributed thereto in subsection 8.1(d);

 

"Exercise Notice" has the meaning attributed thereto in subsection 9.3(b);

 

"Exercise Period" has the meaning attributed thereto in subsection 9.3(a);

 

"Fair Value" of Shares means value as determined in accordance with Schedule “B”;

 

"Immediate Family Member" means parents, spouse, siblings, children and stepchildren;

 

"Indemnitee" has the meaning attributed thereto in subsection 2.6(a);

 

"Insurance Proceeds" means the insurance proceeds received on the death of the deceased Shareholder;

 

"Investors Group" means all shareholders of the Corporation set out in Schedule "C" other than Minera Andes Inc.;

 

"Investors Nominees" has the meaning attributed thereto in Section 2.1(a);

 

"Investors Shares" means the Common Shares subscribed by Shareholders other than Minera Andes Inc. on or prior to the date hereof;

 

"Issuance Notice" has the meaning attributed thereto in Section 5.1;

 

"Joinder Agreement" means an agreement enabling new shareholders to agree to this Agreement without the necessity of renegotiating the terms of this Agreement;

 

"Liquidity Event" means:

 

(a)

the Corporation completes an initial public offering that results in the Common Shares or other securities in the capital of the Corporation becoming listed on a stock exchange in Canada or the United States of America; or

 

(b)

the Corporation completes a reverse takeover, statutory merger or amalgamation, arrangement, share exchange, business combination or other similar transaction which results in a class of shares of the issuer resulting from such transaction being listed (the "Resulting Issuer") on a stock exchange in Canada or the United States of America and the shareholders of the Corporation receiving such listed securities of the Resulting Issuer and/or cash in exchange for their Shares;

 

 

"Minority Shareholders" has the meaning attributed thereto in Section 7.1;

 

"New Shareholder" has the meaning attributed thereto in Schedule “A”;

 

"Permitted Transfer" shall have the meaning set forth in Section 4.3;

 

"Permitted Transferee" shall have the meaning set forth in Section 4.3;

 

"Person" means any individual, company or corporation, joint venture, syndicate, partnership, firm, association, trust, sole proprietorship, government or governmental agency, authority or entity howsoever designated or constituted;

 

"Pre-Emptive Right" shall have the meaning attributed thereto in Section 5.1;

 

"Pre-Emptive Right Exercise Notice" shall have the meaning attributed thereto in Section 5.1;

 

"Principal" means, where a Shareholder is a Person other than an individual, the individual who holds directly or indirectly greater than 50% of the voting securities of such Shareholder or who holds, or exercises control or direction over, a sufficient number of the voting securities of a Shareholder to materially affect the control of that Shareholder;

 

"Purchasers" has the meaning attributed thereto in Section 9.3(b);

 

"Purchase Option" has the meaning attributed thereto in Section 9.3;

 

"Related Persons" mean Persons that are deemed not to deal with each other at arm's length, including (i) in relation to Directors and officers of the Corporation, individuals connected by blood relationship, adoption, marriage or common law partnership, and (ii) Shareholders of the Corporation;

 

"Right of First Refusal" has the meaning attributed thereto in Section 6.2;

 

"ROFR Exercise Notice" has the meaning attributed thereto in Section 6.2;

 

"ROFR Notice" has the meaning attributed thereto in Section 6.1;

 

"ROFR Shareholder" has the meaning attributed thereto in Section 6.1;

 

"ROFR Shares" has the meaning attributed thereto in Section 6.1;

 

"Selling Group" has the meaning attributed thereto in Section 8.1;

 

"Selling Shareholder" has the meaning attributed thereto in Section 6.1;

 

"Shareholders" means the holders of Common Shares from time to time;

 

"Shareholder Borrowing" means outstanding indebtedness which is owed by a Shareholder to the Corporation;

 

"Shareholder Debt" means outstanding indebtedness which is owed by the Corporation to a Shareholder;

 

"Shares" means the Common Shares and includes, for certainty, the Investors Shares;

 

 

"Share Price" has the meaning attributed thereto in Section 6.1(c);

 

"Super-Majority Selling Shareholders" has the meaning attributed thereto in Section 7.1;

 

"Super-Majority Resolution" means a resolution passed by not less than 70% percent of the votes cast by the Shareholders who voted in respect of that resolution or signed by all the Shareholders entitled to vote on that resolution;

 

"Super-Majority Shareholders" means, at any date, the holders of more than 70% percent of the issued and outstanding Common Shares on such date;

 

"Tag-Along Offer" has the meaning attributed thereto in subsection 7.2(a);

 

"Tag-Along Right" has the meaning attributed thereto in Section 7.1;

 

"Tag-Along Right Exercise Notice" has the meaning attributed thereto in Section 7.1;

 

"Third Party" has the meaning attributed thereto in Section 6.1;

 

"Top-Up Share" has the meaning attributed thereto in Article 11;

 

"Transfer" includes any sale, exchange, assignment, gift, bequest, disposition, mortgage, charge, pledge, encumbrance, grant of security interest or other arrangement by which, directly or indirectly, possession, legal title or beneficial ownership passes from one Person to another, or to the same Person in a different capacity, whether or not voluntary or by operation of law and whether or not for value, and any agreement to effect any of the foregoing; and the words "Transferred", "Transferring", "Transferee", "Transferor" and similar words have corresponding meanings;

 

"Transfer Notice" has the meaning attributed thereto in Section 7.1;

 

"Transferor" has the meaning attributed thereto in Section 4.3;

 

"Treasury Securities" has the meaning attributed thereto in subsection 5.1(b);

 

"Trigger Notice" has the meaning attributed thereto in Section 9.2;

 

"Triggered Shares" has the meaning attributed thereto in Section 9.3;

 

"Triggering Events" has the meaning attributed thereto in Section 9.1; and

 

"Vendor" has the meaning attributed thereto in Section 9.3(b).

 

1.2

Gender and Number

 

Words importing the singular number only shall include the plural, and vice-versa, words importing gender shall include all genders.

 

1.3

Currency

 

All payments contemplated and all dollar amounts referred to in this Agreement shall be in Canadian funds.

 

 

1.4

Headings

 

The division of this Agreement into articles and sections and headings thereof are for convenience of reference only and shall not affect the interpretation or construction of this Agreement. Unless something in the subject matter or context is inconsistent therewith, references herein or in the schedules to articles, sections and schedules are to articles, sections and schedules of and to this Agreement.

 

1.5

Calculation of Time Periods

 

Unless otherwise specified herein when calculating the period of time within which or following which any act is to be done or step taken pursuant to this Agreement, the date which is the reference day in calculating such period shall be excluded and the day upon which such act is to be done or step taken shall be included. If the last day of such period is not a Business Day, the period in question shall end on the next Business Day.

 

1.6

Conflict

 

In the event of any conflict between the provisions of this Agreement and the Articles or the By-laws or both, the provisions of this Agreement shall govern. Each of the Shareholders agrees to vote or cause to be voted the Shares owned by it so as to cause the Articles or the By-laws or both to be amended to resolve any such conflict in favour of the provisions of this Agreement.

 

1.7

Grant of Power of Attorney

 

Upon the failure of any Shareholder to vote any Shares owned by such Shareholder in accordance with the terms of this Agreement, such Shareholder hereby appoints and constitutes the Secretary of the Corporation as attorney in respect of all Shares owned by such Shareholder (which power of attorney is coupled with an interest and will be irrevocable until either this Agreement terminates pursuant to its terms or this section is amended to remove such grant of power of attorney), with full power and authority to execute such agreements, consents, transfers and other documents in respect of such Shares and to vote all such Shares in the manner provided in this Agreement.

 

1.8

Corporation Bound

 

The Corporation confirms its knowledge of this Agreement and undertakes to carry out in good faith and be bound by the provisions of this Agreement to the full extent that it has the capacity and power at law to do so.

 

ARTICLE 2

BUSINESS AND AFFAIRS OF THE CORPORATION

 

2.1

Board of Directors

 

(a)

The Investors Group will be entitled to nominate one-third of the Directors provided the Investors Group collectively owns not less than 25% of the outstanding Shares (the "Investors Nominees"). The initial Investors Nominee shall be Robert R. McEwen.

 

(b)

The number of Directors shall initially be two, consisting of Anna Ladd-Kruger and Robert R. McEwen.

 

 

(c)

The Investors Group will be entitled, with the written approval of Investors Group members holding a majority of the votes attached to all Shares held by the Investors Group, to remove any or all of the Investors Nominees at any time.

 

(d)

If an Investors Nominee ceases to be a Director for any reason, the vacancy will be filled by a nominee approved by a majority of the votes attached to the Shares held by the Investors Group.

 

(e)

The Board shall have the ability by ordinary resolution to grant any Shareholder such observer rights with respect to any meeting of the Board as the Board may determine, in their full discretion.

 

2.2

Appointment of Additional Directors

 

The Board, acting unanimously, may, between annual meetings of Shareholders, appoint one or more additional Directors to serve until the next annual meeting of Shareholders, on the condition that the number of additional Directors shall not at any time exceed one-third of the number of Directors who held office at the expiration of the last annual meeting of Shareholders.

 

2.3

Board Quorum

 

The Board shall have no power to transact business at any meeting of the Board unless a quorum is present. A quorum for a meeting of the Board shall be a majority of the Directors.

 

2.4

Officers

 

The Corporation shall have a President, Secretary and such other officers as the Board determines.

 

2.5

Place, Notice and Telephone Attendance of Board Meetings

 

(a)

Meetings of the Board will be held in or at such place as the Directors by majority agree failing which agreement, meetings will be held at the registered office of the Corporation.

 

(b)

Regular meetings of the Board, to be held at least yearly, will be called by any Director on not less than five Business Days' notice to the Directors or such a shorter period of time as consented to by all of the Directors. Any Director may call additional meetings upon five Business Days' notice to the other Directors.

 

(c)

Notwithstanding the foregoing, emergency meetings of the Board in connection with matters of an urgent nature (where the need for a meeting of the Board could not have been reasonably foreseen) may be called on not less than 24 hours' notice.

 

(d)

The notice will contain a statement as to the business proposed to be transacted at such meeting provided that the Directors are entitled to transact any business brought before the meeting whether or not set out in the notice.

 

(e)

Directors may participate in meetings by telephone or other communications facilities. The Corporation shall ensure that the telephone or other communications facilities available permit all individuals participating the meeting to communicate with each other simultaneously and instantaneously.

 

 

(f)

If all of the Directors are present at a meeting of the Board, whether the matters to be transacted at that meeting are urgent or not, notice of that meeting of the Board is deemed to be waived unless, at the beginning of that meeting, any Director objects to the holding of that meeting of the Board without the required notice.

 

2.6

Indemnity of Directors and Officers

 

(a)

The Corporation will, whenever required or permitted by the Act or otherwise by law, indemnify each Director, each officer of the Corporation, each former Director, each former officer of the Corporation and each individual who acts or acted at the Corporation's request as a Director or officer of a body corporate of which the Corporation is or was a shareholder or creditor, and his heirs and legal representatives (each an "Indemnitee") against all costs, charges and expenses, including, without limitation, each amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been a Director or officer of the Corporation or such body corporate if:

 

(i)

the Indemnitee acted honestly and in good faith with a view to the best interests of the Corporation or such body corporate; and

 

(ii)

in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnitee had reasonable grounds for believing that his conduct was lawful.

 

(b)

The Corporation will advance funds to an Indemnitee for the costs, charges and expenses referred to in Section 2.6(a) above. Any Indemnitee receiving advancement of funds under this Section 2.6(b) will repay such funds if the Indemnitee does not fulfill the conditions of Section 2.6(a).

 

(c)

The Indemnitee must be judged by a court of competent jurisdiction to have committed a fault or omitted to do something that the Indemnitee ought to have done before any determination may be made that the Indemnitee is not entitled to indemnification. Indemnitees are presumed to have acted honestly and in good faith, and in the absence of a judgment of a court to the contrary, are presumed to be entitled to indemnification.

 

(d)

The indemnification obligations of the Corporation pursuant to this Section 2.6 and the terms and conditions, including coverage amounts, of any insurance policy established pursuant to Section 2.9, shall not in any way be diminished without the approval of the Board.

 

2.7

Books and Records

 

The Corporation shall at all times maintain complete and accurate books and records relating to its business and affairs.

 

2.8

Fiscal Year

 

Until changed by a resolution of the Board, the fiscal year of the Corporation will end on the last day of December in each year.

 

 

2.9

D&O Insurance

 

The Corporation shall obtain and maintain, at reasonable cost to the Corporation, Directors and officers liability insurance covering all Directors and officers of the Corporation with a nationally recognized insurer in such amounts as may be determined by the Board. The Corporation will make copies of the policy available to any Director upon request.

 

2.10

Shares of the Corporation

 

The provisions of this Agreement relating to the Shares shall apply to any shares or securities into which such Shares may be converted, changed, reclassified, re-divided, re-designated, redeemed, subdivided or consolidated, to any shares or securities that are received by the Shareholders hereto as a dividend or distribution payable in shares or securities of the Corporation and to any shares or securities of the Corporation or of any successor of a continuing entity of the Corporation that may be received by the Shareholders hereto on a reorganization, arrangement, amalgamation, consolidation or merger, statutory or otherwise.

 

2.11

Legend on Share Certificates

 

Any and all certificates representing Shares now or hereafter beneficially owned by the Shareholders during the term of this Agreement Share shall bear a legend referring to this Agreement and that transfers of Shares are accordingly restricted.

 

2.12

Shareholders' Meetings

 

(a)

The Shareholders shall have one meeting each fiscal year at such place in or outside the Province of Alberta as the Directors determine or, in the absence of such a determination, at the place where the registered office of the Corporation is located.

 

(b)

A meeting of the Shareholders of the Corporation may be held by telephonic or electronic means (as defined in the Act) and a Shareholder who, through those means, votes at the meeting or establishes a communications link to the meeting shall be deemed, for purposes of the Act and this Agreement, to be present at the meeting.

 

(c)

The Directors may at any time call a special meeting of Shareholders.

 

(d)

The holders of not less than 5% of the issued shares of the Corporation that carry the right to vote at a meeting sought to be held may requisition the Directors to call a meeting of Shareholders for the purposes stated in the requisition. The requisition shall state the business to be transacted at the meeting and shall be sent to the registered office of the Corporation. Subject to subsection 142(3) of the Act, upon receipt of the requisition the Directors shall call a meeting of Shareholders to transact the business stated in the requisition (but if the Directors are obligated to call a meeting and do not do so within 21 days after receiving the requisition call a meeting, any Shareholder who signed the requisition may call the meeting).

 

 

ARTICLE 3

BOARD APPROVALS AND SHAREHOLDER APPROVALS

 

3.1

Matters Requiring Board Approval

 

Unless otherwise allowed or required by this Agreement, the following matters shall require the approval of the Board:

 

(a)

entering into any commercial contracts which are not in the normal course of the business;

 

(b)

declaring or paying dividends in respect of the Shares or making any other distributions of assets of the Corporation;

 

(c)

hiring or terminating officers of the Corporation;

 

(d)

changing the fiscal year of the Corporation;

 

(e)

changing the number of Directors of the Corporation;

 

(f)

formulation of remuneration policy, bonus policy and long term incentives for employees, and implementation of remuneration policy approved by the Shareholders;

 

(g)

establishing, amending or terminating any stock option, stock purchase, stock bonus plan, share appreciation rights scheme or any similar equity incentive plan or program for any of the Corporation's Directors, officers, employees or consultants, provided that if voting stock is used, the voting stock shall not constitute more than 10% of the issued and outstanding voting stock in the Corporation;

 

(h)

the approval of annual budgets for general, administrative and operating expenses of the Corporation; or

 

(i)

the approval of the transfer of any Shares other than Permitted Transfers in this Agreement.

 

3.2

Reserved Matters Requiring Super-Majority Shareholders Approval

 

Unless otherwise allowed or required by this Agreement, the following matters shall require the approval of the Super-Majority Shareholders:

 

(a)

granting of a security interest in or otherwise encumbering the Corporation's assets to secure obligations other than in the ordinary course of business;

 

(b)

providing a guarantee on behalf of the Corporation to secure the performance of any obligation of any other person that is not an Affiliate;

 

(c)

fundamentally changing the Corporation's business;

 

(d)

sale or disposition of all or substantially all of the Corporation's assets;

 

(e)

amalgamation or merging with or into any other corporation;

 

 

(f)

taking or instituting any proceedings for the winding-up, reorganization or dissolution of the Corporation or making any material assignment for the benefit of any creditors of the Corporation;

 

(g)

creating or amending rights associated with any class of Shares; or

 

(h)

entering into any transactions with Related Persons.

 

ARTICLE 4

TRANSFER RESTRICTIONS AND TRANSFERS TO PERMITTED TRANSFEREES

 

4.1

General Transfer Restriction

 

Except as otherwise expressly provided in this Agreement or with the written consent of all the Shareholders, no Shares shall at any time be Transferred by a Shareholder. A purported Transfer of any Shares in violation of this Agreement will not be valid and the Corporation will neither register, nor permit any transfer agent to register on the securities register of the Corporation, any such Shares purportedly Transferred in violation of this Agreement.

 

4.2

Agreement to Be Bound by Transferee

 

No Transfer of Shares to any Person shall be made until after such Person agrees to be bound by the terms of this Agreement by duly executing a joinder agreement in the form of Schedule "A" attached hereto. A Person so agreeing shall be deemed to be a party to this Agreement and one of the Shareholders hereto.

 

4.3

Permitted Transfers

 

Any Shareholder shall be permitted to Transfer all or any part of the Shares owned by such Shareholder (the "Transferor") to an Affiliate or Immediate Family Member of such Shareholder, or, in the case of a Corporate Shareholder, to Persons who Control a Corporate Shareholder, or Immediate Family Members or Affiliates of such Persons (in each case a "Permitted Transferee" and each such Transfer, a "Permitted Transfer"). As a condition precedent to being registered as a holder of Shares, the Permitted Transferee shall execute and deliver to the Corporation a written acknowledgment in the form satisfactory to the Corporation that such transfer is in accordance with and subject to the terms of this Agreement. Except as expressly otherwise agreed by the Shareholders, the Permitted Transferee shall assume all liabilities, obligations and commitments due and outstanding under this Agreement on the effective date of the Transfer. The Transferor will remain jointly and severally liable with the Permitted Transferee for the performance of the Permitted Transferee's obligations under this Agreement.

 

ARTICLE 5

FINANCING AND PRE-EMPTIVE RIGHT

 

5.1

Pre-Emptive Right

 

In the event the Corporation wishes at any time hereafter to issue any additional Shares from treasury, or grant or issue any securities convertible into Shares (other than incentive options to employees granted under an approved stock option plan of the Corporation), it shall first offer such additional Shares or convertible securities for purchase to Shareholders by written notice (an "Issuance Notice") given to each Shareholder. The Issuance Notice shall be delivered within ten days of all consents and approvals to issue Shares or grant or issue any securities convertible into Shares having been received by the Corporation and shall contain the following:

 

(a)

a statement that the Issuance Notice is given pursuant to the provisions of this Section 5.1;

 

 

(b)

a description of the Shares or convertible securities to be issued (the "Treasury Securities"), the name and address of the party or parties to whom the Treasury Securities are to be issued, and the issue price and other terms and conditions under which the Shares or convertible securities are to be issued; and

 

(c)

an offer for the recipient of the Issuance Notice to purchase from the Corporation the Treasury Securities at the price and on the terms described in the Issuance Notice pursuant to (b) above.

 

Upon receipt of such Issuance Notice, each Shareholder shall have the right, but not the obligation, (the "Pre-Emptive Right") to purchase all or a portion of the Treasury Securities on the terms described in the Issuance Notice. Such Pre-Emptive Right is exercisable by each Shareholder by giving written notice of acceptance (the "Pre-Emptive Right Exercise Notice") to the Corporation within ten days after receipt of the Issuance Notice from the Corporation, specifying the number of Treasury Securities such Shareholder wishes to acquire pursuant thereto, up to that percentage of the Treasury Securities which corresponds to the percentage of the issued and outstanding Common Shares beneficially owned by the Shareholders as at such time (calculated on a non-diluted basis). If more than one Shareholder gives a Pre-Emptive Right Exercise Notice to the Corporation, then the Treasury Securities shall be allocated among them pro rata to their beneficial ownership of Shares.

 

5.2

New Issuance

 

Upon the issuance of Shares to any Person or Persons if the subscriber is not then a Shareholder who is a party to this Agreement, such Person or Persons shall agree to be bound by the terms and conditions of this Agreement by duly executing a joinder agreement in the form of Schedule “A”. The Corporation shall require that the subscriber become a party to this Agreement in accordance with the foregoing as a condition of the issuance of any Shares to any Person or Persons.

 

5.3

Pre-Emptive Right Exclusions

 

The Corporation shall not be obligated to make an offer under or to otherwise comply with Section 5.1 and the Pre-Emptive Right shall not apply to, any Shares or convertible securities that are issued by the Corporation pursuant to:

 

(a)

any transaction which is primarily a borrowing transaction with a financial institution in connection with which the lender is granted the right to acquire options, warrants, shares or other securities of the Corporation;

 

(b)

the issuance of options, warrants, performance shares or other incentive equity securities or the issuance of any Shares in connection with the exercise of any options, warrants or other incentive equity securities granted by the Corporation pursuant to any security-based incentive plan or other arrangement, which is approved by the Board in accordance with the terms and conditions hereof; or

 

(c)

the issuance of Shares by the Corporation in a share or asset purchase or other similar transaction where Shares or convertible securities of the Corporation are used to fund all or a portion of the applicable purchase price.

 

 

ARTICLE 6

RIGHT OF FIRST REFUSAL

 

6.1

Offer To Sell

 

For the purposes of this Article, "Pro Rata Share" means the quotient of X/Y, where X is equal to the number of Shares owned by a Shareholder, and Y is equal to the total issued and outstanding Shares of the Corporation. If a Shareholder (the "Selling Shareholder") wishes to sell all, but not less than all, of its Shares to a third party (the "Third Party"), then after receiving a bona fide written offer from the Third Party for the purchase of all of its Shares, but before any definitive agreement is made, the Selling Shareholder shall give notice (the "ROFR Notice") to the other Shareholders (collectively "ROFR Shareholders" and individually a "ROFR Shareholder") and to the Corporation of its desire to sell all of its Shares. The ROFR Notice shall set out:

 

(a)

a statement that the ROFR Notice is given pursuant to the provisions of this Article 6;

 

(b)

the total number of Shares that the Selling Shareholder beneficially owns (the "ROFR Shares");

 

(c)

the price per Share (the "Share Price") the Third Party has offered and at which Selling Shareholder is prepared to sell the ROFR Shares; and

 

(d)

an offer by the Selling Shareholder to sell all of the ROFR Shares to ROFR Shareholders in proportion to their Pro Rata Share at the Share Price, which offer shall be open for acceptance for a period of 10 days from the date of the offer (the "Acceptance Period").

 

6.2

ROFR Exercise Notice

 

Following receipt of the ROFR Notice, the ROFR Shareholder shall have the right but not the obligation (the "Right of First Refusal") during the Acceptance Period, to elect to purchase the ROFR Shares in proportion to their Pro Rata Share upon the terms contained in the ROFR Notice by giving a written notice (the "ROFR Exercise Notice") to the Selling Shareholder stating that it accepts the offer of the Selling Shareholder contained in the ROFR Notice. Any ROFR Shareholder who wishes to purchase a different number of Shares than its Pro Rata Share shall in its ROFR Exercise Notice state the number of Shares it requests to purchase. If a ROFR Shareholder requests to purchase less than its Pro Rata Share, the ROFR Shareholders who requested to purchase more than their Pro Rata Share will be entitled to purchase the unsubscribed Shares in proportion to their then Pro Rata Share, or in such other proportions as they agree, by giving ROFR Exercise Notice to the Selling Shareholder within 2 days of the expiry of the Acceptance Period. If, within the Acceptance Period, all of the ROFR Shares have been accepted for purchase by ROFR Shareholders pursuant to this Section, the Selling Shareholder shall sell the ROFR Shares to ROFR Shareholders and such transaction of purchase and sale shall be completed within 5 days of the date upon which the last ROFR Exercise Notice may have been given. The purchase price shall be paid in cash or certified cheque on the closing date.

 

6.3

Failure To Purchase

 

If the Selling Shareholder does not receive any ROFR Exercise Notice within the Acceptance Period specified in Section 6.2, then the ROFR Shareholders shall be deemed to have refused to purchase the ROFR Shares referred to in the ROFR Notice. The Selling Shareholder may then sell all, but not less than all, of the ROFR Shares to the Third Party, provided the sale is on the exact same terms and conditions as contained in the ROFR Offer and provided the purchase and sale is completed within the following 60 day period from the expiry of the Acceptance Period. If the ROFR Shares are not sold within such 60 day period and if the Selling Shareholder thereafter still desires to sell the ROFR Shares it shall again give ROFR Notice pursuant to this Section 6.3. Any Third Party proposing to acquire ROFR Shares as permitted by this Section 6.3 shall, as a condition of the completion of the purchase and sale, agree to be bound by the provisions of this Agreement by duly executing a joinder agreement in the form of Schedule "A" attached hereto.

 

 

ARTICLE 7

TAG-ALONG RIGHTS

 

7.1

Tag-Along

 

If any one or more Shareholders holding in aggregate greater than 70% of the outstanding Shares having a right to vote (the "Super-Majority Selling Shareholders") desire to sell Shares in aggregate representing greater than 70% of the outstanding Shares to a third party transferee, such Super-Majority Selling Shareholders shall give a written notice (the "Transfer Notice") pursuant to Section 7.2 to the other Shareholders (the "Minority Shareholders") (with a copy to the Corporation) of their intention to sell such Shares. The Transfer Notice shall contain the number of Shares which the Super-Majority Selling Shareholders propose to sell to the third party transferee, the identity of the third party transferee, the proposed effective date and closing date of such sale and the price and other terms and conditions of such sale. Each Minority Shareholder shall have the right, but not the obligation, during the 10 day period following the receipt of the Transfer Notice, to deliver a written confirmation (the "Tag Along Right Exercise Notice") to the Super-Majority Selling Shareholders as to whether or not such Minority Shareholder wishes to exercise its tag along rights (the "Tag Along Right"). Any such Minority Shareholder who fails to deliver such Tag-Along Right Exercise Notice within the 10 day period shall be deemed to have elected not to exercise its Tag-Along Right.

 

7.2

Tag-Along Right

 

(a)

If any of the Minority Shareholders exercises its Tag-Along Right by delivering a Tag- Along Right Exercise Notice pursuant to Section 7.1, such Minority Shareholder shall execute all necessary documents to give effect to such a sale to the third party and the Super-Majority Selling Shareholders shall use their best efforts to obtain from the third party transferee a bona fide offer addressed to such Minority Shareholders who have exercised their Tag Along Right containing identical terms and conditions of the sale as received by such Super-Majority Selling Shareholders (a "Tag Along Offer").

 

(b)

If none of the Minority Shareholders elect to exercise their Tag-Along Right, the Super- Majority Selling Shareholders may at any time within a period of 45 days following the expiry of the 10 day period referred to in Section 7.1 sell all of the Shares of the Super- Majority Selling Shareholders to the third party transferee, on the condition that such Shares are to be transferred under a bona fide sale.

 

(c)

If one or more Minority Shareholders accept the Tag-Along Offer and exercise their respective Tag-Along Right, the purchase and the sale of the Shares to the third party transferee pursuant to the Tag-Along Offer will be completed in accordance with the provisions of the Tag-Along Offer and at the same time as the purchase and sale of the Shares by the Super-Majority Selling Shareholders to the third party transferee and as part of the same closing.

 

 

(d)

In the event that the third party transferee desires to purchase a number of Shares which is less than the total number of Shares desired to be sold by the Super-Majority Selling Shareholders together with those Shares in respect of which Minority Shareholders have exercised a Tag-Along Right, the number of Shares to be sold by the Super-Majority Selling Shareholders and the Minority Shareholders shall be reduced on a pro rata basis among all such Shareholders.

 

7.3

Preference of Right of First Refusal

 

It is understood and agreed that any Tag-Along Rights a Shareholder may have pursuant to this Article 7 shall not apply to the purchase of Shares by a Shareholder if a ROFR Exercise Notice is given pursuant to Section 6.2.

 

ARTICLE 8

DRAG-ALONG RIGHTS

 

8.1

Notice of Proposed Sale and Drag-Along Rights

 

If any one or more Shareholders (herein referred to as the "Selling Group") desire to sell any Shares in the Corporation pursuant to a bona fide offer to purchase such Shares from any person dealing at arm's length with the Selling Group and such Shares constitute greater than 70% of the then outstanding Shares of the Corporation having a right to vote, then the Selling Group shall have the right (the "Drag-Along Right") to require all other Shareholders to sell all of their respective Shares to the same third party purchaser on the same terms and conditions offered to the Selling Group, as set forth in the Drag-Along Notice. The Selling Group shall exercise its Drag-Along Right by enclosing with the Drag-Along Notice delivered to the other Shareholders pursuant to this Section 8.1 with respect to such proposed sale a written notice (a "Drag-Along Notice") which shall contain the following:

 

(a)

a statement that the Drag-Along Notice is delivered pursuant to Article 8;

 

(b)

the identity of the third party purchaser;

 

(c)

the price and other terms and conditions of such sale;

 

(d)

an offer by the third party purchaser to purchase all but not less than all of the Shares owned by such other Shareholders (the "Drag-Along Shares") on the same terms and conditions offered to the Selling Group; and

 

(e)

specify the proposed closing date for the sale of the Drag-Along Shares, which shall be not less than 10 Business Days before the closing of the sale of the Drag-Along Shares.

 

8.2

Obligation to Sell and Terms of Sale

 

Upon receipt of the Drag-Along Notice each Shareholder shall take all necessary action to dispose of all of the Drag-Along Shares then held by such Shareholders to such third party purchaser on the terms and conditions as described in the Drag-Along Notice. Each Shareholder shall give customary representations and warranties relating to ownership, title and ability to convey its Drag-Along Shares. No such Shareholder shall be directly liable in respect of any indemnification in connection with such sale of Drag- Along Shares in excess of the consideration received by such Shareholder therefrom or for the breach of representations or warranties made by any other Shareholder.

 

 

ARTICLE 9

PURCHASE OPTION ON A TRIGGERING EVENT

 

9.1

Triggering Events

 

For the purposes of this Article 9 "Triggering Events" shall mean where the following occurs in relation to a Principal or a Shareholder, as applicable; provided that a Triggering Event in respect of a Principal who Controls a Shareholder shall be deemed to be a Triggering Event of the Shareholder:

 

(a)

death or Disability;

 

(b)

proceedings or actions are commenced by which the Shareholder may be judged bankrupt or insolvent, or may be liquidated, dissolved, wound-up, or reorganized, or granted relief or protection under any law relating to bankruptcy, insolvency, reorganization or relief of debtors (including under the Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada) or other similar laws applicable to the Shareholder;

 

(c)

an application or proceeding is brought by the spouse or former spouse of a Shareholder under the Family Law Act (Alberta) or similar legislation to determine the entitlement of the spouse or former spouse to the net family property of that Shareholder and the Shareholder has not produced evidence satisfactory to all the other Shareholders, acting reasonably, within 30 days of the date on which the application or proceeding is commenced (the "Settlement Period"), that the financial claims of such spouse or former spouse to such entitlement can be settled without in any way, directly or indirectly, negatively affecting, encumbering or interfering (including by making public confidential information) the Corporation, its business or the holding of Shares by the Shareholder;

 

(d)

if a custodian, receiver, receiver-manager, or trustee is appointed for a Shareholder or for a substantial portion of their business or assets or a secured creditor takes possession of any of their Shares or execution is levied against Shares; or

 

(e)

a material breach by a Shareholder of any provision of this Agreement that is not cured within a period of 30 days following notice of breach from another Shareholder.

 

The Shareholder with respect to which the Triggering Event has occurred will be a "Triggered Shareholder" for the purposes of this Article 9. A Triggered Shareholder may not transfer its Shares to a Permitted Transferee unless the Purchase Option described below has expired.

 

9.2

Trigger Notice

 

Each Triggered Shareholder or its estate trustee, administrator, or other legal or personal representative, as the case may be, shall give notice in writing to the Corporation and the other Shareholders (the "Trigger Notice") promptly following the occurrence of a Triggering Event. In the case of Section 9.1(b) above, the Trigger Notice shall be given by the remaining Shareholders following what they determine in good faith to be the Triggering Event.

 

 

9.3

Purchase Option

 

Each Shareholder hereby grants to the other Shareholders (or, if they so designate, the Corporation) an irrevocable option (the "Purchase Option"), exercisable if it becomes a Triggered Shareholder, to purchase all the Shares held by it (the "Triggered Shares") in accordance with the following procedure:

 

(a)

the Purchase Option will be exercisable by the other Shareholders at any time within 20 Business Days following receipt of the Trigger Notice (the "Exercise Period");

 

(b)

other Shareholders or the Corporation, as the case may be (in each case, the "Purchaser") may exercise the Purchase Option by sending a notice in writing (the "Exercise Notice") to the Triggered Shareholder or its estate trustee, administrator, or other legal or personal representative (in each case, the "Vendor");

 

(c)

if there is more than one other Shareholder exercising the Purchase Option, they each may purchase their proportion of the Triggered Shares (based on their relative shareholdings) and a Purchaser may purchase more than its proportion of the Triggered Shares if any of the other Purchasers do not desire to purchase their full proportion, or any, of the Triggered Shares;

 

(d)

if no Exercise Notice is provided to the Triggered Shareholder within the Exercise Period, the Purchase Option expires. Thereafter,

 

(i)

the Triggered Shareholder remains subject to this Agreement;

 

(ii)

if another Triggering Event occurs, another Purchase Option shall be provided to the other Shareholders as provided above; and

 

(iii)

if any Triggered Shareholder has outstanding any Shareholder Debt at the time a Trigger Notice is delivered, the Purchase Option will include an obligation to purchase that Shareholder Debt for cash, and any purchase for cancellation by the Corporation of Triggered Shares must be accompanied by a repayment of any Shareholder Debt outstanding to the Triggered Shareholder.

 

9.4

Suspension of Requirement for Unanimous Approval

 

Notwithstanding anything in this Agreement, effective the occurrence of a Triggering Event, the Triggered Shareholder and any person who Controls that Shareholder (and, in the case of death, the heirs, trustees, executors, administrators and other legal representatives of the deceased Shareholder) are no longer/not entitled:

 

(a)

to a seat on the Board and, in the case of a living Triggered Shareholder, shall be deemed to have resigned from the Board and any office with the Corporation); or

 

(b)

to have his or her consent obtained before any actions are taken that would otherwise require unanimous approval under this Agreement,

 

and the Triggered Shareholder hereby agrees and shall vote for, approve, and act consistently with any decisions made by the remaining Shareholders.

 

 

9.5

Spouse Becoming Shareholder

 

If the spouse of a Triggered Shareholder or a person who Controls a Triggered Shareholder becomes a Shareholder pursuant to this Article 9, each of the other Shareholders shall be, and are hereby irrevocably appointed in those circumstances, proxies to make all decisions and exercise all voting and other rights attached to the Triggered Shares, including in respect of the disposition of the Triggered Shares in connection with a sale of Control of the Corporation, held by that spouse and/or the spouse's Permitted Transferee.

 

9.6

Purchase Price

 

The purchase price for any Triggered Shares that are sold under this Article 9 will be the Fair Value of those Shares. The determination of Fair Value is set out in Schedule “B”.

 

ARTICLE 10

GENERAL SALE PROVISIONS

 

10.1

Definitions

 

For the purpose of this Article, the terms:

 

(a)

"Date of Closing" shall mean the date set for closing in accordance with this Agreement;

 

(b)

"Purchaser" shall mean the Shareholder who is purchasing Shares pursuant to this Agreement;

 

(c)

"Time of Closing" shall mean 12:00 p.m. (Toronto time) on the Date of Closing; and

 

(d)

"Vendor" shall mean the Shareholder who is selling Shares pursuant to this Agreement.

 

10.2

Deliveries at a Closing

 

At the Time of Closing, the Vendor shall:

 

(a)

deliver to the Corporation a signed resignation of the Vendor or the person who Controls the Vendor, as Director, officer and employee of the Corporation, as the case may be;

 

(b)

assign and transfer to the Purchaser the Shares being purchased and shall deliver the required share certificate(s) duly endorsed for transfer into the Purchaser’s name, free and clear of any claims, liens and encumbrances;

 

(c)

provide the Purchaser with (i) evidence reasonably satisfactory to the Purchaser that the Vendor is not a "non-resident" of Canada within the meaning of the Income Tax Act (Canada), or (ii) a certificate from Revenue Canada under section 116 of such Act certifying that all taxes payable in connection with the transaction have been paid or that no taxes are payable in respect of the transaction; provided that if no declaration or certificate is delivered by the Vendor, the Purchaser will be entitled to deduct from the purchase price payable to the Vendor an amount equal to the amount of tax for which the Purchaser may be liable (as determined solely by the Purchaser) under the Income Tax Act (Canada).

 

 

10.3

Personal Guarantees

 

If, at the Time of Closing, the Vendor and/or the person who Controls the Vendor has guaranteed to anyone any debts, liabilities or other obligations of the Corporation, the Corporation and the remaining Shareholders shall take all steps to ensure that all personal guarantees made in connection with the Corporation be cancelled or cause to be cancelled at the Time of Closing. If that is not possible, the Purchaser shall provide the Vendor and/or the person who Controls the Vendor a complete indemnity against any and all costs which the Vendor and/or the person who Controls the Vendor may incur with respect to that guarantee (including, without limitation, fees for professional advisors, such as legal fees incurred in connection with the exercise of the indemnity).

 

10.4

Treatment of Indebtedness

 

On the closing of any purchase and sale of Shares provided for in this Agreement, unless otherwise specified or contemplated in this Agreement:

 

(a)

the amount of any Shareholder Debt shall be added to the purchase price and payable in cash by the Purchaser to the Vendor on closing provided however that the Vendor shall deliver to the Purchaser on closing an assignment of that Shareholder Debt;

 

(b)

the Purchaser shall pay, and the Vendor hereby directs the Purchaser to pay, that portion of the purchase price to the Corporation as is necessary to repay the Vendor’s Shareholder Borrowing, with the balance, if any, paid to the Vendor. If the Shareholder Borrowing exceeds the purchase price, the Vendor shall pay the balance of the Shareholder Borrowing to the Corporation on closing; and

 

(c)

if there is more than one Purchaser, each Purchaser shall pay on closing its pro rata portion of any payment to be made by the Purchasers.

 

10.5

Failure to Complete

 

If, at the Time of Closing, the Vendor fails to complete the transaction, the Purchaser shall have the right, without prejudice to any other rights which it may have, upon payment of the purchase price payable to the Vendor at the Time of Closing, to the credit of the Vendor (and/or of the Corporation, in respect of Shareholder Borrowings) in the main branch of the Corporation's bankers, to execute and deliver, on behalf of and in the name of the Vendor, such deeds, transfers, share certificates, resignations or other documents that may be necessary to complete the transaction (including in respect of any Shareholder Debt and Shareholder Borrowings) and the Vendor hereby irrevocably appoints the Purchaser its agent and attorney in that behalf and such appointment is coupled with an interest and the Vendor declares that this power of attorney may be exercised during any subsequent legal incapacity on its part.

 

10.6

Closing Place

 

Unless otherwise agreed to by the Vendor and Purchaser, the closing of any sale of Shares provided for in this Agreement shall take place at the head office of the Corporation.

 

ARTICLE 11

TOP-UP SHARES

 

Intentionally deleted.

 

 

ARTICLE 12

CONFIDENTIALITY

 

12.1

Confidentiality

 

The Shareholders shall at all times keep in confidence and not disclose any Confidential Information of the Corporation. The Shareholders shall at all times only use any Confidential Information for the purpose of the Corporation's business. For this purpose, “Confidential Information” means any and all information relating to the business and affairs of the Corporation, including but not limited to, any financial information, the private affairs of the Shareholders or related parties and any trade or business secrets. Confidential Information is the property of the Corporation. This confidentiality covenant survives any withdrawal or termination of the interest of a Shareholder in the Corporation.

 

ARTICLE 13

GENERAL

 

13.1

Term

 

This Agreement shall continue in full force and effect until the occurrence of any of the following events:

 

(a)

the dissolution of the Corporation in accordance with the provisions of the Act;

 

(b)

the agreement of all of the Shareholders to terminate this Agreement;

 

(c)

such time as all of the issued and outstanding Shares are held by one Shareholder; or

 

(d)

the Corporation completes a Liquidity Event.

 

13.2

Notices

 

(a)

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered in person or transmitted by e-mail or similar means of recorded electronic communication.

 

(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, on the next following Business Day).

 

13.3

Applicable Law

 

This Agreement shall be construed and enforced in accordance with and the rights of the parties hereto, shall be governed by the laws of the Province of Alberta and the laws of Canada applicable therein (with the exception of those provisions relating to conflict of laws) and the parties hereto do hereby irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta.

 

13.4

Severability

 

If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

 

13.5

Enurement and Assignment

 

This Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors and permitted assigns, and shall not be assignable by any party (except as set out in this Agreement) without the prior written consent of the other parties.

 

13.6

Waiver

 

No waiver by any party hereto of any breach of any of the provisions of this Agreement shall take effect or be binding upon the party unless in writing and signed by such party. Unless otherwise provided therein, such waiver shall not limit or affect the rights of such party with respect to any other breach.

 

13.7

Time of Essence

 

Time is of the essence in this Agreement.

 

13.8

Further Assurances

 

The Shareholders shall cause such meetings of the Corporation to be held, votes cast, resolutions passed, by-laws enacted, documents executed and all such things and acts done as may be necessary or desirable, whether in their role as shareholders, directors, officers or otherwise, to give full effect to this Agreement and every part hereof.

 

13.9

Independent Legal Advice

 

Each of the Shareholders acknowledges that he, she or it has been advised to obtain, and has had an opportunity to obtain, the advice of an independent legal advisor with respect to the terms and conditions herein contained.

 

13.10

Entire Agreement

 

This Agreement constitutes the entire agreement among the parties for the purpose of establishing their rights and obligations in respect of the Shares and the management and control of the Corporation and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties with respect thereto, except any confidentiality agreement that may exist between the Corporation and any Shareholder or Principal.

 

13.11

Counterparts

 

This Agreement may be executed in several counterparts, including by facsimile or other electronic means, each of which when so executed shall be deemed to be an original, and all such counterparts taken together shall constitute one and the same instrument.

 

[Remainder of page left intentionally blank; signature page follows]

 

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

 

	MINERA ANDES INC.
	Per:
		Name:	Anna Ladd-Kruger
		Title:	Chief Financial Officer
	EVANACHAN LIMITED
	Per:
		Name:	Robert R. McEwen
		Title:	President
	McEWEN COPPER INC.
	Per:
		Name:	Anna Ladd-Kruger
		Title:	Chief Financial Office

 

[Signature Page to Unanimous Shareholder Agreements]

 

 

SCHEDULE "A"

JOINDER

 

JOINDER TO

UNANIMOUS AGREEMENT OF THE HOLDERS OF COMMON SHARES

 

TO:

McEWEN COPPER INC. (the "Corporation") AND ITS CURRENT AND FUTURE SHAREHOLDERS THAT ARE PARTY TO THE UNANIMOUS AGREEMENT OF THE HOLDERS OF COMMON SHARES

 

RE:

UNANIMOUS AGREEMENT OF THE HOLDERS OF COMMON SHARES DATED AUGUST 20, 2021, AS AMENDED FROM TIME TO TIME (the "Unanimous Shareholder Agreement")

 

THIS JOINDER to the Unanimous Shareholder Agreement is made and entered into as of August 20, 2021 by the undersigned (the "New Shareholder"). Capitalized terms used herein but not otherwise defined have the meanings set forth in the Unanimous Shareholder Agreement.

 

WHEREAS the New Shareholder has subscribed or is acquiring certain shares (the "Acquired Shares") of the Corporation and the New Shareholder wishes to become a party to the Unanimous Shareholder Agreement in accordance with the terms hereof;

 

NOW THEREFORE in consideration of the issuance of the Acquired Shares to the New Shareholder and the sum of ONE DOLLAR ($1.00) the New Shareholder hereby agrees to the following:

 

(a)

the New Shareholder acknowledges receiving a copy of and reviewing the Unanimous Shareholder Agreement;

 

(b)

upon execution of this Joinder, the New Shareholder shall become a party to the Unanimous Shareholders Agreement and shall have all the rights and benefits of, and shall be fully bound by, and subject to, all of the terms of the Unanimous Shareholder Agreement as if the New Shareholder had originally executed the Unanimous Shareholder Agreement as a Shareholder;

 

(c)

the New Shareholder agrees that from time to time, and without further consideration, it will execute and deliver such other instruments and documents and take such further actions as may be requested by the Corporation in respect of the matters provided for in this Unanimous Shareholder Agreement;

 

(d)

the New Shareholder acknowledges being entitled to independent legal advice in respect of this Joinder and the Unanimous Shareholder Agreement, and has either obtained such advice or waived the right to do so, understands all rights and obligations arising under this Joinder and the Unanimous Shareholder Agreement and is signing this Joinder voluntarily;

 

(e)

if the New Shareholder is not an individual, then the New Shareholder and ______________________________________________________________ (if the New Shareholder is a corporation or other entity, the names of all individual legal and beneficial owners of the entity must be disclosed) (the "Owner(s)") represent that the Owner(s) (is/are collectively) the sole legal and beneficial owner(s) of all of the issued and outstanding voting shares of the New Shareholder;

 

 

(f)

the New Shareholder represents that it is acquiring the Acquired Shares in accordance with the terms of the Unanimous Shareholder Agreement; and

 

	(g)	the New Shareholder represents that the New Shareholder's address is as follows:

 

IN WITNESS WHEREOF, this Joinder has been executed as of the date first written above.

 

Dated:

 

Signed:

 

Name of the New Shareholder:

 

 

SCHEDULE "B"

DETERMINATION OF FAIR VALUE

 

Attached to and forming part of that Unanimous Shareholder Agreement dated August 20, 2021, among Minera Andes Inc., Evanachan Limited, McEwen Copper Inc. (the "Corporation") and those additional shareholders of the Corporation who become parties to the Unanimous Shareholder Agreement

 

1.

"Fair Value" means fair market value determined in accordance with the following process.

 

2.

If the parties agree on an amount, that amount shall be the Fair Value.

 

3.

If the parties cannot agree within 20 days of one party providing a notice to the others with a suggested Fair Value, the parties to the proposed transaction shall together select an independent third party acceptable to them who is appropriately qualified to determine fair market value (in any case, the "Valuator"), who shall determine the Fair Value within 30 days of being engaged (unless the parties agree to extend this period). If the parties are unable to agree on a Valuator, then each of them shall submit to the other the names of three proposed Valuators. Each party shall select one of the other's proposed Valuators. The party requesting referral to a Valuator shall then enter the two names into a lottery and select one of the two names so entered by coin flip. If either party fails to provide a list of proposed Valuators, the party who has provided its list may select a person from its own list to act as the Valuator.

 

4.

The Valuator shall have experience in valuing similar businesses and have at least fifteen years' experience in valuing businesses and is accredited as a chartered business valuator.

 

5.

The valuation of the Valuator shall be final and binding on the parties and there shall be no appeal from that valuation. The costs of the valuation shall be borne by the person who is the Triggered Shareholder.

 

6.

The Corporation and each of the Shareholders shall make available to the Valuator all books, records and other data and information in their possession or control as the Valuator may reasonably require for the purposes of its valuation.

 

7.

In determining the Fair Value, the Valuator may apply such principles of valuation as they consider appropriate in the circumstances.

 

 

SCHEDULE "C"

HOLDERS OF COMMON SHARES

 

Holders of Common Shares		Number of Common Shares Held
MINERA ANDES INC.			17,500,000
EVANACHAN LIMITED			4,000,000
TOTAL			21,500,000

 

 

 

Exhibit 10.5

 

 

McEwen Copper Closes US$15.0 Million Second Tranche of Private Placement

 

TORONTO, June 21, 2022 - McEwen Copper Inc., a subsidiary of McEwen Mining Inc. (NYSE: MUX) (TSX: MUX), is pleased to announce the closing of the second tranche of the previously announced private placement offering (the “Offering”) of up to 8,000,000 common shares of McEwen Copper Inc. priced at US$10.00 per common share. The second tranche is comprised of a $10 million investment by the Victor Smorgon Group advised by Arete Capital Partners, both of Australia, and $5 million from other investors, for total gross proceeds of $15.0 million. The amounts raised in the first and second tranches of the private placement now stand at $55.0 million. The Offering remains open until July 6^th, 2022.

 

McEwen Copper is well-funded to complete the updated preliminary economic assessment (PEA) in early Q1 2023, the upcoming drilling season from October 2022 to June 2023, and the planned IPO in H1 2023.

 

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

 

This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.

 

The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by the management of McEwen Mining Inc.

 

ABOUT MCEWEN COPPER

 

McEwen Copper owns 100% of the giant Los Azules Copper Project in San Juan, Argentina, and the Elder Creek Copper Project in Nevada, USA. There are 23 million common shares outstanding.

 

CONTACT INFORMATION:
Corporate Development:   Stefan Spears, VP [email protected]	Website: www.mcewenmining.com	150 King Street West Suite 2800, P.O. Box 24 Toronto, ON, Canada M5H 1J9