Document:

Exhibit 10.1

 

 

 

SUBORDINATED LOAN AGREEMENT

 

BETWEEN

 

GENERAL MOLY, INC.

 

AND

 

HANLONG (USA) MINING INVESTMENT, INC.

 

 

Dated as of October 26, 2012

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
2
    
	
 
    	
 
    
	
ARTICLE II LOANS
    	
2
    
	
2.1
    	
Commitments
    	
2
    
	
2.2
    	
Procedures for Borrowing
    	
3
    
	
2.3
    	
Interest
    	
4
    
	
2.4
    	
Security
    	
5
    
	
2.5
    	
Arrangement Fee
    	
5
    
	
2.6
    	
Purpose
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE III PAYMENTS
    	
5
    
	
3.1
    	
Repayment; Evidence of Debt
    	
5
    
	
3.2
    	
Prepayments
    	
6
    
	
3.3
    	
Application of Payments
    	
6
    
	
3.4
    	
Taxes
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV CONDITIONS PRECEDENT
    	
8
    
	
4.1
    	
Signing Conditions
    	
8
    
	
4.2
    	
Funding Conditions
    	
8
    
	
4.3
    	
Modification to Conditions Precedent
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V REPRESENTATIONS AND   WARRANTIES
    	
9
    
	
5.1
    	
Representations and Warranties
    	
9
    
	
5.2
    	
Modification to Representations and Warranties
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI AFFIRMATIVE COVENANTS
    	
11
    
	
 
    	
 
    
	
ARTICLE VII NEGATIVE COVENANTS
    	
11
    
	
 
    	
 
    
	
ARTICLE VIII EVENTS OF DEFAULT
    	
11
    
	
8.1
    	
Events of Default
    	
11
    
	
8.2
    	
Modification to Events of Default
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IX MISCELLANEOUS
    	
12
    
	
9.1
    	
Notices
    	
12
    
	
9.2
    	
Entire Agreement
    	
14
    
	
9.3
    	
Amendments
    	
14
    
	
9.4
    	
Modifications Following Bank Loan Facility
    	
14
    
	
9.5
    	
Assignment
    	
14
    
	
9.6
    	
Benefit
    	
15
    
	
9.7
    	
Specific Performance
    	
15
    
	
9.8
    	
Governing Law; Language
    	
15
    
	
9.9
    	
Severability
    	
15
    
	
9.10
    	
Headings and Captions
    	
15
    

 

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9.11
    	
Certain Terms
    	
15
    
	
9.12
    	
No Waiver of Rights, Powers and Remedies
    	
16
    
	
9.13
    	
Fees and Expenses
    	
16
    
	
9.14
    	
Counterparts
    	
16
    
	
9.15
    	
Rules of Construction
    	
16
    
	
9.16
    	
Consent to Jurisdiction; Waiver of Trial by Jury
    	
17
    
	
9.17
    	
Time is of the Essence
    	
17
    
	
9.18
    	
Certain Waivers
    	
17
    
	
9.19
    	
Costs of Enforcement
    	
18
    
	
9.20
    	
Modification to Miscellaneous Provisions
    	
18
    
	
 
    	
 
    	
 
    
	
SCHEDULE A Certain Definitions
    	
 
    
	
 
    	
 
    
	
EXHIBIT A Form of Borrowing Request
    	
 
    
	
 
    	
 
    
	
EXHIBIT B Form of Warrant
    	
 
    

 

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SUBORDINATED LOAN AGREEMENT

 

THIS SUBORDINATED LOAN AGREEMENT (this “Agreement”), dated October 26, 2012 (the “Signing Date”), is between General Moly, Inc., a Delaware corporation (the “Company”), and Hanlong (USA) Mining Investment, Inc., a Delaware corporation (“Lender”).

 

RECITALS

 

A.            The Company desires that Lender make certain loans to the Company, the proceeds of which will be used to finance the development and operation of the Mount Hope Project.

 

B.            The Company desires to secure its obligations under this Agreement (other than the Warrant) by granting Lender a security interest, subordinated to the security interest held by the Prime Chinese Bank(s) in connection with a term loan in the approximate amount of $665 million (the “Bank Loan Facility”), in all of the Company’s present and future assets, including, without limitation, its 80% interest in the Mount Hope Project.

 

C.            Simultaneously with the execution and delivery of this Agreement, the Company will deliver to Lender a warrant in the form of Exhibit B to purchase 10 million shares of common stock in the Company (the “Warrant”).

 

In consideration of the mutual covenants contained in this Agreement, the parties, intending to be legally bound, agree as follows.

 

AGREEMENT

 

ARTICLE I
 DEFINITIONS

 

Capitalized terms used herein shall have the respective meanings set forth in Schedule A.

 

ARTICLE II
 LOANS

 

2.1          Commitments.  Subject to the terms and conditions of this Agreement:

 

(a)           Lender shall lend, or subject to Section 2.1(c), upon a written notice from Lender to the Company on or before the expiry of the 180th date from Signing Date, Lender may propose to arrange in the manner and subject to the Company’s approval as described in Section 2.1(c) below, for a third party or a syndication of third parties to lend, a non-revolving term loan (“Tranche A Facility”) in one or more advances made to the Company from time to time during the Tranche A Facility Availability Period in an aggregate principal amount that at any time outstanding does not exceed the difference of US$75,000,000 minus 80% of the Lease Savings, if any (the “Tranche A Facility Commitment”), and

 

 

(b)           Lender shall lend, or subject to Section 2.1(c), upon a written notice from Lender to the Company on or before the expiry of the 180th date from Signing Date, Lender may proposed to arrange in the manner and subject to the Company’s approval as described in Section 2.1(c) below, for a third party or a syndication of third parties to lend, a non-revolving term loan (“Tranche B Facility”) to the Company from time to time during the Tranche B Facility Availability Period in an aggregate principal amount at any time outstanding that does not exceed the amount of US$50,000,000 (the “Tranche B Commitment”).  If, prior to the Tranche B Facility Availability Period, the Company has drawn all funds available under the Tranche A Facility, the Company may, until the Tranche B Facility Availability Period begins and the preceding sentence takes effect, draw from the Tranche B Facility (as part of the Tranche B Commitment) an amount up to US$25,000,000 minus the exercise price paid, if any,  by Lender to the Company to exercise any of the Warrants prior to Commercial Production.

 

(c)           If Lender exercises the option to propose a third party lender or syndication of third parties to lend (together, the “Third Party Lender”) as described in Section 2.1(a) and 2.1 (b) it shall promptly provide the Company with all reasonably necessary information for the Company to determine that the Third Party Lender will be an acceptable substitute for Lender.  The Company shall promptly assess the suitability of the Third Party Lender based on additional costs to the Company, credit worthiness of the Third Party Lender and the effect on the Company of any required withholdings and related make-wholes or indemnities as a result of substituting the Third Party Lender for some or all of the commitments of Lender.  The Company shall promptly make a good faith review of the acceptability of the Third Party Lender and shall not unreasonably withhold its approval of the substitution as proposed by Lender.

 

The Company may use each Commitment during the applicable Availability Period therefor by borrowing in accordance with the terms and conditions hereof.  Subject to the terms and conditions of this Agreement, the Facilities may from time to time be a Tranche A Facility or Tranche B Facility, as determined by the Company and notified to Lender in accordance with Sections 2.2 and 2.3.

 

2.2          Procedures for Borrowing.

 

(a)           The Company may, subject to the satisfaction of the conditions set forth in Section 4.2 hereof, borrow under one or more of the Commitments on any Business Day during the applicable Availability Period therefor, provided that the Company shall deliver to Lender a Borrowing Request signed by an officer of the Company (which Borrowing Request must be received by Lender at least five  Business Days prior to the requested Borrowing Date).

 

(b)           Each Borrowing Request shall specify, as applicable, (i) the applicable Facility, (ii) the requested Borrowing Date, (iii) the principal amount requested by the Company, which shall be in an amount equal to at least US$5,000,000 (or, if the then Commitment therefor is less than US$5,000,000, such lesser amount) and may not exceed the maximum amount of the Commitments, (iv) unless previously notified to Lender in writing and not revoked, the details of the bank and Funding Account to which 

 

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the proceeds of the requested Facility are to be transferred in accordance with Section 2.2(c).  The Borrowing Request shall also certify that all conditions precedent under Article IV to Lender’s extension of credit hereunder as of such Borrowing Date have been satisfied.

 

(c)           Upon receipt of any such Borrowing Request from the Company and subject to the satisfaction or waiver of the other conditions precedent set forth in Section 4.2, Lender shall transfer the amount under the applicable Facility as specified in such Borrowing Request to the Company at the Funding Account prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the Company in Dollar funds immediately available to the Company.

 

2.3          Interest.

 

(a)           The outstanding principal amount under this Agreement shall bear interest for each day during each Interest Period at a rate per annum equal to LIBOR in effect during such Interest Period plus 4%, adjusted with respect to each Interest Period.

 

(b)           Interest payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed.

 

(c)           Notwithstanding anything herein to the contrary, if any principal of, or interest on, any Facility payable by the Company hereunder is not paid when due (including failure to pay each of the Facilities payable by the Company on the Maturity Date or earlier upon acceleration of any Facility in accordance with Article VIII), and, as a result, an Event of Default shall have occurred and is continuing, such overdue amount shall bear interest at a rate per annum equal to the rate otherwise applicable under Section 2.3(a) plus 4%.

 

(d)           Notwithstanding anything herein to the contrary, the Company shall not be required to pay, and Lender shall not be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by Law (“Excess Interest”).  If any Excess Interest is provided for, or determined by a court of competent jurisdiction or in an arbitration to have been provided for, in this Agreement then in such event:  (i) the Company shall not be obligated to pay any Excess Interest, (ii) any Excess Interest that Lender may have received hereunder shall be, at Lender’s option, (A) applied as a credit against the principal of any Facility due and owing to Lender or for accrued and unpaid interest thereon (not to exceed the maximum amount permitted by Law), (B) refunded to the Company, or (C) any combination of the foregoing, (iii) the applicable interest rate or rates provided for herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable Law (the “Maximum Rate”), and this Agreement shall be deemed to have been and shall be, reformed and modified to reflect such reduction, and (iv) the Company shall not have any action against Lender for any damages arising out of the payment or collection of any Excess Interest.  Notwithstanding the immediately preceding sentence of this Section 2.3(d), if for any period of time interest on any Facility is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the 

 

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Maximum Rate, the rate of interest payable on such Facility shall, to the extent permitted by Law, remain at the Maximum Rate until Lender shall have received or accrued the amount of interest which Lender would have received or accrued during such period on Facilities due and owing to Lender had the rate of interest not been limited to the Maximum Rate during such period.

 

2.4          Security.  The Facilities shall be secured, pursuant to (a) the Security Documents, by a lien upon the Company Collateral (as will be defined in the Security Documents) and (b) the Pledge Agreement providing Nevada Moly’s pledge of an 80% Percentage Interest (as defined in the Eureka Moly LLC Agreement) in Eureka Moly.

 

2.5          Arrangement Fee.  A non-refundable arrangement fee of US$6,250,000 is due from the Company to Lender on the Signing Date, provided, however, that Lender agrees the payment will be deferred (without interest or penalty) until the earlier of (a) the first draw by the Company under the Bank Loan Facility, (b) the Company having received net proceeds, if any, from the exercise of the Warrant prior to Commercial Production of more than $8 million after the Signing Date or from the sale of its equity securities or securities convertible into equity securities or from other loans, and (c) if the Bank Loan Facility is in effect, two years after the Signing Date.  The arrangement fee shall be deemed earned upon the Signing Date and shall not be applied to any portion of the principal or interest owing under the Facilities.

 

2.6          Purpose.  The Company shall use the proceeds of the Facilities to finance the development and operation of the Mount Hope Project.

 

ARTICLE III
 PAYMENTS

 

3.1          Repayment; Evidence of Debt.

 

(a)           The Company shall pay accrued but unpaid interest under the Facilities semi-annually in arrears, on the first Business Day (each, a “Payment Date”) on or after (i) April 26 and (ii) October 26 of each year, commencing with the first Payment Date occurring after the first Borrowing Date (each such period starting on the day after each Payment Date and running through the next Payment Date or, if earlier, the Maturity Date, an “Interest Period;” provided that the first Interest Period shall begin on the date hereof and end on the first Payment Date occurring after the first Borrowing Date).  The Company shall repay the outstanding principal amounts of, and pay all accrued and unpaid interest on, the Facilities on the fifth anniversary of the start of Commercial Production (the “Maturity Date”).  Except as otherwise expressly provided in this Agreement or such other Transaction Document, payments by the Company pursuant to this Agreement or any other Transaction Document, whether in respect of the Loan, interest or otherwise, shall be made by the Company to Lender not later than 12:00 noon (New York time) on the date due by delivery of United States Dollars in immediately available funds.  Any payments received hereunder after the time and date specified in this Section 3.1 shall be deemed to have been received by Lender on the next following Business Day.

 

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(b)           Lender shall maintain in accordance with good commercial practice an account or accounts evidencing indebtedness of the Company to Lender resulting from each Facility from time to time, including the amounts of principal and interest payable and paid to Lender from time to time under this Agreement.  The failure of Lender to maintain any such account under this Section 2.1(b), or any error therein, shall not in any manner affect the obligation of the Company to repay (with applicable interest) the Facilities in accordance with the terms of this Agreement.

 

(c)           All payments of principal of, and interest on, the Facilities shall be made to Lender at such account or accounts at a bank in the United States as Lender shall have specified by notice to the Company in Dollar funds immediately available to Lender.  Subject to Section 3.4, all payments shall be made without setoff or counterclaim, rights of rescission and free and clear of and without deduction or withholding for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any country or any political subdivision thereof or taxing or other authority therein unless the Company is required by law to make such deduction or withholding.

 

3.2          Prepayments.

 

(a)           Optional Prepayment.  The Company may at any time and from time to time prepay the outstanding principal amounts of, and accrued and unpaid interest on, the Facilities, in whole or in part, without premium or penalty.

 

(b)           Mandatory Prepayment.  On each Payment Date after the Company begins making cash sweep payments under the Bank Loan Facility, the Company shall (in addition to the interest payment pursuant to Section 3.1(a) above) pay an amount equal to 50% of the Company’s semi-annual Mount Hope Free Net Cash Flow to Lender to prepay the outstanding principal amount of the Facilities.

 

(c)           No Revolving Borrowings.  The Facilities are not revolving Facilities and the Facilities shall be permanently reduced by the aggregate of the principal amounts of the Facilities repaid and may not thereafter be reborrowed.

 

3.3          Application of Payments.  Each payment by the Company on account of the outstanding principal amount of the Facilities shall applied first, to Lender’s fees and reimbursable expenses then due and payable pursuant to any Transaction Document; second, to interest then due and payable on the Facilities, pro rata with respect to all the Facilities according to the respective amounts thereof immediately prior to such payment; and third, to the principal balance of the Facilities as specified by the Company by written notice to Lender with respect to such payment and, if the Company has not specified an allocation with respect to such payment, pro rata to all the Facilities according to the respective outstanding principal amounts thereof immediately prior to such payment.  Each payment by the Company of interest with respect to the Facilities shall be allocated among the amounts of accrued and unpaid interest on the Facilities as specified by the Company by written notice to Lender with respect to such payment and, if the Company has not specified an allocation with respect to such payment, pro rata to all the amounts of accrued and unpaid interest on the Facilities according to the respective amounts 

 

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thereof immediately prior to such payment.  Each payment of the principal amount of the Facilities shall be accompanied by accrued and unpaid interest thereon to but excluding the date of such payment.  Notwithstanding the foregoing to the contrary, following acceleration of any Facility in accordance with Article VIII, all sums collected by Lender from the Company or from the proceeds of any collateral shall be applied as Lender shall determine in its sole discretion.

 

3.4          Taxes.

 

(a)           Any and all payments by or on account of any obligation of the Company hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided, that if the Company shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.4) Lender shall receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Company shall make such deductions and (iii) the Company shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)           In addition, the Company shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c)           The Company shall indemnify Lender, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by Lender, on or with respect to any payment by or on account of any obligation of the Company hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 3.4) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Company by Lender shall be conclusive absent manifest error.

 

(d)           As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the Company shall deliver to Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Lender.

 

(e)           Lender (and its successors and/or assigns) shall provide any such forms or statements that are reasonably requested by Company in order for Company to properly determine and comply with its Tax withholding and Tax information reporting requirements under applicable Law (including Internal Revenue Service Form W-9, W-8BEN, or W-8ECI, as may be applicable).  Such forms or statements shall be delivered by Lender (or any permitted transferee of Lender) on or before the date it becomes a party to this Agreement.  In addition, Lender (or any permitted transferee of Lender) shall deliver such new forms or statements as may be required promptly upon the obsolescence or invalidity of any form or statement previously delivered by such party.  Lender (or any permitted transferee of Lender) shall promptly notify the Company at any time it 

 

7

 

determines that it is no longer in a position to provide any previously delivered certificate to the Company (or any other form of certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this paragraph, Lender (or any permitted transferee of Lender) shall not be required to deliver any form or statement pursuant to this paragraph that such party is not legally able to deliver.

 

(f)            If Lender receives any refund of any Taxes or, Other Taxes as to which it has been indemnified by the Company or with respect to which the Company has paid additional amounts under this Section 3.4, it shall pay to the Company the amount of such refund, to the extent of the additional amounts paid, or the amounts indemnified, by the Company, in either case net of the out of pocket expenses incurred by Lender in obtaining the refund; provided, that if Lender is required to repay such refund to the applicable Governmental Authority, then the Company shall repay to Lender all amounts previously paid to the Company with respect to such refund.

 

(g)           If the Company is required to pay any additional amounts under this Section 3.4 with respect to any payment to any Lender, then at the Company’s request, Lender will use reasonable efforts to assign its rights under this Agreement to an affiliate of Lender, or to another lending office, as to which payments would not subject the Company to the obligation to pay any such additional amounts.

 

(h)           If a Person becomes a Lender by assignment from another Person, or acquires a right as a participant in any interest under this Agreement held by a Lender, such Person shall not be entitled to any benefits under this Section 3.4 without the consent of the Company.

 

ARTICLE IV
 CONDITIONS PRECEDENT

 

4.1          Signing Conditions.  The Company has satisfied or Lender has waived in writing the following conditions as of the Signing Date:

 

(a)           Lender has received the Warrant executed by the Company,

 

(b)           Lender and the Company have entered into an Amendment No. 1 to the Stockholder Agreement, and

 

(c)           The Company has not breached in any material respect any of the representations and warranties set forth in Article V.

 

4.2          Funding Conditions.  The agreement of Lender to transfer funds hereunder on any Borrowing Date is subject to the satisfaction by the Company or waiver in writing by Lender of the following conditions:

 

(a)           Lender shall have received the Security Documents executed by the Company,

 

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(b)                                 Lender shall have received the Pledge Agreement executed by Nevada Moly,

 

(c)                                  the Company shall, in all material respects, have performed and complied with its covenants or agreements in this Agreement, and Nevada Moly shall, in all material respects, have performed and complied with its covenants or agreements in the Pledge Agreement,

 

(d)                                 Lender shall have received from the Company a duly executed Borrowing Request,

 

(e)                                  no Default or Event of Default shall have occurred and be continuing on the date the Company delivers such Borrowing Request and on the Borrowing Date,

 

(f)                                   on or before the date that is 9 months after the issuance by the US Bureau of Land Management of the Record of Decision with respect to the Mount Hope Project (or any later date provided in any amendment to the Availability Periods provision in Schedule 2 to the Securities Purchase Agreement, dated March 4, 2010, between the Company and Lender, as amended), the Company shall have entered into documents evidencing the Bank Loan Facility, which documents shall be in form and substance satisfactory to Lender in its reasonable discretion, and

 

(g)                                  The full amount of the proceeds under the Bank Loan Facility shall have been advanced to the Company.

 

4.3                               Modification to Conditions Precedent.  The conditions precedent of this Agreement are subject to the provisions of Section 9.4.

 

ARTICLE V
 REPRESENTATIONS AND WARRANTIES

 

5.1                               Representations and Warranties.  The Company represents and warrants to Lender that the following are true and correct in all material respects as of the Signing Date, as of the date of each Borrowing Request as though made on and as of such date (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date) and as of each Borrowing Date as though made on and as of such date (except that those representations and warranties which address matters only as of a particular date need only be true and correct as of such date):

 

(a)                                 Organization and Standing.  Each of the Company and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority necessary for it to own or lease its properties and assets and to carry on its business as it is now being conducted (and, to the extent described therein, as described in the SEC Reports).  Each of the Company and its Subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of its businesses makes such qualification necessary, except where any failure to so qualify 

 

9

 

or be in good standing, individually or in the aggregate, would not have a material adverse effect on the business, assets, operations, properties or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or on the Company’s ability to consummate the transactions contemplated by this Agreement (a “Material Adverse Effect”).

 

(b)                                 Authorization and Enforceability.  The Company has the corporate power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance by it of, and the consummation of the transactions contemplated by, this Agreement and such other Transaction Documents.  No other corporate proceeding on the part of the Company is necessary for the valid execution and delivery by the Company of this Agreement, and the performance and consummation by the Company of the transactions contemplated by this Agreement to be performed by the Company, except as has been obtained or waived.  With respect to the other Transaction Documents to which the Company will be a party, no other corporate proceedings on the part of the Company will be necessary for valid execution and delivery by the Company of such other Transaction Documents, and the performance and consummation of the Company of the transactions contemplated by such other Transaction Documents will be performed by the Company, except as will have been obtained or waived.  The Company has duly executed and delivered this Agreement and, when executed and delivered by it, will have duly executed and delivered the other Transaction Documents to which it is a party.  Assuming the due execution and delivery of this Agreement by Lender, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at Law).  Assuming the due execution and delivery of the Transaction Documents to which the Company is a party (other than this Agreement) by Lender, each of such Transaction Documents, when executed and delivered by the Company, will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(c)                                  No Violations; Consents.

 

(i)                                     The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby to be performed by the Company do not and will not (A) assuming that all consents, approvals, authorizations and other actions described in Section 5.1(c)(ii) have been obtained and all filings and obligations described in Section 5.1(c)(ii) have been made, conflict with, violate or contravene the applicable provisions of any Law of any Governmental Agency to or by which the Company or any of its 

 

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Subsidiaries or any of its or their respective assets is bound, (B) violate, result in a breach of or constitute (with due notice or lapse of time or both) a default or give rise to an event of acceleration under, or give to others any right of termination, amendment, or cancellation of, or give to others a right to require any payment to be made under, any contract, lease, license, permit, loan or credit agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Company is a party or by which it or any of its Subsidiaries is bound or to which any of their respective assets is subject, nor result in the creation or imposition of any lien, security interest, charge or encumbrance of any kind upon any of the assets or capital stock of the Company or any of its Subsidiaries, or (C) conflict with or violate any provision of the organizational and other governing documents of the Company or any of its Subsidiaries, except in the case of each of clauses (A), (B) and (C) above as would not have a Material Adverse Effect.

 

(ii)                                  Subject to the accuracy of Lender’s representations and warranties in the Transaction Documents, no consent, approval, authorization or order of, or filing or registration with, any Governmental Authority or other Person is required to be obtained or made by the Company for the execution, delivery and performance of this Agreement or the consummation of any of the transactions contemplated hereby, except for (A) reporting pursuant to securities Law, (B) any filings required to be made under the rules and regulations of the NYSE MKT and the Toronto Stock Exchange, and (C) if deemed reasonable or necessary by the Company acting in good faith at the time, prior to the issuance of shares upon exercise of the Warrant, provision of notice to the Antitrust Division of the United States Department of Justice and the United States Federal Trade Commission pursuant to the Hart-Scott-Rodino Improvements Act of 1976 and expiration of all applicable waiting periods (and all extensions thereof) and issuance as applicable of any final, non-appealable consents, approvals, authorizations, and orders, or decisions neither to initiate proceedings or otherwise intervene.

 

5.2                               Modification to Representations and Warranties.  The representations and warranties of this Agreement are subject to the provisions of Section 9.4.

 

ARTICLE VI
 AFFIRMATIVE COVENANTS

 

The affirmative covenants of this Agreement are subject to the provisions of Section 9.4.

 

ARTICLE VII
 NEGATIVE COVENANTS

 

The negative covenants of this Agreement are subject to the provisions of Section 9.4.

 

ARTICLE VIII
 EVENTS OF DEFAULT

 

8.1                               Events of Default.  If any of the following events shall occur and be continuing:

 

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(a)                                 The Company shall fail to pay any principal amount of any Facility or any interest on any Facility by the date the same becomes due under this Agreement, and such failure continues for more than ten Business Days thereafter,

 

(b)                                 The Company shall breach in any material respect any of its representations or warranties in this Agreement or shall breach or fail in any material respect to perform or comply with any of its covenants or agreements in this Agreement or any other Transaction Document to which the Company is a party, or Nevada Moly shall breach or fail in any material respect to perform or comply with any of its covenants or agreements in the Pledge Agreement, and such breach cannot be cured or has not been cured within 30 days after the giving of written notice by Lender to the Company specifying such breach, or

 

(c)                                  (i) The Company makes a general assignment for the benefit of its creditors, (ii) the Company commences a voluntary case or proceeding under any applicable bankruptcy, insolvency or reorganization Law seeking to be adjudicated a bankrupt or insolvent, (iii) the Company consents to the entry of an order for relief in respect of the Company in an involuntary case or proceeding under any applicable bankruptcy, insolvency or reorganization Law, or (iv) a court of competent jurisdiction enters a decision, decree or other order, which decision, decree or other order remains unstayed and in effect for 60 days, under any Law relating to bankruptcy, insolvency or reorganization that is for relief against the Company in an involuntary case, that appoints a custodian of the Company or for a substantial part of its property or that orders the winding up or liquidation of the Company;

 

then, and in any such event, (A) if such event is an Event of Default specified in clause (c) above, automatically the Commitments shall immediately terminate and the outstanding principal amount of the Facilities (with accrued and unpaid interest thereon) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken:  (1) Lender may, by notice to the Company, declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate, and (2) Lender may, by notice to the Company, declare the outstanding principal amount of the Facilities (with accrued and unpaid interest thereon) to be due and payable forthwith, whereupon the same shall immediately become due and payable.

 

8.2                               Modification to Events of Default.  The Events of Default in this Agreement are subject to the provisions of Section 9.4.

 

ARTICLE IX
 MISCELLANEOUS

 

9.1                               Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth below or to such other address as a party may designate by notice under this Section 9.1, and shall be either (a) delivered by hand, (b) made by telecopy or facsimile transmission or (c) sent by sent by Federal Express, DHL, UPS or another internationally recognized delivery service.

 

12

 

	
If   to Lender:
    	
Hanlong   (USA) Mining Investment, Inc.
   Suite 2903, 9 Castlereagh Street
   Sydney, NSW 2000 Australia
   Attention:  Nelson Chen
   Facsimile:  61-29235-2482
    
	
 
    	
 
    
	
With   copies to:
    	
McCarthy   Tétrault
    
	
 
    	
Suite   1300, Pacific Centre
    
	
 
    	
777   Dunsmuir Street
    
	
 
    	
Vancouver,   British Columbia
    
	
 
    	
V7Y   1K2 Canada
    
	
 
    	
Attention:    Joyce Lee
    
	
 
    	
Facsimile:    +1-604-643-7900
    
	
 
    	
 
    
	
 
    	
and
    
	
 
    	
 
    
	
 
    	
Parr   Brown Gee & Loveless
    
	
 
    	
185   South State Street, Suite 800
    
	
 
    	
Salt   Lake City, UT 84111
    
	
 
    	
U.S.A.
    
	
 
    	
Attention:    Keith Pope
    
	
 
    	
Facsimile:    +1 801 532.7750
    
	
 
    	
 
    
	
If   to the Company:
    	
General   Moly, Inc.
    
	
 
    	
1726   Cole Blvd.
    
	
 
    	
Suite   115
    
	
 
    	
Lakewood,   CO 80401
   U.S.A.
    
	
 
    	
Attention:    Chief Executive Officer
    
	
 
    	
Facsimile:    +1 (303) 928-8598
    
	
 
    	
 
    
	
With   a copy to:
    	
Bryan   Cave LLP
    
	
 
    	
1700   Lincoln Street
    
	
 
    	
Suite   4100
    
	
 
    	
Denver,   CO 80203-4541
   U.S.A.
    
	
 
    	
Attention:    W. Dean Salter
    
	
 
    	
Charles D. Maguire, Jr.
    
	
 
    	
Facsimile:    +1 (303) 866-0200
    

 

13

 

All notices, requests, consents and other communications hereunder shall be deemed to have been given and received (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above; (ii) if by telecopy or facsimile transmission, on the day that receipt thereof has been acknowledged by electronic confirmation or otherwise; or (iii) if sent by internationally recognized delivery service, on the day of actual receipt.

 

9.2                               Entire Agreement.  This Agreement, including exhibits or other documents referred to herein or that specifically indicate that they were delivered in connection with this Agreement, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

9.3                               Amendments.  The terms and provisions of the Agreement may be modified, amended or waived, or consent for the departure from such terms and provisions may be granted, only by written consent of the Company and Lender.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

9.4                               Modifications Following Bank Loan Facility.  The Bank Loan Facility is being negotiated and the final form of that agreement is not known.  The parties intend that this Agreement, as well as the other Transaction Documents (other than the Warrant and Stockholder Agreement), shall correspond in all material respects with the Bank Loan Facility when it is final as to conditions precedent (including delivery of guarantees, indemnities, security documents and other documents similar to those required to be delivered pursuant to the Bank Loan Facility), representations and warranties, affirmative and negative covenants, events of default, indemnification provisions, and the miscellaneous provisions addressed by this Article 9.  Accordingly, the parties will amend this Agreement to incorporate such additional terms, together with additional representations and warranties, affirmative covenants, and events of default as are customarily included in subordinated loan documents, including, without limitation, covenants restricting the Company’s right to amend the documents evidencing the Bank Loan Facilities and cross defaults, and will enter into such additional documents as required hereby.  In addition, Lender will not unreasonably withhold its consent to modifications requested by the lenders under the Bank Loan Facility to this Agreement or the other Transaction Documents (excluding the Warrant and the Stockholder Agreement), and Lender and such lenders under the Bank Loan Facility shall enter into an intercreditor agreement on terms and conditions reasonably acceptable to the Lender, which shall provide for the subordination of this Agreement and the Security Documents to the Bank Loan Facility.  The parties intend this Agreement to be legally binding and believe that the terms required to be incorporated herein as a result of the Bank Loan Facility are, or will be, ascertainable and are not unreasonably vague or uncertain as to affect the validity of this Agreement.

 

9.5                               Assignment.  Except as otherwise provided herein, Lender may not assign its rights or delegate its obligations under this Agreement without the express prior written consent of the Company, except to an Affiliated entity.

 

14

 

9.6                               Benefit.  All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed to create any rights or obligations except between the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

 

9.7                               Specific Performance.  The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity.

 

9.8                               Governing Law; Language.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of New York, including Section 5-1401 of the New York General Obligation Law, applicable to agreements made and to be performed entirely within the State of New York, without giving effect to the conflict of law principles thereof that would cause the application of the laws of any jurisdiction other than the State of New York.  This Agreement has been negotiated and executed by the parties in English.  In the event any translation of this Agreement is prepared for convenience or any other purpose, the provisions of the English version shall govern.

 

9.9                               Severability.  In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect.  In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.

 

9.10                        Headings and Captions.  The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or constructions of any of the terms or provisions hereof.

 

9.11                        Certain Terms.

 

(a)                                 Unless the context of this Agreement otherwise clearly requires, (i) references to the plural include the singular, and references to the singular include the plural, (ii) references to one gender include the other gender, (iii) the words “include,” “includes” and “including” do not limit the preceding terms or words and shall be deemed to be followed by the words “without limitation,” (iv) the terms “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, (v) reference to day, without the explicit qualification of “business” refers to a calendar day, (vi) references to a month, quarter, year or such other subdivision, without the explicit qualification of “fiscal”, refers to a calendar month, quarter, year or other such subdivision, respectively, (vii) all references to “the date hereof,” “the date of this Agreement” or similar terms (but excluding references to the date of execution hereof) refer to the Signing Date, notwithstanding that the parties may have executed this Agreement on a later date, and (viii) references to any Person include such Person’s respective successors, assigns, transferees, 

 

15

 

lessees, heirs, executors and administrators, whether by merger, consolidation, amalgamation, reorganization, sale of assets or otherwise.

 

(b)                                 Unless otherwise set forth herein, references in this Agreement to (i) any document, instrument or agreement (including this Agreement) (A) include and incorporate all exhibits, schedules and other attachments thereto, (B) include all documents, instruments or agreements issued or executed in replacement thereof and (C) mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time, and (ii) a particular Law referenced herein means such Law as amended, modified, supplemented or succeeded, from time to time and in effect at any given time.  When a reference is made in this Agreement to Articles, Sections or any other subdivision, such reference is to an Article, a Section or other subdivision of this Agreement, unless otherwise indicated.  When a reference is made in this Agreement to a party or parties, such reference is to parties to this Agreement, unless otherwise indicated.  Unless otherwise specified, all references to “$” shall be deemed to be references to the lawful currency of the United States.

 

9.12                        No Waiver of Rights, Powers and Remedies.  No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of the party.  No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from other or further exercise thereof or the exercise of any other right, power or remedy hereunder.  The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.

 

9.13                        Fees and Expenses.  Except as otherwise expressly provided herein, each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

 

9.14                        Counterparts.  This Agreement may be executed in counterparts (including by facsimile or similar means of electronic communication), each of which shall be deemed an original and all of which together shall constitute one agreement.

 

9.15                        Rules of Construction.  The parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

16

 

9.16                        Consent to Jurisdiction; Waiver of Trial by Jury. EACH OF THE COMPANY AND LENDER HEREBY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT SITTING IN THE CITY AND COUNTY OF NEW YORK (COLLECTIVELY, THE “NEW YORK COURTS”) FOR THE PURPOSE OF ANY DISPUTES ARISING OUT OF THE TRANSACTION DOCUMENTS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE COMPANY AND LENDER HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT AND (II) IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE, OR OTHERWISE, IN ANY SUCH ACTION, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE NEW YORK COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE ACTION IS IMPROPER, OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY ANY OF THE ABOVE-NAMED COURTS.  IN ANY SUCH ACTION OR PROCEEDING, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,  EACH OF THE COMPANY AND LENDER HEREBY ABSOLUTELY AND IRREVOCABLY WAIVES TRIAL BY JURY AND PERSONAL IN HAND SERVICE OF ANY SUMMONS, COMPLAINT, DECLARATION OR OTHER PROCESS AND HEREBY ABSOLUTELY AND IRREVOCABLY AGREE THAT THE SERVICE MAY BE MADE BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO IT AT ITS ADDRESS SET FORTH IN OR FURNISHED PURSUANT TO THE PROVISIONS OF THIS AGREEMENT, OR BY ANY OTHER MANNER PROVIDED BY LAW.  EACH OF THE COMPANY AND LENDER HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT A PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THE TRANSACTION DOCUMENTS AGAINST ANY OTHER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

9.17                        Time is of the Essence.  Time is of the essence in performance of this Agreement.

 

9.18                        Certain Waivers.  Except for any notices specifically required by this Agreement, the Company and all others who may become liable for the payment of all or any part of the Facilities do hereby severally waive presentment and demand for payment, notice of dishonor, protest and notice of protest, notice of non-payment and notice of intent to accelerate the maturity hereof (and of such acceleration).  No release of any collateral for the Facilities or extension of time for payment of this Agreement or any installment hereof, and no alteration, amendment or waiver of any provision of this Agreement or the Security Documents or the Pledge Agreement made by agreement between Lender and any other Person shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of the 

 

17

 

Company, or any other Person who may become liable for the payment of all or any part of the Facilities.  Lender may release any guarantor or indemnitor of the Facilities from liability, in every instance without the consent of the Company hereunder, and without waiving any rights Lender may have hereunder.

 

9.19                        Costs of Enforcement.  Upon the occurrence and during the continuance of an Event of Default, the Company, upon demand from Lender, shall pay to Lender the amount of any and all expenses, including reasonable fees and disbursements of counsel and of any experts and court costs, which Lender incurs with respect to the exercise or enforcement of any of the rights and remedies of Lender hereunder.

 

9.20                        Modification to Miscellaneous Provisions.  The provisions set forth in this Article 9 are subject to amendment as provided in Section 9.4.

 

[Signature page follows]

 

18

 

Executed as of the date first set forth above.

 

 

	
 
    	
GENERAL   MOLY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bruce D. Hansen
    
	
 
    	
Name:
    	
Bruce   D. Hansen
    
	
 
    	
Title:
    	
Chief   Executive Officer
    

 

 

	
HANLONG   (USA) MINING INVESTMENT, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Nelson Feng Chen
    	
 
    
	
Name:
    	
Nelson   Feng CHEN
    	
 
    
	
Title:
    	
Director
    	
 
    

 

[SIGNATURE PAGE OF SUBORDINATED LOAN AGREEMENT]

 

 

SCHEDULE A
 (to Subordinated Loan Agreement)

 

Certain Definitions

 

“Affiliate”:  As defined in Rule 405 under the Securities Act, provided none of the Company and its Subsidiaries shall be deemed an affiliate of Lender and neither Lender, POS-Minerals, nor any of its respective Affiliates shall be deemed to be an affiliate of the Company or any of its Subsidiaries.

 

“Availability Period”:  The Tranche A Facility Availability Period or the Tranche B Facility Availability Period, as applicable.

 

“Bank Loan Facility”:  As defined in the Recitals.

 

“Borrowing Date”:  Any Business Day specified by the Company in any Borrowing Request as a date on which the Company requests Lender to lend funds hereunder.

 

“Borrowing Request”:  A request made by the Company to borrow under any Facility, substantially in the form of Exhibit A.

 

“Business Day”:  (a) For all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City or Beijing China are authorized or required by Law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, a Facility, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank Eurodollar market.

 

“Commercial Production”:  As defined in the Eureka Moly LLC Agreement.

 

“Commitment”:  The Tranche A Facility Commitment or the Tranche B Facility Commitment, as applicable.

 

“Default”:  An event that with notice or the passage of time or both would constitute an Event of Default.

 

“Dollars”:  The lawful currency of the United States.

 

“Excluded Taxes” shall mean with respect to Lender, or any other recipient of any payment to be made by or on account of any obligation of the Company hereunder, (a) income (however determined) or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Lender is located and (c) in the case of a Foreign Lender, as applicable, any withholding tax that (i) is imposed on amounts payable to Lender at the time Lender becomes a party to this Agreement, (ii) is imposed on amounts payable to Lender at any time that Lender designates a new lending office, other

 

Sched. A-1

 

than taxes that have accrued prior to the designation of such lending office that are otherwise not Excluded Taxes or (iii) is attributable to Lender’s failure to comply with, or to deliver any documentation described in, Section 3.4(e).

 

“Eureka Moly”: Eureka Moly, LLC, a Delaware limited liability company.

 

“Eureka Moly LLC Agreement”: The Amended and Restated Limited Liability Company Agreement of Eureka Moly, LLC, dated February 26, 2008, between Nevada Moly and POS-Minerals, as amended.

 

“Event of Default”:  Any of the events set forth in clause (a), (b) or (c) of Section 8.1, or as established pursuant to Section 8.2, provided in each case that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Excess Interest”:  As defined in Section 2.3(d).

 

“Facilities”:  The Tranche A Facility and the Tranche B Facility.

 

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than any state in the United States of America or of the District of Columbia.

 

“Funding Account”:  An account or accounts specified by the Company in any Borrowing Request in which the Company requests Lender to transfer the amount of the Facilities requested pursuant to Section 2.2(c).

 

“Governmental Authority”:  Any U.S. court or any U.S. federal or state government or political subdivision thereof and any U.S. agency or other U.S. entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Interest Period”:  As defined in Section 3.1(a).

 

“Law”:  Any applicable U.S. federal, state or local statute, code, ordinance, decree, rule, regulation or general principle of common or civil law or equity.

 

“Lease Savings” means the full purchase price for equipment that Eureka Moly has leased, with the authorization of the Prime Chinese Bank(s) in documentation reasonably satisfactory to the Company, for use at the Mount Hope Project.

 

“LIBOR”:  With respect to any Interest Period, (a) the applicable British Bankers Association Interest Settlement Rate for deposits in Dollars for a six-month period as published in The Wall Street Journal on the first day of such Interest Period, applicable or (b) if the rate cannot be determined under clause (a), the arithmetic mean (rounded upwards, if necessary, to the nearest four decimal places) of the respective rates quoted by at least two leading banks selected by Lender offered to leading banks for deposits in Dollars for a six-month period in the London interbank market at or about 11:00 a.m. (London, England time) on the first day of such Interest Period.

 

Sched. A-2

 

“Material Adverse Effect”:  As defined in Section 5.1(a).

 

“Maturity Date”:  As defined in Section 3.1(a).

 

“Maximum Rate”:  As defined in Section 2.3(d).

 

“Mount Hope Free Net Cash Flow”:  The Company’s remaining free cash flow from the Mount Hope Project available after all payments required and paid to the Prime Chinese Bank(s) under the Bank Loan Facility.

 

“Mount Hope Project”:  The primary molybdenum property located in Eureka County, Nevada, U.S.A.

 

“Nevada Moly”: Nevada Moly, LLC, a Delaware limited liability company.

 

“New York City”:  New York, New York, U.S.A.

 

“New York Courts”:  As defined in Section 9.15.

 

“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document.

 

“Payment Date”:  As defined in Section 3.1(a).

 

“Permitted Junior Securities” means (a) capital stock of or other ownership or profit interests in the Company which do not provide for mandatory repurchase, redemption, defeasance or other retirement of such securities in cash or any other mandatory payment or distribution in respect thereof in cash prior to the payment in full of the Senior Debt; or (b) debt securities that are subordinated to the Senior Debt (and any debt securities issued in exchange for Senior Debt) to at least the same extent as the Subordinated Debt is subordinated to the Senior Debt hereunder.

 

“Person”:  Any individual, firm, corporation, partnership, limited liability company, trust, joint venture, or other entity.

 

“Pledge Agreement”: A pledge agreement between Nevada Moly and Lender to pledge Nevada Moly’s eighty percent interest in Eureka Moly as security for the Facilities, in a form reasonably agreed by the Company and Lender.

 

“POS-Minerals”: POS-Minerals Corporation, a Delaware corporation.

 

“Prime Chinese Bank(s)”:  One or more of the following:  (a) China Development Bank, (b) the Export-Import Bank of China, (c) Bank of China, (d) China Construction Bank, (e) Industrial and Commercial Bank of China and (f) Agricultural Bank of China.

 

“Representative” means the trustee, agent or representative for the Senior Debt.

 

Sched. A-3

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Reports”:  means (i) the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “10-K”), and (ii) the other reports on Form 10-Q, as amended, and Form 8-K filed by the Company with the SEC since December 31, 2010.

 

“Security Documents”: A security agreement, mortgage and/or such other documents, as agreed by the Company and Lender in good faith to be reasonably necessary to create Lender’s security interest in assets of the Company other than its interest in Eureka Moly.

 

“Senior Debt” means indebtedness incurred pursuant to the Bank Loan Facility, including the principal of, premium, if any, interest (including interest, to the extent allowable, accruing subsequent to the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy Law, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding) expenses, reimbursement amounts, indemnities and other amounts accrued or due on or in connection such Term Loan, whether outstanding on the date of this Agreement or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing).

 

“Signing Date”:  As defined in the Preamble.

 

“Stockholder Agreement”:  The Stockholder Agreement, dated as of December 20, 2010, between the Company and Lender, as amended.

 

“Subordinated Debt” means all obligations of the Company now or hereafter existing under or in connection with this Agreement and any evidence of indebtedness issued pursuant to this Agreement (whether created directly or acquired by assignment or otherwise), whether for principal, interest (including interest, to the extent allowable, accruing subsequent to the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy Law, whether or not a claim for post-petition interest is allowable as a claim in any such proceeding), fees, costs, expenses, indemnities or otherwise, including amounts payable in respect of any breach of a representation or warranty.

 

“Subsidiary” means collectively Nevada Moly, LLC, Eureka Moly, LLC, Liberty Moly, LLC and Kobeh Valley Ranch, LLC.

 

“Tax”:  Any present or future tax, levy, impost, duty, deduction or similar charge or withholding imposed by any Governmental Authority, including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same.

 

“Third Party Lender”:  As defined in Section 2.1(c).

 

“Tranche A Facility Availability Period”:  The period beginning on the date when both (a) construction has begun at the Mount Hope Project and (b) the Company has drawn in full the US$665 million available to it under its term loan with the China Development Bank and related lenders, and ending on the start of Commercial Production.

 

Sched. A-4

 

“Tranche A Facility”:  As defined in Section 2.1(a).

 

“Tranche A Commitment”:  As defined in Section 2.1(a).

 

“Tranche B Facility Availability Period”:  The period beginning on the date that Commercial Production starts and ending six months after such date.

 

“Tranche B Facility”:  As defined in Section 2.1(b).

 

“Tranche B Commitment”:  As defined in Section 2.1(b).

 

“Transaction Document”:  This Agreement, the Security Documents, the Pledge Agreement, the Warrant, the Stockholder Agreement, and each of the other documents as may be entered into in connection herewith.

 

“United States” or “U.S.” or “U.S.A.”:  The United States of America.

 

“US$”:  Dollars.

 

“Warrant”:  As defined in the Recitals.

 

The defined terms in this Agreement are subject to the provisions of Section 9.4.

 

Sched. A-5

 

EXHIBIT A
 (to Subordinated Loan Agreement)

 

Form of Borrowing Request

 

This form is subject to Section 9.4

 

Date:                        ,               

 

To:                             [                                                      ], Lender

 

Ladies and Gentlemen:

 

Reference is made to the Subordinated Loan Agreement, dated as of [                             ], 2012 (as amended, supplemented or otherwise modified from time to time, the “Subordinated Loan Agreement”), between the Company and Lender.  Unless otherwise defined herein, terms defined in the Subordinated Loan Agreement and used herein shall have the meanings given to them in the Subordinated Loan Agreement.

 

The Company hereby requests a borrowing under the Applicable Facility, as follows:

 

	
1.
    	
Applicable   Facility
    	
[specify   Tranche A Facility or Tranche B Facility, as applicable]
    
	
 
    	
 
    	
 
    
	
2.
    	
Borrowing   Date
    	
[a   Business Day during the applicable Availability Period]
    
	
 
    	
 
    	
 
    
	
3.
    	
Principal   Amount Requested
    	
US$[                                  ] [at least   US$5,000,000 (or, if the then Commitment therefor is less than US$5,000,000,   such lesser amount)]
    

 

The proceeds of the requested Facility are to be transferred in accordance with Section 2.2(c) of the Subordinated Loan Agreement as follows:  [specify bank and Funding Account details]

 

The Company hereby confirms that each condition set forth in Section 4.2 of the Subordinated Loan Agreement is satisfied on the date of this Borrowing Request.

 

	
 
    	
Yours   truly,
    
	
 
    	
 
    
	
 
    	
General   Moly, Inc.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
[Authorized   Signatory]
    

 

Exh. A-1

 

EXHIBIT B
 (to Subordinated Loan Agreement)

 

Form of Warrant

 

See attached.

 

Exh. B-1Exhibit 10.2

 

COMMON STOCK PURCHASE WARRANT

 

THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS OTHERWISE DESCRIBED BELOW.

 

THE SECURITIES REPRESENTED BY THIS WARRANT ARE SUBJECT TO A STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 20, 2010, AS AMENDED, COPIES OF WHICH ARE AVAILABLE FROM GENERAL MOLY, INC. UPON REQUEST, AND ANY SALE, PLEDGE, HYPOTHECATION, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO SUCH STOCKHOLDER AGREEMENT.

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (I) SUCH REGISTRATION OR (II) AN EXEMPTION THEREFROM AND, IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Warrant No. HL-1

 

GENERAL MOLY, INC.
  (Incorporated under the laws of the State of Delaware)

 

VOID AFTER 5:00 P.M., DENVER, COLORADO TIME, ON THE THIRTY-MONTH ANNIVERSARY OF THE ISSUANCE DATE (AS DEFINED HEREIN)
 Warrant to Purchase 10,000,000 Shares of Common Stock

 

WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

 

THIS CERTIFIES THAT, FOR VALUE RECEIVED AS OF OCTOBER 26, 2012 (the “Issuance Date”), Hanlong (USA) Mining Investment, Inc. or its registered assign(s) (the “Holder”) is entitled to purchase from General Moly, Inc., a Delaware corporation (the “Company”), subject to the terms and conditions set forth in this Warrant (this “Warrant”), up to ten million (10,000,000) duly authorized, validly issued, fully paid and nonassessable shares of common stock (“Common Stock”), of the Company, at any time commencing on April 26, 2013 (the “Commencement Date”), and expiring at 5:00 p.m., Denver, Colorado time, on the thirty-month anniversary of the Issuance Date or such earlier date as provided in Section 6 below (the “Expiration Time”). The price for each share of Common Stock purchased hereunder (as may be adjusted as set forth herein, collectively the “Warrant Shares”) is $4.23 per share until expiration of this Warrant (as adjusted as set forth herein, the “Purchase Price”).

 

 

The Holder agrees with the Company that this Warrant is issued, and all the rights hereunder shall be held, subject to all of the conditions, limitations and provisions set forth herein.

 

1.             EXERCISE OF WARRANT.

 

A.            MANNER OF EXERCISE. This Warrant may be exercised in whole at any time, or in part from time to time, during the period commencing on the Commencement Date and expiring on the Expiration Time or, if any such day is a day on which banking institutions in the City of Denver, Colorado, are authorized by law to close, then on the next succeeding day that shall not be such a day by presentation and surrender of this Warrant to the Company at its principal office with the Purchase Form attached as Annex I (the “Purchase Form”) duly executed and accompanied by payment (either in cash or by certified or official bank: check, payable to the order of the Company) of the Purchase Price for the number of shares specified in the Purchase Form and instruments of transfer, if appropriate, duly executed by the Holder or its duly authorized attorney.

 

B.            STATUS AS HOLDER OF WARRANT SHARES; TAXES; EXPIRATION. Upon receipt by the Company of this Warrant, the duly executed Purchase Form and any other appropriate instruments of transfer, together with the Exercise Price, at its office, the Holder shall be deemed to be the holder of record of the Warrant Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. The Company shall pay any and all documentary stamp or similar issue taxes payable in respect of the issue or delivery of Warrant Shares. This Warrant shall become void, and all rights hereunder shall cease, at the Expiration Time. The Company in its sole discretion may extend the duration of this Warrant by delaying the Expiration Time.

 

C.            ISSUANCE OF CERTIFICATES. As soon as practicable after the exercise of all or any portion of this Warrant, and in any event within 15 days, the Company shall (i) issue to the Holder a certificate or certificates (as requested by the Holder) for the number of full Warrant Shares to which the Holder is entitled, or, at the Holder’s request, deliver such Warrant Shares electronically if such means is otherwise presently available to and utilized by the Company, registered in such name or names as may be directed by the Holder, and (ii) if this Warrant has not been exercised in full, issue to the Holder a new countersigned warrant in substantially the same form for the Warrant Shares as to which this Warrant shall not have been exercised. This Warrant may not be exercised by, or securities issued to, Holder in any state in which such exercise would be unlawful.

 

2.             RESERVATION OF SHARES; AUTHORITY. The Company will at all times reserve for issuance and delivery upon exercise of this Warrant all Warrant Shares or other shares of capital stock of the Company (and other securities and property) from time to time receivable upon exercise of this Warrant. All such shares (and other securities and property) are duly authorized and, when issued upon such exercise, shall be validly issued, fully paid and nonassessable and free of all preemptive rights, taxes liens or charges.  Neither the issuance of this Warrant nor the issuance of Warrant Shares on a full or partial exercise of this Warrant (i) is

 

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subject to or requires approval of the shareholders of the Company, including any requirement for such approval under the rules of any securities exchange on which the shares of the Company are listed, (ii) is subject to any approval or consent by a governmental authority or regulatory agency, or (iii) violates any agreement to which the Company is a party or by which the Company is bound. Subsequent to the issuance of this Warrant and prior to the Commencement Date, the Company and the Holder agree to cooperate in making any required filing under the Hart-Scott-Rodino Improvements Act of 1976 (“HSR”) and any other applicable regulatory requirements that may be necessary in connection with the exercise of this Warrant.  Filing fees for any HSR filing shall be paid by Holder.  The Company shall cause the Warrant Shares to be listed on such securities exchange upon which shares of Common Stock of the Company are listed at the time of any exercise.

 

3.             NO FRACTIONAL SHARES. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. If the holder of this Warrant would be entitled, upon the exercise of this Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, purchase such fractional interest, on the basis of the Closing Price on the Trading Day before the Purchase Form and this Warrant are duly surrendered to the Company for a full or partial exercise hereof.

 

4.             STOCK DIVIDENDS; SPLIT-UPS. If after the issuance of this Warrant, the Company shall (i) pay a dividend or make any other distribution payable in shares of Common Stock, options or convertible securities or (ii) subdivide its outstanding shares of Common Stock into a greater number of shares by a split-up of shares, recapitalization or other similar event, then, on the effective day thereof, the number of Warrant Shares shall be proportionally increased and the then applicable Purchase Price shall be correspondingly decreased.

 

5.             AGGREGATION OF SHARES. If after the date hereof the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split, or reclassification of shares of Common Stock or other similar event, then, after the effective date of such consolidation, combination or reclassification, the number of Warrant Shares shall be decreased in proportion to such decrease in outstanding shares and the then applicable Purchase Price shall be correspondingly increased.

 

6.             REORGANIZATION, ETC. If after the date hereof there is a capital reorganization (other than a stock dividend or split up as covered by Section 4 or an aggregation of shares as covered by Section 5), reclassification of the Common Stock, consolidation or merger of the Company with another corporation or entity, sale of all or substantially all of the Company’s assets or similar transaction in which the holders of the Company’s Common Stock are entitled to receive stock, securities or assets with respect to or in exchange for Common Stock,(each such event a “Fundamental Change”), this Warrant shall, immediately after the Fundamental Change, remain outstanding and shall thereafter (unless Holder elects otherwise), in lieu of or in addition to (as the case may be) the number of Warrant Shares then subject to this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets to which the Holder would have been entitled if the Holder had exercised this Warrant in full immediately

 

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prior to such Fundamental Change In the event that the stock, securities or assets being issued with respect to or in exchange for Common Stock are being issued by a person or entity other than the Company, the Company shall, as a condition to such Fundamental Change, obtain the agreement of the other person or entity to be bound by the terms of this Warrant and provide Holder an Event Notice of the Fundamental Change in accordance with the requirements of Section 15 below.

 

7.             FORM OF WARRANT. This Warrant need not be changed because of any adjustment pursuant to the terms herein, and any form of warrant issued after such adjustment may state the same Purchase Price and the same number of shares as is stated in this Warrant. However, the Company may at any time in its sole discretion make any change in the form of this Warrant that the Company may deem appropriate and that does not affect the substance thereof or adversely affect the rights of Holder hereunder, and any warrant thereafter issued, whether in exchange or substitution for this Warrant or otherwise, may be in the form as so changed. The Company agrees to promptly notify the Holder of any adjustment to the number of shares, securities or other assets subject to this Warrant or the Purchase Price of the Warrant, any changes to the form of this Warrant or any other change pursuant to the terms herein and to provide Holder with a statement of such changes at the request of the Holder.  Each such notification or statement shall be accompanied by a certificate of an executive officer of the Company setting forth in reasonable detail such adjustment(s) and the facts upon which it is based and certifying the calculation thereof.

 

8.             SECURITIES ACT REPRESENTATIONS.

 

A.            Holder represents and warrants that this Warrant is being acquired for its own account and not with a view to, or for sale in connection with, any distribution thereof or in violation of the 1933 Act or any other securities laws that may be applicable.

 

B.            Holder acknowledges that no oral or written statements or representations have been made to Holder by or on behalf of the Company in connection with the issuance of this Warrant other than those set forth herein.

 

C.            Holder is (i) an “accredited investor” within the meaning of Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the 1933 Act or (ii) an “institutional buyer” as defined in Rule 144A under the 1933 Act.

 

D.            Holder, either alone or with the assistance of its professional advisors, is a sophisticated investor and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the transactions contemplated by this Warrant.

 

9.             REGISTRATION  RIGHTS.

 

A.            If the Company receives from Holder on one or more occasions a written request that the Company file a registration statement with the SEC to effect the registration of the

 

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Warrant Shares or other shares of capital stock of the Company (and other securities and property) from time to time receivable upon exercise of this Warrant (collectively, the “Registrable Securities”) under the Securities Act, (such registration statement and the prospectus included therein being referred to as the “Registration Statement”) for a public offering of the Registrable Securities the aggregate price of which would exceed $10,000,000, the Company shall use commercially reasonable efforts to cause such Registrable Securities to be registered on a Registration Statement and to cause such Registrable Securities to be qualified in such jurisdictions as Holder may reasonably request, in each case within 30 days after receipt by the Company of any such written request.  Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 9A:

 

(a)           During the period starting with the date 60 days prior to the Company’s estimated date of filing of, and ending on the date 90 days immediately following the first effective date of, any registration statement pertaining to an offering by the Company of securities for cash (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; and provided further that nothing in this Section 9A shall affect or hinder Holder’s right to cause the Company to include Registrable Securities as part of the registration of any such Company offering;

 

(b)           If, during the previous 12 months, the Company has effected two Registration Statements pursuant to this Section 9A; provided that amendments or supplements to, and documents or reports incorporated by reference in, a Registration Statement are deemed to be part of the same Registration Statement; or

 

(c)           If the Company shall furnish to Holder a certificate signed by a duly authorized officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company and after consultation with counsel, the filing of the Registration Statement would reasonably be expected to have a material adverse effect on any proposal or plan by the Company or its Subsidiaries to engage in any acquisition of assets other than in the ordinary course or any merger, consolidation, tender offer, reorganization or similar transaction, in which case the Company’s obligation to use its commercially reasonable efforts to file a Registration Statement shall be deferred for a period not to exceed 90 days from the receipt of the request to file such registration by Holder, provided that the Company may not exercise this deferral right more than once per 12-month period.

 

If the Registration Statement relates to an underwritten public offering and the underwriter of such proposed offering advises the Company and Holder that, in its opinion, the number of securities requested to be included in the Registration Statement (including securities to be sold by the Company or any other security holder) exceeds the number which can be sold in such offering within an acceptable price range, then the Company shall include in such Registration Statement first the registrable securities required to be registered pursuant to a request under the Securities Purchase Agreement dated November 19, 2007, between GMI and ArcelorMittal, S.A.

 

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(“Arcelor Securities Agreement”), second the Registrable Securities Holder proposes to register, and third any securities the Company or any other security holder proposes to register.

 

B.            In connection with the Registration Statement, the Company shall:

 

(a)           prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement, and such documents and reports to be incorporated by reference into the Registration Statement, as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities;

 

(b)           furnish to Holder such number of Registration Statements and prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as Holder may from time to time reasonably request;

 

(c)           promptly furnish to Holder copies of any comments that the SEC provides in writing to the Company pertaining to a Registration Statement, and any responses thereto from the Company to the SEC;

 

(d)           promptly provide notice to Holder when a Registration Statement or any post-effective amendment thereto the same has become effective;

 

(e)           use its commercially reasonable efforts to qualify the Registrable Securities for offer and sale under such other securities or blue sky laws of such jurisdictions in the United States as Holder reasonably requests;

 

(f)            use its commercially reasonable efforts to cause all  such Registrable Securities to be listed on NYSE exchange and the Toronto Stock Exchange or any other applicable securities exchange or quoted on each inter-dealer quotation system on which the Common Stock is then listed or quoted;

 

(g)           pay all expenses incurred in connection with such registration, including registration and filing fees with the SEC, fees and expenses of compliance with securities or blue sky laws and fees and expenses incurred in connection with the listing or quotation of the Registrable Securities; and

 

(h)           enter into customary agreements (including underwriting agreements in customary form) if requested by Holder, including such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements generally with respect to secondary distributions, including customary lock up provisions, indemnification and contribution provisions in favor of the underwriters and customary agreements as to the provision of opinions of counsel and accountants’ letters.

 

(i)            The Company shall use commercially reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable

 

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after filing thereof with the SEC (the date the SEC declares the Registration Statement effective, the “Effective Date”).  The Company shall use commercially reasonable efforts to cause the Registration Statement to continue to be effective until the earlier to occur of (i) six months after the Effective Date, and (ii) the date that Holder has either disposed of or has had the ability to dispose of all Registrable Securities within a single month period pursuant to Rule 144 of the Securities Act (“Effective Period”),  and, during such period, to cause the Registration Statement and the prospectus contained therein to be updated as reasonably deemed necessary by the Company or required by the Securities Act or the Exchange Act to enable Holder to resell the Registrable Securities.

 

C.            If at any time prior to the termination of the Company’s obligations under this Article IV there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to Holder a written notice of such determination and, if within five (5) Business Days after the date of such notice, Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities Holder requests to be registered; provided, however, that, the Company shall not be required to register any Registrable Securities pursuant to this Section 9C that are then eligible for resale within a single month period pursuant to Rule 144 promulgated under the Securities Act or that are the subject of a then effective Registration Statement; provided  further, that it shall be a condition to the inclusion of such Registrable Securities on such registration statement that Holder agrees to the same terms and conditions regarding method of sale applicable to the securities otherwise being sold through such registration.  If such Registration Statement relates to an underwritten public offering and the underwriter of such proposed offering advises the Company and Holder that, in its opinion, the number of securities requested to be included in the Registration Statement (including securities to be sold by Holder or any other security holder) exceeds the number which can be sold in such offering within an acceptable price range, then the Company shall include in such Registration Statement first the registrable securities required to be registered pursuant to a request under the Arcelor Securities Agreement, second the Registrable Securities Holder proposes to register, and third any securities the Company or any other security holder proposes to register.

 

D.            Promptly upon any registration statement filed pursuant to this Section 9 being declared effective by the SEC, the Company will file a related form of final prospectus pursuant to Rule 424(b) promulgated under the Securities Act.

 

E.            Holder agrees to indemnify (to the fullest extent permitted by applicable law) the Company, its officers and directors, each underwriter and selling broker, if any, and each person, if any, who controls the Company (within the meaning of the Securities Act), against liability,

 

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losses, claims, damages, actions or expenses (including, in each case, under the Securities Act or the Exchange Act) arising by reason of any statement contained the Registration Statement, or any amendment or supplement thereto, that Holder provided to the Company in writing explicitly for use in such Registration Statement, being actually or allegedly false or misleading or actually or allegedly omitting to state a material fact necessary to be stated in order that the statements made in such Registration Statement, in the circumstances in which they are made, not be misleading; provided that in no event will the aggregate amount Holder is required to pay pursuant to such indemnification obligations exceed the amount of the net proceeds received by Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.  The Company hereby agrees to indemnify (to the fullest extent permitted by applicable law) Holder, its officers and directors, each underwriter and selling broker, if any, and each person, if any, who controls Holder (within the meaning of Securities Act) against liability, losses, claims, damages, actions or expenses (including, in each case, under the Securities Act or the Exchange Act) arising by reason of (i) any statement (other than a statement provided by Holder as described above) in or incorporated by reference in a registration statement (including any Registration Statement), or any amendment or supplement thereto, being actually or allegedly false or misleading or actually or allegedly omitting to state a material fact necessary to be stated in order that the statements made in or incorporated by reference in such registration statement, in the circumstances in which they are made, not be misleading, or (ii) any actual or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws in connection with a Registration Statement.

 

To the extent a claim for indemnification is unavailable (by reason of public policy or otherwise) or insufficient to hold harmless an indemnified party in respect of any losses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified party as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, was taken or made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any losses shall be deemed to include, subject to the limitations set forth herein, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for herein was available to such party in accordance with its terms.

 

F.             Upon receipt of a notice (a “Suspension Notice”) from the Company, after consultation with counsel, of the happening of any event that makes any statement made in the Registration Statement or related prospectus untrue or which requires the making of any changes in such Registration Statement or prospectus so that they will not contain any untrue statement of

 

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a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading, Holder shall forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until Holder’s receipt of the copies of the supplemented or amended prospectus (which the Company shall use commercially reasonable efforts to prepare and distribute promptly) or until it is advised in writing by the Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the prospectus.  Notwithstanding anything to the contrary in this Warrant, upon the delivery of a Suspension Notice the Company may delay the filing of any required amendment or supplement to the Registration Statement if:  (a) in the good faith and reasonable judgment of the Board of Directors of the Company, after consultation with counsel, disclosure of such amended information could be seriously detrimental to the Company, and the Board of Directors of the Company concludes, as a result, that it is in the best interest of the Company to defer the filing of such amendment or supplement at such time, and (b) the Company furnishes to Holder a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it could be seriously detrimental to the Company for such amendment or supplement to be filed at such time and that it is, therefore, in the best interest of the Company to defer the filing of such amendment or supplement to the Registration Statement; provided, however, that (i) the Company shall have the right to defer such filing for a period of not more than 60 days, (ii) the Company shall not defer its obligation in this manner more than two times during any 12-month period and (iii) the Effective Period shall be extended for the amount of time that the Registration Statement is unavailable due to such a deferral.  The Company shall be permitted to enter stop transfer instructions with the Company’s transfer agent with respect to the Registrable Securities during any period under which a Suspension Notice shall be in effect.

 

G.            As long as Holder owns any Registrable Securities that are not otherwise eligible for sale as contemplated by Rule 144 under the Securities Act, the Company shall use commercially reasonable efforts to file all required reports with the SEC, or otherwise make available “adequate current public information” about itself, within the meaning of Rule 144(c) under the Securities Act, to potentially make available to Holder the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities without registration.  Notwithstanding the foregoing, to the extent that a holder of Registrable Securities may dispose of such Registrable Securities pursuant to a Registration Statement, the Company shall not be liable to any such holder for any breach of the provisions of this Section 9G.

 

10.          TRANSFER OF WARRANTS. Holder understands and agrees that this Warrant and the Warrant Shares have not been registered under the 1933 Act or similar state laws. This Warrant and/or Warrant Shares cannot be sold or transferred unless (i) such transfer is so registered or (ii) an exemption from registration is available at the time of transfer and, if requested by the Company, an opinion of counsel satisfactory to the Company to the effect that such registration is not required is delivered to the Company. Subject to the foregoing limitations, the Company shall register the transfer, from time to time, of this Warrant upon the Company’s warrant register, upon surrender of this Warrant for transfer, accompanied by a duly

 

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executed Assignment Form in the form attached as Annex II, with signatures properly guaranteed as indicated. Upon any such transfer, a new warrant or warrants representing the aggregate number of this Warrant shall be issued and this Warrant shall be cancelled by the Company.

 

A restrictive legend shall be placed upon each share certificate acquired upon exercise of this Warrant in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (I) SUCH REGISTRATION OR (II) AN EXEMPTION THEREFROM AND, IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 20, 2010, AS AMENDED, COPIES OF WHICH ARE AVAILABLE FROM GENERAL MOLY, INC. UPON REQUEST, AND ANY SALE, PLEDGE, HYPOTHECATION, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO SUCH STOCKHOLDER AGREEMENT.

 

The first paragraph of the foregoing legend will be removed from the certificates representing any Warrant Shares, at the request of the holder thereof, at such time as they become the subject of an effective resale registration statement or they become eligible for resale without regard to the volume limitations or other limitations on manner of sale pursuant to Rule 144 under the 1933 Act.

 

The second paragraph of the foregoing legend will be removed from the certificates representing any Warrant Shares, at the request of the holder thereof, at such time as the Stockholder Agreement has terminated or if the Warrant Shares are being issued to a party not subject to the Stockholder Agreement in a manner permitted under the Stockholder Agreement.

 

11.          NO RIGHTS AS STOCKHOLDERS. Except as otherwise specifically provided herein, prior to the exercise of this Warrant in accordance with the terms hereof and payment of the full exercise price therefor, the Holder will not be entitled to any rights by virtue hereof as a stockholder of the Company, including, without limitation, the right to vote or to receive

 

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dividends or other distributions, to exercise any preemptive rights, to consent or to receive notice as stockholders of the Company in respect to the meetings of stockholders or the election of directors of the Company or any other matter.

 

12.          LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If this Warrant is lost, stolen, mutilated, or destroyed, the Company may on such terms as to indemnity or otherwise as it may in its discretion impose (it being understood that a written indemnification agreement or affidavit of loss from the Holder shall be a sufficient indemnity, issue a new warrant of like denomination, tenor, and date. Notwithstanding the forgoing, no indemnification shall be required if a mutilated Warrant is surrendered to the Company for cancellation.  Any such new warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

 

13.          NO IMPAIRMENT.  The Company shall not, by amendment to its certificate of incorporation or bylaws, or through an reorganization, recapitalization, transfer of assets, consolidation, merger dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it under the terms of this Warrant, but shall at all times in good faith assist in the carrying out of the provisions of this Warrant and the taking of all such action as may be reasonable requested by the Holder in order to protect the exercise rights of Holder against dilution of other impairment, consistent with the tenor and purpose of this Warrant.

 

14.          GOVERNING LAW. This Warrant shall be governed by and construed in accordance with the laws of the State of New York without giving effect to conflicts of laws principles that would require the application of the law of another jurisdiction.

 

15.          NOTICES OF CERTAIN ACTIONS. In the event:

 

(a)           the Company sets a record date with respect to the holders of Common Stock for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right;

 

(b)           the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock or by a split-up of shares of Common Stock or other similar event;

 

(c)           the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split, or reclassification of shares of Common Stock or other similar event;

 

(d)           of any Fundamental Change; or

 

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(e)           of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company will provide written notice (an “Event Notice”) to the Holder at least thirty (30) days prior to (i) the record date in the case of (a), (b) or (c) above, specifying the record date and the amount and character of such dividend, distribution or right, and (ii) the effective date of any event specified in clause (d) or (e) above, specifying the effective date on which such event is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock will be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such event, if applicable. Any failure to mail an Event Notice required by this Section 15 or any defect therein or in the mailing thereof will not affect the validity of the corporate action required to be specified in such Event Notice. Nothing herein shall prohibit the Holder from exercising this Warrant during the thirty day period commencing on the date of an Event Notice, provided that such exercise occurs prior to the Expiration Time and the Holder otherwise complies with the terms hereof.

 

16.          MISCELLANEOUS

 

A.            DELIVERY OF NOTICE. Notices and other communications to be given to Holder shall be deemed to have been sufficiently given, if delivered or mailed, addressed in the name and at the address of Holder appearing on the records of the Company, and if mailed, sent registered or certified mail, postage prepaid. Notices or other communications to the Company shall be deemed to have been sufficiently given if delivered by hand or mailed, by registered or certified mail, postage prepaid, to the Company at 1726 Cole Blvd., Suite 115, Lakewood, Colorado 80401, Attn: Chief Executive Officer, or at such other address as the Company shall have designated by written notice to the registered owner as herein provided. Notice by mail shall be deemed given when deposited in the United States mail as herein provided.

 

B.            ENTIRE AGREEMENT. This Warrant embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Warrant shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Warrant.

 

C.            RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. Unless otherwise provided herein, the rights and obligations of the Company and Holder shall survive the exercise of this Warrant.

 

D.            EQUITABLE RELIEF.  The Company and the Holder acknowledge that a breach or threatened breach of any of the obligations under this Warrant would give rise to irreparable harm to the other party for which monetary damages would not be an adequate remedy and hereby agree that in the event of a breach or threatened breach, the aggrieved party shall have the right, in addition to all other rights and remedies, to equitable relief, including a

 

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restraining order, injunction, specific performance or any other relief that may be available to the aggrieved party.

 

E.            SUCCESSORS AND ASSIGNS.  This Warrant and the rights evidenced hereby shall be binding on, and inure to the benefit of, the successors and assigns of the parties.

 

F.             FEES AND EXPENSES. Except as otherwise expressly set forth in this Warrant, each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Warrant and the transactions contemplated hereby.

 

G.            COUNTERPARTS. This Warrant may be executed in counterparts and via facsimile or other similar electronic transmission, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

[The balance of this page intentionally left blank]

 

13

 

SIGNATURE PAGE - COMMON STOCK PURCHASE WARRANT

 

IN WITNESS WHEREOF, the Company and Holder have each caused this Warrant to be duly executed, manually or in facsimile, by the undersigned thereunto duly authorized.

 

	
 
    	
GENERAL   MOLY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bruce D. Hansen
    
	
 
    	
Name:
    	
Bruce   D. Hansen
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HANLONG   (USA) MINING INVESTMENT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nelson Feng Chen
    
	
 
    	
Name:
    	
Nelson   Feng CHEN
    
	
 
    	
Title:
    	
Director
    

 

 

ANNEX I

 

TO COMMON STOCK PURCHASE WARRANT

 

PURCHASE FORM

 

	
To:              
    	
 
    	
 
    	
Dated:              
    

 

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.              ) (the “Warrant”), hereby irrevocably elects to purchase shares of the Common Stock covered by such Warrant.

 

The undersigned herewith makes payment of the full exercise price for such shares at the price per share provided for in such Warrant, which is $              in lawful money of the United States.

 

Capitalized terms used but not defined herein have the meaning assigned to such terms in the Warrant.

 

	
 
    	
[Name]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

ANNEX II

 

TO COMMON STOCK PURCHASE WARRANT

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED,                                               hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant (No.              ) with respect to the number of shares of Common Stock covered thereby set forth below, unto:

 

	
Name of   Assignee
    	
 
    	
Address
    	
 
    	
No. of Shares
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

	
Dated:                                               
    	
 
    

 

	
 
    	
[Name]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Guaranteed:

 

 

	
By:
    	
 
    	
 
    

 

The signature should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.

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