Document:

Exhibit 10.3

 

 

 

July 7, 2016

SILVER BULL RESOURCES, INC.

Suite 1610, 777 Dunsmuir Street

Vancouver, BC V7Y 1K4

Canada

Attention: Tim Barry

                   Chief Executive Officer

Dear Sirs:

Re:            Provision of Placement Agent Services for your Private Placement

This letter (the “Agreement”) confirms the terms on which Sprott Global Resource Investments, Ltd., a California limited partnership (“SGRIL” or the “Placement Agent”), agrees to provide services as a placement agent (the “Services”) in respect of a private placement (the “Placement”) by Silver Bull Resources, Inc. (the “Company”) of up to 3,340,000 units (the “Units”) at a price of C$ 0.15 per Unit for proceeds of up to C$ 501,000.

SGRIL understands that:

	(a)	the common shares of the Company (the “Common Shares”) are listed on the Toronto Stock Exchange (the “Exchange”);

	(b)	each Unit will consist of one Common Share (a “Unit Share”) and one non-transferable share purchase warrant (a “Warrant”) entitling the purchase of one Common Share (a “Warrant Share”) for three years from the closing of the Placement (the “Closing”) at a price of C$ 0.16;

	(c)	if, commencing on the fourth month after the Closing, the closing price of the Common Shares on the Exchange is higher than C$ 0.30 for any 20 consecutive trading day period then on the 20th consecutive trading day of any such period (the “Acceleration Trigger Date”) the expiry date of the Warrants may be accelerated to the 20th trading day after the Acceleration Trigger Date by the issuance, within three trading days of the Acceleration Trigger Date, of a news release announcing such acceleration;

	(d)	if, at the time of exercise of the Warrant, the Company is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, of the United States of America (the “Exchange Act”), then the Warrant may be exercised by means of a Cashless Exercise Right in the same manner as the Compensation Warrants (as described and defined below); and

 

 

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	(e)	the Placement is subject to the approval of the Exchange.

The Placement is further described in the attached Term Sheet and any terms set out in the Term Sheet but not in this Agreement shall be incorporated into, and form a part of, this Agreement. In the event of a discrepancy between the terms of this Agreement and the Term Sheet, this Agreement shall govern.

Description of Services

The Services shall include:

	(a)	locating and introducing to the Company potential qualified investors (“Investors”) in the United States of America, its states, territories and possessions, and the District of Columbia (collectively, the “United States”) and outside of the United States and Canada with whom the Placement Agent has pre-existing business relationships and who the Placement Agent reasonably believes are qualified to participate in the Placement who might be willing to purchase Units on an exempt private placement basis;

	(b)	facilitating communication between the Company and the Investors and arranging for the Investors to receive, or directing them where to obtain, corporate and business related information of the Company from the Company’s website, SEDAR and EDGAR; 

	(c)	introducing the Investors to the Company’s management and, if requested, assisting the Investors in completing a subscription agreement in the form provided by the Company to SGRIL for the Placement (“Subscription Agreement”); and

	(d)	gathering and forwarding the completed Subscription Agreements and the funds therefor to the Company to hold such funds, in trust, pending the Closing.

The Placement Agent shall provide the Services in compliance with all applicable laws and regulations. The Company shall be under no obligation to accept subscriptions for Units from all or any of the Investors introduced by the Placement Agent.

Relationship between the Parties

The Company acknowledges and confirms that:

	(a)	the Placement Agent shall not have any liability to the Company if it is unable to locate any, or a sufficient number of, purchasers for the Placement;

	(b)	there is no agreement, commitment, arrangement or understanding pursuant to which the Placement Agent will act as advisor in respect of the Placement or in respect of a subsequent offering of securities of the Company; and

	(c)	the Placement Agent shall not bear any responsibility or assume any liability for any statements made by the Company to the Investors in connection with the Placement, including the accuracy of any representations made by the Company to any Investors in the Subscription Agreements provided by the Company.

 

 

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Placement Agent’s Fee and Expenses

In consideration of the Services, the Placement Agent will, in respect of Units purchased by Investors introduced by, or whose subscriptions are attributable to the efforts of, the Placement Agent (excluding any Units that may be purchased by the Placement Agent), be:

	(a)	paid a fee equal to 6.0% of the proceeds from such Units; and

	(b)	issued that number of non-transferable warrants (“Compensation Warrants”) as is equal to 6.0% of the number of such Units, each Compensation Warrant entitling the Placement Agent to purchase, for two years from the Closing and subject to the same acceleration provisions as the Warrants, one Warrant Share at a price equal to the greater of C$ 0.15 and the five day volume weighted average trading price preceding notice of the Placement to the Exchange.

(collectively, the “Placement Agent’s Fee”)

For the avoidance of doubt, the Placement Agent will not be entitled to any Placement Agent’s Fee in connection with a subscription from any Investor not introduced to the Company by the Placement Agent.  As of the date hereof, the Company anticipates that one investor not introduced to the Company by the Placement Agent will participate in the Placement, which investor is an entity organized in the British Virgin Islands.  The Placement Agent acknowledges that the payment of the Placement Agent’s Fee is subject to the approval of the Exchange.

The Placement Agent’s Fee will be paid, issued and delivered on or promptly after the Closing as directed in writing or e-mail by the Placement Agent.

If, at the time of exercise of the Compensation Warrant, the Company is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, then the Compensation Warrant may be exercised by means of a “cashless exercise” (the “Cashless Exercise Right”) whereby the Placement Agent shall be entitled to receive that number of Warrant Shares resulting from the following formula:

Where:

		A =	the average closing price for the Common Shares as quoted on the Exchange for the five consecutive trading days immediately preceding the date on which the Placement Agent elects to exercise the Compensation Warrant by means of the Cashless Exercise Right.

		B =	the then applicable exercise price of the Compensation Warrant.

		X =	the number of Warrant Shares that would otherwise have been issuable had the Placement Agent elected to exercise the Compensation Warrant by means of a cash exercise.

Conduct of the Services

The Placement Agent acknowledges that the Units, Unit Shares, Warrants, Compensation Warrants and Warrant Shares have not been, and will not be, registered under the Securities Act of 1933, as amended, of the United States (the “1933 Act”) or applicable state securities laws and may only be offered and sold in transactions not subject to, or pursuant to exemptions from, the registration requirements of the 1933 Act (and applicable state securities law). Accordingly, SGRIL shall restrict the Services to the location, identification and introduction to the Company of Investors who are:

 

 

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	(a)	(i) resident in the United States, or a “U.S. person” (as defined in Rule 902(k) of Regulation S (“Regulation S”) under the 1933 Act; “U.S. Person”), (ii) purchasing for the account or benefit of a U.S. Person or person in the United States, or (iii) in the United States when they receive the initial offer of, or subscribe for, the Units, and SGRIL has reason to believe the Investors are in the United States, and each of such Investors in (i), (ii) and (iii) (collectively, “U.S. Purchasers”) is an “accredited investor” (as defined in Rule 501(a) of Regulation D (“Regulation D”) under the 1933 Act; an “Accredited Investor”) but the term “U.S. Purchasers” does not include persons excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(vi) of Regulation S or persons holding accounts excluded from the definition of U.S. Person pursuant to Rule 902(k)(2)(i) of Regulation S, solely in their capacities as holders of such accounts; or

	(b)	outside of the United States and Canada, are not U.S. Purchasers and are able to purchase such securities in an “offshore transaction” (as such term is defined in Rule 902(h) of Regulation S; “Offshore Transaction”) in accordance with Rule 903 of Regulation S and applicable local securities laws (“Offshore Purchasers”).

Placement Agent’s Representations, Warranties and Covenants

The Placement Agent represents and warrants to, and covenants with, the Company that:

	(a)	it is a validly created limited partnership with its head office at the address set out on the first page hereof;

	(b)	the execution and delivery of and performance by the Placement Agent of this Agreement have been authorized by all necessary actions on the part of the Placement Agent;

	(c)	this Agreement has been duly executed and delivered by the Placement Agent, and constitutes a legal, valid and binding agreement of the Placement Agent enforceable against it in accordance with its terms;

	(d)	the execution and delivery of and performance by the Placement Agent of this Agreement do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other event of condition) result in a breach or violation of or a conflict with, or allow any other person to exercise any rights under any of the terms or provisions of the Placement Agent’s constating documents or by-laws, if applicable, or any other contract, agreement, instrument, undertaking or covenant to which the Placement Agent is a party or by which it is bound;

	(e)	it is, and during the course of the Placement it will remain, duly registered, and in good standing, as a broker-dealer with the United States Securities and Exchange Commission (the “SEC”) under the Exchange Act and applicable securities legislation in all states and other jurisdictions in the United States in which it is carrying out activities in connection with the Services and is, and during the course of the Placement will remain, a member in good standing with the Financial Industry Regulatory Authority, Inc. (“FINRA”);

	(f)	none of the Placement Agent, any general partner or managing member, any director or executive officer of any of the foregoing, any other officer of any of the foregoing participating in the Placement, or any officer or other employee of the foregoing that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in the Placement are subject to any Disqualifying Event. For the purposes hereof, “Disqualifying Event” means any conviction, order, judgment, decree, suspension, expulsion, event or other matter set out in Rule 506(d)(1)(i) through (viii) of Regulation D that is currently in effect or which occurred within the periods set out in Rule 506(d)(1)(i) through (viii) and, without limiting the foregoing, includes criminal convictions, court injunctions or restraining orders, final orders of any state or federal regulator, SEC disciplinary orders, SEC cease-and-desist orders, SEC stop orders or orders suspending the Regulation A exemption, suspension or expulsion from membership in, or association with a member of, a self-regulatory organization (such as FINRA) or United States Postal Service false representation orders;

 

 

 

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(g)

	
it has had and shall maintain all business and professional licenses, registrations and permits necessary or appropriate, and agrees to obtain and maintain any such license, registration or permit that may hereafter become necessary or appropriate, under all applicable laws and regulations, and shall otherwise comply with all applicable laws and regulations to complete the Services;

	
(h)

	
it is neither an insider nor an affiliate of an insider of the Company through ownership of 10% or more of the outstanding Common Shares, on a partially diluted basis, and is arm’s length to the Company;

	
(i)

	
it shall make introductions only to Investors who SGRIL reasonably believes are qualified to participate in the Placement and are

	 	
(i)

	
U.S. Purchasers that SGRIL has a reasonable basis to believe, and does reasonably believe, are Accredited Investors and with whom SGRIL has pre-existing business relationships, or

	 	
(ii)

	
Offshore Purchasers, who will purchase the Units in an Offshore Transaction in accordance with Rule 903 of Regulation S and applicable local securities laws;

	
(j)

	
it shall carry out the Services in such a manner that

 

	 	
(i)

	
the exemptions from registration for the offer and sale of the securities in the Placement to U.S. Purchasers under Rule 506(b) of Regulation D and any applicable state securities laws (including the exemption from registration under applicable state securities laws provided by section 18(b)(4)(E) of the 1933 Act) or any order, rule or regulation promulgated thereunder are available,

	 	
(ii)

	
the exclusions from registration for the offer and sale of the securities in the Placement outside the United States to purchasers other than U.S. Purchasers are available under Regulation S, and

	 	
(iii)

	
complies with all applicable United States federal and state broker-dealer requirements and the laws of any other jurisdiction in which the Services may be carried out;

	
(k)

	
it has not and shall not offer or sell the Units in any manner constituting a “public offering”, as that term is used in section 4(a)(2) of the 1933 Act (a “US Public Offering”);

	
(l)

	
it has not and shall not

 

 

 

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(i)

	
offer to sell, or solicit an offer to buy, Units to, or for the account or benefit of, any U.S. Person or person in the United States, except as provided in this Agreement, or otherwise engage in or use any “general solicitation” or “general advertising” as such terms are used in Rule 502(c) of Regulation D (“General Solicitation or General Advertising”) such as any advertisement, article, notice, or other public communication mentioning the Placement, the Company or the Company’s securities nor in any manner involving a US Public Offering,

	 	
(ii)

	
publish in any newspaper, magazine or similar medium or on the Internet or broadcast over television, radio or the Internet any information regarding the Company, its securities or the Placement,

	 	
(iii)

	
host or participate in any seminar or meeting regarding the Placement whose attendees have been invited by General Solicitation or General Advertising, or

	 	
(iv)

	
take any other action that would be reasonably expected to result in the Placement not being exempt from registration under the 1933 Act or applicable state securities laws;

	
(m)

	
it has not made or engaged nor shall it make or engage in any Directed Selling Efforts in the United States regarding the Company, its securities or the Placement where “Directed Selling Efforts” means directed selling efforts as that term is defined in Rule 902(c) of Regulation S and which, in general terms involves, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose, or that could reasonably be expected to have the effect, of conditioning the market in the United States for any of the Units, Unit Shares, Warrants, Compensation Warrants or Warrant Shares, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the Internet, or broadcast over radio, television or the Internet that refers to the Placement;

	
(n)

	
it has not made and will not make any

	 	
(i)

	
representations concerning the Company or the Placement not authorized by the Company in writing, or

	 	
(ii)

	
untrue statement of a material fact concerning the Company nor omit to state a material fact required to be stated or necessary to make any statement not misleading concerning the Company;

	
(o)

	
it is both an Accredited Investor and an “accredited investor” as defined in National Instrument 45-106 Prospectus Exemptions of the Canadian Securities Administrators and it will be acquiring the Units the Compensation Warrants as principal for its own account, for investment purposes only, and not for the benefit of any other person nor with a view to distribution or transfer in violation of the 1933 Act or applicable state securities laws; and

	
(p)

	
it will execute and return to the Company all documents which may be required by applicable securities laws and the policies of the Exchange in connection with the Placement or this Agreement.

 

All representations and warranties contained herein are accurate as of the date hereof and will be accurate as of the date of the Closing.

 

 

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Company’s Representations, Warranties and Covenants

The Company represents and warrants to, and covenants with, the Placement Agent that:

	(a)	it is a “domestic issuer”, as defined in Rule 902 of the 1933 Act;

	(b)	except with respect to offers and sales to U.S. Purchasers made in reliance upon the exemption from registration under Rule 506(b) of Regulation D, neither it nor, to the Company’s knowledge, any person acting on its behalf (other than the Placement Agent or any finder, for which no representation or warranty is made), has made or will make any

		(i)	offer to sell, or any solicitation of an offer to buy, any Units to a U.S. Purchaser, or

		(ii)	sale of Units unless, at the time the buy order was or will have been originated

		(1)	the purchaser is not a U.S. Purchaser, or; 

		(2)	the Company and any person acting on its behalf reasonably believes that the purchaser is not a U.S. Purchaser; 

	(c)	neither it nor, to the Company’s knowledge, any person acting on its behalf (other than the Placement Agent or any finder, for which no representation or warranty is made) has, during the period beginning six months before the commencement of the Placement, or will, for the six months after the Closing, offer, sell or solicit any offer to buy any of its securities in a manner that would be integrated with the Placement and thereby cause the exemptions from registration set forth in Rule 506(b) of Regulation D or Rule 903 of Regulation S of the 1933 Act to become unavailable for the Placement, including engaging in any of the following activities in connection with any offer or sale of the Company’s securities that would be integrated with the Placement

		(i)	any Directed Selling Efforts,

		(ii)	any form of General Solicitation or General Advertising, or holding or participating in any seminar or meeting whose attendees have been invited by General Solicitation or General Advertising including, without limitation, advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or on the Internet, or broadcast over radio, television or the Internet or any seminar or meeting whose attendees have been invited by General Solicitation or General Advertising, or

		(iii)	acting in any manner that would constitute a US Public Offering;

	(d)	neither the Company nor any of its predecessors or affiliates, have been subject to any order, judgment or decree of any court of competent jurisdiction temporarily, preliminarily or permanently enjoining such person for failing to comply with the provisions of Rule 503 of Regulation D;

	(e)	to the best of the Company’s knowledge after reasonable investigation, none of the Company (including its predecessors or affiliated issuers), any director or executive officer, any non-executive officer participating in the Placement, any shareholder holding or controlling 20% or more of the Common Shares, any current promoter of the Company or any person (other than the Placement Agent, any finder and any person set out in paragraph (f) of the Placement Agent’s representations, warranties and covenants above, for which no representation or warranty is made) that has been or will be paid (directly or indirectly) for the solicitation of purchasers in the Placement (a “Compensated Solicitor”) and any general partner or managing member of any Compensated Solicitor or any executive officer, non-executive officer participating in the Placement, or director of any Compensated Solicitor or general partner or managing member of such Compensated Solicitor is subject to a Disqualifying Event;

 

 

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	(f)	it is not now, and as a result of the sale of Units contemplated hereby will not be, required to be registered as an “investment company” as defined in the Investment Company Act of 1940, as amended, of the United States; and

	(g)	all representations and warranties made by it in the Subscription Agreement are incorporated by reference herein and made to and for the benefit of the Placement Agent.

All representations and warranties contained herein are accurate as of the date hereof and will be accurate as of the date of the Closing.

Conditions of Closing

It shall be a condition precedent to the Closing, as it relates to Investors introduced by the Placement Agent, that:

	(a)	the Company shall

		(i)	prepare forms of the Subscription Agreement, the Warrant and Compensation Warrant certificates and any indentures and other agreements required in connection with the Placement, in consultation with the Placement Agent and its legal counsel, and

		(ii)	deliver to the Placement Agent a certificate of an executive officer of the Company regarding various factual matters, in a form reasonably acceptable to the Placement Agent and its legal counsel;

	(b)	the Placement Agent will provide a certificate, substantially in the form attached hereto, relating to the conduct of the Placement by it in the United States and to, and for the benefit of, the Company;

	(c)	the U.S. Purchasers and Offshore Purchasers will have each provided a fully completed and duly executed Subscription Agreement and any other certificates contemplated therein; and

	(d)	the Exchange shall have approved the Placement in respect of the subscriptions from Investors introduced by the Placement Agent.

Resale Restrictions and Legend Removal

The Placement Agent acknowledges that the Unit Shares, Warrants, Compensation Warrants and Warrant Shares will be:

	(a)	“restricted securities” under the 1933 Act and the certificates representing such securities shall bear a restrictive legend to the effect that they have not been registered under the 1933 Act or state securities laws and can only be offered, resold or otherwise transferred (and with respect to any Warrants, exercised) under certain conditions (“U.S. Legend”); and

 

 

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	(b)	subject to a four month restricted re-sale period in Canada and the certificates representing such securities shall bear a legend to that effect as required by National Instrument 45-102 Resale of Securities of the Canadian Securities Administrators (the “NI 45-102 Legend”).

The Placement Agent further acknowledges that the certificates representing such securities shall also bear the legend required by the Exchange (the “Exchange Legend”).

Commencing after four months from the Closing, the Company will promptly approve any requests to remove and use commercially reasonable efforts to cause the prompt removal of the NI 45-102 Legend and Exchange Legend from certificates evidencing the Unit Shares and Warrant Shares held by U.S. Purchasers, Offshore Purchasers and the Placement Agent.

In the case of a sale of the Warrant Shares by the Placement Agent made pursuant to either (A) the provisions of Rule 144 of the 1933 Act; or (B) an effective registration statement under the 1933 Act, the Company shall, at the Company’s own cost, use commercially reasonable efforts to cause the transfer agent to remove the U.S. Legend and deliver unlegended share certificates to the Placement Agent within three trading days following the delivery by the Placement Agent to the Company or the Company’s transfer agent of a share certificate endorsed with the U.S. Legend.  If the Company’s transfer agent fails to deliver an unlegended share certificate within such three trading day period, the Company will indemnify the Placement Agent (other than U.S. Investors that are (i) brokers employed by the Placement Agent or its affiliates or (ii) one of the Exploration Capital Limited Partnerships managed by the Placement Agent or its affiliates) for any damages and costs incurred as a result thereof, but: (i) such indemnity shall not extend to any lost profits of the Placement Agent; and (ii) the aggregate amount of such indemnity in respect of any one legend removal shall not exceed US$ 5,000. For the avoidance of doubt, if, in the case of a sale pursuant to, and subject to satisfaction of the conditions required by, (A) or (B) above, the Company or the Company’s transfer agent requires a legal opinion to remove the US Legend from any certificates representing the Warrant Shares, the Company shall use commercially reasonable efforts to cause its legal counsel to deliver such legal opinion at the Company’s expense.

“Piggyback” Registration Rights

If, at any time before the first anniversary of the expiry of the Compensation Warrants, the Company determines to prepare and file with the SEC a registration statement relating to an offering for the Company’s own account or the account of others under the 1933 Act of any of its equity securities, other than a registration statement on Form S-4 or Form S-8 (each as promulgated under the 1933 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 Company’s stock option or other employee benefit plans, then the Company shall deliver to the Placement Agent a written notice of such determination and, if within 15 days after the date of the delivery of such notice, the Placement Agent shall so request in writing, the Company shall include in such registration statement all or any part of the Warrant Shares issued or issuable to the Placement Agent (and any securities issued or then issuable upon any stock split, dividend or other distribution, capitalization or similar event with respect to the foregoing) (collectively, the “Registrable Securities”) that the Placement Agent requests to be registered, but the Company shall not be required to register any Registrable Securities that (i) are eligible for resale pursuant to Rule 144 of the 1933 Act, and (ii) would continue to be eligible for resale pursuant to Rule 144 of the 1933 Act if the Company ceased to comply with the current information requirements of Rule 144(c).  For the avoidance of doubt, the Investors will not receive, pursuant to the Placement, the Subscription Agreements or this Agreement, any demand registration rights that would otherwise entitle the Investors to require the Company to file a registration statement registering their securities.

 

 

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Indemnification

Except for indemnification relating to the failure to deliver an unlegended share certificate as provided in the last paragraph under “Resale Restrictions and Legend Removal” above, the Company shall indemnify the Placement Agent against any liabilities arising hereunder as set out on the attached Indemnity.

Termination by the Placement Agent

Without restricting any other rights in this Agreement and in addition to any other remedies which may be available to the Placement Agent in respect of any default, act or failure to act, or non-compliance with the terms of this Agreement by the Company, the Placement Agent shall be entitled to terminate and cancel, at its option and without any liability on its part, all of its obligations under this Agreement, by giving written notice to the Company at any time at or prior to the Closing, if:

	(a)	any inquiry, investigation or other proceeding (whether formal or informal) is commenced, announced or threatened, or any order or ruling is issued by any exchange or market, or any other regulatory or governmental authority (other than an inquiry, investigation or other proceeding based solely on the activities of the Placement Agent in connection with the Placement) which, in the opinion of the Placement Agent, would reasonably be expected to materially and adversely affect the Company or its business, on a consolidated basis, or its securities;

	(b)	any law or regulation or moratorium, inquiry, investigation, proceeding, order, ruling, pursuant to any statute is promulgated or changed which, in the reasonable opinion of the Placement Agent

		(i)	operates to prevent or materially restrict the distribution of the Units or the trading of the Common Shares,

		(ii)	would reasonably be expected to materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares or the Units, or

		(iii)	would reasonably be expected to materially impair the Company’s ability to perform the obligations contemplated in this Agreement;

	(c)	in the reasonable opinion of the Placement Agent, there occurs or is discovered a material change or a change in any material fact or a new material fact arises that would reasonably be expected to

		(i)	materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares or the Units, or

		(ii)	materially impair the Company’s ability to perform the obligations contemplated in this Agreement;

	(d)	there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence, including without limiting the generality of the foregoing, any military conflict, civil insurrection, or any terrorist action (whether or not in connection with such conflict or insurrection), or any law or regulation which, in the reasonable opinion of the Placement Agent, materially and adversely affects or involves, or will materially adversely affect or involve, the Canadian or United States financial markets, or prevent or materially restrict the trading of the Common Shares or the distribution of the Units or may materially and adversely affect the Company, its business or its securities, including the market price or value of the Common Shares, or which could materially impair the Company’s ability to perform the obligations contemplated in this Agreement;

 

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	(e)	the state of the financial markets is such that in the reasonable opinion of the Placement Agent, it would be unprofitable to offer or continue to offer the Units for sale;

	(f)	the Company is in breach of any material term, condition or covenant of this Agreement, or any representation or warranty given by the Company in this Agreement becomes, is discovered to be or is materially false, and such material breach or such materially false representation

		(i)	is in the reasonable opinion of the Placement Agent not capable of being cured prior to the Closing,

		(ii)	would result in the failure of any condition precedent set out in this Agreement, or

		(iii)	has not been rectified to the reasonable satisfaction of the Placement Agent within 48 hours of when the Placement Agent provides notice to the Company of the same; or

	(g)	any order to cease trading in the Company’s securities is made or threatened by a Canadian or United States securities regulator.

Termination by the Company

Without restricting any other rights in this Agreement and in addition to any other remedies which may be available to the Company in respect of any default, act or failure to act, or non-compliance with the terms of this Agreement by the Placement Agent, the Company shall be entitled to terminate and cancel, at its option and without any liability on its part, all of its obligations under this Agreement, by giving written notice to the Placement Agent at any time at or prior to the Closing, if:

	(a)	any inquiry, investigation or other proceeding (whether formal or informal) is commenced or announced, or any order or ruling is issued by any exchange or market, or any other regulatory or governmental authority based solely on the activities of the Placement Agent in connection with the Placement;

	(b)	the Placement Agent is in material breach of any term, condition or covenant of this Agreement, or any representation or warranty given by the Placement Agent in this Agreement becomes, is discovered to be or is materially false, and such material breach or such materially false representation

		(i)	is in the reasonable opinion of the Company not capable of being cured prior to the Closing,

		(ii)	would result in the failure of any condition precedent set out in this Agreement, or

		(iii)	has not been rectified to the reasonable satisfaction of the Company within two business days of when the Company provides notice to the Placement Agent of the same.

General Provisions

Survival of Representations and Warranties: The representations, warranties and covenants of the Company and Placement Agent will survive the Closing for a period of one year.

 

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Public Disclosure: The Company may make public disclosure of this Agreement and the Placement, and the Placement Agent consents to the filing by the Company of all documents and personal information concerning the Placement Agent provided in this Agreement required by applicable securities laws and the policies of the Exchange.

Regulatory Filings: The Company shall make all filings with respect to the Placement required to be made by the Company with the Exchange and with all applicable securities regulatory authorities in the United States and Canada and, in connection with Offshore Transactions, with any other regulatory authorities, each within the prescribed time limits and provide SGRIL with copies of all such filings and all receipts, acknowledgments and approvals from such regulatory authorities. SGRIL shall make all filings with respect to the Placement required to be made by SGRIL with FINRA and the SEC within the prescribed time limits and provide the Company with copies of all such filings and all receipts, acknowledgments and approvals from such regulatory authorities. The Company and the Placement Agent shall provide all information required by the other in order to make such filings.

Notices: Any notice under this Agreement will be given in writing and must be delivered or sent by facsimile or electronic communication (provided, if sent electronically, confirmation of delivery is received by the sender) and addressed to the party to which notice is to be given at the address of the party provided on the first page of this Agreement or such other address designated by the party in writing.

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of British Columbia and the laws of Canada applicable therein.

Effective Date: Notwithstanding the date of this Agreement or the date on which it was executed, this Agreement shall be effective as between the parties as of July 7, 2016.

Entire Agreement: This Agreement constitutes the entire agreement, and supersedes any prior understandings and agreements, between the parties with respect to its subject matter and there are no representations, warranties, forms, conditions, undertakings or collateral agreements, express implied or statutory between the parties other than as expressly set forth in this Agreement.

No Assignment: This Agreement may not be assigned by either party.

Amendments: This Agreement may be amended in writing with the mutual consent of both parties.

Time of the Essence: Time shall be of the essence of this Agreement.

Currency: Any references to “C$” means the lawful currency of Canada and to “US$” means the lawful currency of the United States.

Execution and Delivery: This Agreement may be executed in as many counterparts as necessary and delivered electronically, each of which will be deemed to be an original and all of which will constitute one agreement, effective as of the date on the first page hereof.

 

SILVER BULL RESOURCES, INC.

July 7, 2016

Page 13 of 19

 

 

 

 

 

Acceptance

If the foregoing correctly reflects our agreement please sign below where indicated and return this page to SGRIL.

Yours truly,

SPROTT GLOBAL RESOURCE INVESTMENTS, LTD.

Per:            /s/ Gretchen Carter

Gretchen Carter

CFO

ACKNOWLEDGED and AGREED as of the date of this Agreement

SILVER BULL RESOURCES, INC.

Per:            /s/ Sean Fallis

            Sean Fallis      Chief Financial Officer

        Name                                        Position

 

 

 

Silver Bull Resources, Inc.

Brokered Private Placement – Term Sheet

July 5, 2016

Attention:      Mr. Tim Barry

Director, President & CEO

The following term sheet (“Term Sheet”) outlines the general terms and conditions under which Sprott Global Resource Investments, Ltd. may act as a placement agent in a private placement offering of Units (hereinafter defined) by Silver Bull Resources, Inc. This Term Sheet has been prepared for information and discussion purposes and, except for this paragraph and the paragraph below relating to Jurisdiction (which shall be legally binding on the parties hereto), is not intended to be legally binding or to impose any obligation to negotiate definitive documentation or complete the Offering referred to herein or otherwise.

	
Issuer:

	
Silver Bull Resources, Inc. (the “Corporation”)

Suite 1908, 925 West Georgia Street

Vancouver, BC V6C 3L2

	 	 
	
Offering:

	
Brokered private placement of up to 3,340,000 Units of the Corporation (C$ 501,000).

	 	 
	
Unit Price:

	
C$ 0.15 per Unit.

	 	 
	
Units:

	
Each Unit will consist of one common share in the capital of the Corporation (a “Common Share”) and one share purchase warrant (a “Warrant”).

	 	 
	
Warrants:

	
Each Warrant will be non-transferable and entitle the purchase of one Common Share (a “Warrant Share”) for three years from the Closing Date at a price of C$ 0.16, subject to the Acceleration Provision (hereinafter defined).

	 	 
	
Acceleration Provision:

	
If, commencing on the fourth month after the Closing Date, the closing price of the Common Shares on the TSX (as defined below) is higher than C$ 0.30 for 20 consecutive trading days then on the 20th consecutive trading day (the “Acceleration Trigger Date”) the expiry date of the Warrants may be accelerated to the 20th trading day after the Acceleration Trigger Date by the issuance, within three trading days of the Acceleration Trigger Date, of a news release announcing such acceleration.

	 	 
	
Offering Basis:

	
Brokered private placement of Units to accredited investors (as defined in Rule 501(a) of Regulation D under the United States Securities Act of 1933, as amended (the “1933 Act”)), in the United States pursuant to an exemption from the registration requirements of the 1933 Act and, with the consent of the Corporation, to eligible investors in other eligible foreign jurisdictions (other than Canada and the United States) pursuant to applicable private placement exemptions under applicable securities laws in such jurisdictions.

	 	 
	
Placement Agent:

	
Sprott Global Resource Investments, Ltd.

	 	 
	
Services:

	
Placement Agent shall use commercially reasonable efforts to locate and introduce to the Corporation potential subscribers to the Offering.

 

The Corporation shall allow the Placement Agent and its legal counsel to participate in the preparation of the Subscription Agreement and the Warrant and Placement Agent Warrant certificates.

	 	 
	
Closing Date:

	
July 13, 2016 or such other date or dates as the Corporation and the Placement Agent may agree.

	 	 
	
Use of Proceeds:

	
The net proceeds from the Offering will be used for exploration activities on the Corporation’s assets and for general corporate purposes.

	 	 
	
Resale Restrictions:

	
Pursuant to the National Instrument 45-102 Resale of Securities, all securities issued pursuant to the Offering shall be subject to a restricted resale period in Canada of four months commencing on the Closing Date.

 

The securities issued pursuant to the Offering are not, and will not be, registered under the 1933 Act. Accordingly, securities acquired by United States buyers will be subject to additional restrictions on resale under the 1933 Act.

 

 

 

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Listing:

	
The Common Shares are currently listed on the Toronto Stock Exchange (“TSX”) and trade on the OTCQB Venture Marketplace (“OTCQB”) under the symbol "SVB” and “SVBL”, respectively. The Corporation will make an application to the TSX to list the Common Shares comprising the Units and the Warrant Shares, which listing will be conditionally approved prior to the Closing Date.

	 	 
	
Placement Agent’s Fee:

	
6.0% cash commission on subscriptions from new investors introduced to the Corporation by the Placement Agent plus that number of Placement Agent’s Warrants (as defined and set forth below) subject to the rules of the TSX.

 

The Placement Agent will not be entitled to any Placement Agent’s Fee or Placement Agent’s Warrants in connection with a subscription from any new investor not introduced to the Corporation by the Placement Agent. As of the date hereof, the Corporation anticipates that one investor not introduced to the Corporation by the Placement Agent will participate in the Offering, which investor is an entity organized in the British Virgin Islands.

	 	 
	
Placement Agent’s Warrants:

	
On the Closing Date, the Corporation shall issue to the Placement Agent the number of non-transferable common share purchase warrants that equals 6.0% of the Units placed to new investors introduced to the Corporation by the Placement Agent. Each Placement Agent’s Warrant permits the purchase of one Warrant Share for two years from the Closing Date at the greater of the Unit Price and the five day VWAP preceding notice of the Offering to the TSX and is subject to the Acceleration Provision.

	 	 
	
Placement Agent Agreement:

	
The Corporation will enter into a definitive placement agent agreement with the Placement Agent promptly after the execution of this Term Sheet and prior to the Closing Date. The Placement Agent Agreement shall include, without limitation, industry standard representations, warranties, covenants (including customary broker-dealer representations, warranties and covenants), conditions, and indemnities, and industry standard termination provisions including, without limitation, a disaster out, litigation out, regulatory out, market out, due diligence out and a material adverse change out customary for agreements of this nature, in each case exercisable prior to the Closing Date, which clauses shall commence upon acceptance of this Term Sheet.

 

The Placement Agent will represent that none of it, any of its general partners or managing members, any director or executive officer of any of the foregoing, any other officer of any of the foregoing participating in the Offering, or any other officer or employee of any of the foregoing that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in the Offering is subject to any of the "Bad Actor" disqualifications provisions described in Rule 506(d) under the 1933 Act.

	 	 
	
Subscription Agreements:

	
The terms and conditions governing the Offering and other matters related to the Offering will be set out in the Placement Agent Agreement and in the respective subscription agreements with purchasers of Units (“Subscription Agreements”). In the event of any discrepancy between the terms described herein and a Placement Agent Agreement and those contained in the Subscription Agreements, the Subscription Agreements will govern.

	 	 
	
U.S. Legend Removal:

	
The U.S. restrictive legends will not be removed from any Common Shares or Warrant Shares held by a purchaser of the Units or the Placement Agent, except in connection with the sale of the Common Shares or Warrant Shares by the purchaser or the Placement Agent (as the case may be) pursuant to (A) Rule 144 under the 1933 Act; or (B) an effective registration statement under the 1933 Act with respect to the sale of the Common Shares or the Warrant Shares by the purchaser or the Placement Agent (as the case may be). At the Corporation’s cost and subject to the foregoing, the Corporation will use commercially reasonable efforts to cause its transfer agent to remove the U.S. restrictive legend and deliver unlegended share certificates to the purchaser or the Placement Agent (as the case may be) within three business days of presentation of a legended share certificate to it.

 

If the transfer agent fails to deliver the unlegended share certificate within three business days, the Corporation will indemnify any U.S. investor (other than U.S. investors that are (i) brokers employed by the Placement Agent or (ii) one of the Exploration Capital Limited Partnerships managed by the Placement Agent or its affiliates) for any damages and costs incurred (other than loss of profits) as a result thereof. The aggregate amount of such indemnity in respect of any one legend removal shall not exceed US$ 5,000.

 

Until the first anniversary of the expiration of the Warrants, the investors will be entitled to customary “piggyback” registration rights under the 1933 Act on any registration statement of the Corporation. For the avoidance of doubt, the investors will not receive demand registration rights that would otherwise entitle investors to require the Corporation to file a registration statement registering their securities.

 

 

 

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Cashless Exercise of Warrants:

	
If at the time of exercise of Warrants or Placement Agent’s Warrants (as the case may be) the Corporation is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, then the holder of such Warrants or Placement Agent’s Warrants (as the case may be) may exercise such warrants, in whole or in part, at such time by means of a “cashless exercise.”

	 	 
	
Due Diligence:

	
Prior to the Closing Date, the Corporation shall allow and assist the Placement Agent and its legal counsel to conduct all reasonable due diligence investigations and provide the Placement Agent with written or oral due diligence responses (at the Placement Agent’s discretion) to formal due diligence questions, which the Placement Agent may reasonably require to fulfil its obligations as registrants in a private placement.

	 	 
	
Jurisdiction:

	
This Term Sheet and all documentation associated with the Offering shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and the parties hereto irrevocably attorn to the non-exclusive jurisdiction of the courts of the Province of British Columbia.

	 	 
	
Press Releases:

	
Subject to meeting its obligations under applicable securities laws and requirements of the TSX and OTCQB, the Corporation will use reasonable commercial efforts to allow the Placement Agent to review and comment on all press releases associated with the Offering, and such comments shall be considered by the Corporation, acting reasonably. Sprott Global Resource Investments, Ltd. shall not be referenced in the press release as a placement agent in the Offering.

 

	 	 
	
Regulatory Approvals:

	
The Offering and the terms thereof, including all Placement Agent’s Fees, will be subject to all necessary regulatory and corporate approvals, including approval of the TSX.

If the foregoing is in accordance with your understanding and is agreed to by you, please signify your acceptance by executing this Term Sheet where indicated below and returning the same to the Placement Agent before 4:00 pm Vancouver time on July 6th, 2016 upon which this letter as so accepted shall constitute a non-binding agreement between us with respect only to the matters specified in the first paragraph hereof but not otherwise.

Yours very truly,

	
SPROTT GLOBAL RESOURCE INVESTMENTS, LTD.

	
Per:

	
[previously signed]

	
Authorized Signatory

Agreed and accepted this 6th day of July, 2016.

	
SILVER BULL RESOURCES, INC.

	
Per:

	
[previously signed]

	
Authorized Signatory

 

 

 

 

 

  

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INDEMNITY

The Company hereby agrees to indemnify and hold the Placement Agent and each of the directors, officers, employees and shareholders of the Placement Agent (together called the “Placement Agent’s Group”) harmless from and against any and all expenses, losses (other than loss of profits), claims, actions, damages or liabilities, whether joint or several (including amounts paid in reasonable settlement of any actions, suits, proceedings or claims), and the reasonable fees and expenses of their counsel that may be incurred in advising with respect to and defending any claim that may be made against the Placement Agent’s Group or to which the Placement Agent’s Group may become subject or otherwise involved in any capacity insofar as such expenses, losses, claims, damages, liabilities or actions arise out of or are based upon, directly or indirectly, any breach of a representation, warranty or covenant of the Company in this Agreement or the Subscription Agreement. This indemnity shall not apply to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable shall determine that:

	(a)	any member of the Placement Agent’s Group has, in the course of such performance, been negligent or dishonest, engaged in willful misconduct, acted in bad faith or committed any fraudulent act; and

	(b)	the expenses, losses, claims, damages or liabilities, as to which indemnification is claimed, were directly caused by such negligence, dishonesty, willful misconduct, bad faith or fraud.

If any claim contemplated hereby is asserted against, or any potential claim contemplated hereby comes to the knowledge of, any member (the “Indemnified Party”) of the Placement Agent’s Group, the Indemnified Party shall notify the Company as soon as possible of the nature of such claim (but any failure or delay to so notify shall not affect the Company’s liability under this indemnity except to the extent that such failure or delay prejudices the rights of the parties in defending such claim or results in increased liability to the Indemnified Party or the Company) and the Company shall be entitled (but not required) to assume the defense on behalf of the Indemnified Party of any suit brought to enforce such claim. Any such defense shall be through legal counsel acceptable to the Indemnified Party and no admission of liability shall be made by the Company or the Indemnified Party without, in each case, the prior written consent of the Indemnified Party and the Company, respectively, such consent not to be unreasonably withheld. Any Indemnified Party shall have the right to employ separate counsel in any such suit and participate in the defense thereof and the fees and expenses of such counsel shall be at the expense of that Indemnified Party unless:

	(a)	the Company fails to assume the defense of such suit on behalf of the Indemnified Party within a reasonable period of receiving notice of such suit and, in the absence of evidence to the contrary, the expiration of such period shall be deemed to occur on the second clear business day immediately preceding the date by which the Indemnified Party is required by law to take action (such as the filing of an appearance, notice or other document) in connection with defending such suit;

	(b)	the employment of such counsel has been authorized in writing by the Company; or

	(c)	the named parties to any such suit include both the Indemnified Party and the Company and the Indemnified Party has been advised by counsel that there may be one or more defenses available to the Indemnified Party different from or in addition to those available to the Company,

whereupon, in any of such cases, the Company shall not have the right to assume the defense of such suit on behalf of the Indemnified Party and shall be liable to pay the reasonable fees and expenses of counsel for the Indemnified Party but the Company shall not be obligated to pay the fees and expenses of more than one counsel for all Indemnified Parties as a group.

 

1

 

 

No Indemnified Party will, without the Company’s prior written consent, settle, compromise or consent to the entry of any judgment in any action, suit, proceeding, investigation or claim in respect of which indemnification may be sought hereunder.

If for any reason (other than the occurrence of one of the events described above) the foregoing indemnification is unavailable to the Placement Agent’s Group or insufficient to hold them harmless, then the Company shall contribute to the amount paid or payable by the Placement Agent’s Group as a result of such expense, loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement Agent on the other hand but also the relative fault of the Company and the Placement Agent’s Group, as well as any relevant equitable considerations provided that, in any event, the Company shall only contribute to the amount paid or payable by the Placement Agent’s Group as a result of such expense, loss, claim, damage or liability, any excess of such amount over the amount of the fees received by the Placement Agent hereunder.

The indemnity and contribution obligations of the Company shall be in addition to any liability which the Company may otherwise have, extend to the Placement Agent’s Group on the same terms and conditions as set out herein and be binding upon and enure to the benefit of any successors, permitted assigns, heirs and personal representatives of any of the Placement Agent’s Group.

The foregoing provisions of this Indemnity shall survive the completion of the Services.

 

 

 

2

PLACEMENT AGENT’S CERTIFICATE

This certificate has been issued pursuant to that letter agreement between Sprott Global Resource Investments, Ltd. (“SGRIL”) and Silver Bull Resources, Inc. (the “Company”) dated July 7, 2016 (the “Placement Agent Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Placement Agent Agreement.

In connection with the Placement to U.S. Purchasers of the Units, SGRIL does hereby certify as follows:

1.            SGRIL is, and was throughout the Placement, duly registered as a broker-dealer with the SEC and with each state securities regulatory authority in whose jurisdiction it has introduced subscribers to the Company to purchase the Units, and is and was throughout the Placement a member in good standing with the FINRA;

2.            All communications by SGRIL in the United States to, or for the benefit or account of, U.S. Persons respecting subscriptions by them for Units have been effected in accordance with all applicable United States federal and state laws and regulations governing the registration and conduct of securities brokers and dealers;

3.            In respect of Units offered to U.S. Purchasers, SGRIL had reasonable grounds to believe and did believe, immediately prior to the Placement, that each U.S. Purchaser was an Accredited Investor and, on the date hereof, SGRIL continues to believe that each U.S. Purchaser purchasing Units is an Accredited Investor;

4.            No form of Directed Selling Efforts, General Solicitation or General Advertising or seminar or meeting whose attendees had been invited by General Solicitation or General Advertising was used by SGRIL in connection with the Placement; and

5.            SGRIL’s activities in connection with the Placement have been conducted in accordance with the Placement Agent Agreement and, in relation to (i) U.S. Purchasers in accordance with the requirements of Rule 506(b) of Regulation D, and (ii) purchasers outside of the United States and Canada that are not U.S. Purchasers, in accordance with the requirements of Regulation S.

DATED this _______ day of _____________________ , 2016

SPROTT GLOBAL RESOURCE INVESTMENTS, LTD.

By: _______________________________________

Gretchen Carter

CFOExhibit 10.4

 

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY OR ANY SECURITY ACQUIRED UPON ITS EXERCISE IN CANADA BEFORE NOVEMBER [●], 2016.

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAW.  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF SILVER BULL RESOURCES, INC. (THE “COMPANY”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO RULE 904 OF REGULATION S OF THE 1933 ACT, IF AVAILABLE, AND PURSUANT TO LOCAL LAWS AND REGULATIONS, (D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT, IN THE CASE OF (C), (D) OR (E), THE HOLDER HAS DELIVERED TO THE COMPANY AND THE REGISTRAR AND TRANSFER AGENT AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND THE REGISTRAR AND TRANSFER AGENT TO SUCH EFFECT.

SILVER BULL RESOURCES, INC.

WARRANT CERTIFICATE

	
Certificate No:                                           2016-[●]

	
 

	
Number of Warrants:       [●]

	
Date: July [●], 2016

          

THIS CERTIFIES THAT, for value received, [●] (the “Holder”) is the registered holder of [●] warrants (each a “Warrant”) to purchase shares of common stock, US$0.01 par value per share (“Common Stock”), of Silver Bull Resources, Inc. (the “Company”). Each Warrant shall entitle the Holder, subject to the terms and conditions set forth in this certificate (this “Warrant Certificate”), to acquire from the Company one fully paid and non-assessable share of Common Stock (a “Warrant Share”) on payment of CDN$0.205 per share of Common Stock (the “Exercise Price”), all subject to adjustment as hereinafter provided, at any time commencing on the date hereof (the “Effective Date”) and continuing up to 4:00 p.m. (Vancouver time) on July [●], 2018 (the “Time of Expiry”); provided that if, commencing on November [●], 2016, the closing price of the Common Stock of the Company on the TSX (as defined below) is higher than CDN$0.30 for 20 consecutive trading days, then on the 20th consecutive trading day (the “Acceleration Trigger Date”) the expiry date of the warrants may be accelerated to the 20th trading day after the Acceleration Trigger Date by the issuance, within three trading days of the Acceleration Trigger Date, of a news release announcing such acceleration.

	1.	Exercise of Warrants.

1.1            Election to Purchase.

The rights evidenced by this Warrant Certificate may be exercised by the Holder in whole or in part at any time commencing on the Effective Date, and continuing up to the Time of Expiry and in accordance with the provisions hereof.  The exercise may be effected by providing to the Company at its offices at Suite 1610, 777 Dunsmuir Street, Vancouver, B.C. V7Y 1K4, Canada (or such other address as may be notified in writing by the Company) (i) a duly completed and executed election to exercise form in substantially the form attached as Exhibit “1” hereto (the “Election to Exercise”) and (ii) payment of the Exercise Price by a certified cheque, bank draft or money order payable at par to the order of the Company, or by wire or electronic funds transfer to an account designated by the Company, in each case in the amount of the aggregate Exercise Price for the number of shares of Common Stock specified in the Election to Exercise. Such exercise shall be effective upon the personal delivery to, or if sent by mail or other means of transmission upon actual receipt by, the Company of a duly completed and executed Election to Exercise and the Exercise Price for the number of shares of Common Stock specified in the Election to Exercise (the “Exercise Date”).

 

1

 

 

1.2            Cashless Exercise.

If, at the time of exercise of the Warrant, the Company is no longer an issuer subject to the reporting requirements of Section 13(a) or 15(d) of the United States Securities Exchange Act of 1934, as amended, then the Warrant may be exercised by means of a “cashless exercise” (the “Cashless Exercise Right”), whereby the Holder shall be entitled to receive that number of Warrant Shares resulting from the following formula:

Where:

A =   the Current Market Price per Share (as defined below) immediately preceding the date on which the Holder elects to exercise the Warrant by means of the Cashless Exercise Right.

B =    the then applicable exercise price of the Warrant.

X =    the number of Warrant Shares that would otherwise have been issuable had the Holder elected to exercise the Warrant by means of a cash exercise.

1.3            Partial Exercise.

If the Holder subscribes for a lesser number of shares of Common Stock than may be subscribed for pursuant to this Warrant Certificate, the Company shall, contemporaneously with the issuance of the certificates representing the Common Stock issuable on the exercise of the Warrants so exercised, issue to the Holder, without charge, a Warrant Certificate on identical terms in respect of that number of shares of Common Stock in respect of which the Holder has not exercised the rights evidenced by this Warrant Certificate.

1.4            Issuance of Common Stock.

The Company shall, as soon as possible after the Exercise Date, issue the number of shares of Common Stock specified in the Election to Exercise. The Common Stock issuable upon the exercise of the Warrants shall be deemed to have been issued and the person or persons to whom such Common Stock is to be issued shall be deemed to have become the holder or holders of record of such Common Stock on the Exercise Date.

1.5            Certificates.

As promptly as practicable after the Exercise Date (but no later than three business days following the Exercise Date), the Company shall issue and deliver or cause to be delivered to the Holder, registered in the name of the Holder, at the address specified therein, or, if not so specified in the Election to Exercise, cause to be held for collection by the Holder at the address of the Company as set out in subsection 1.1 (or at such additional place as may be decided by the Company from time to time and notified in writing to the Holder), certificates for that number of shares of Common Stock specified in the Election to Exercise, a replacement Warrant Certificate, if any, and a cheque representing the Fractional Cash Consideration (as defined below), if any.

1.6            Fractional Shares of Common Stock.

Fractional shares of Common Stock shall not be issued upon the exercise of any Warrants. The Holder shall be entitled to cash compensation in lieu of fractional shares of Common Stock of an amount in cash (the “Fractional Cash Consideration”) equal (computed in the case of a fraction of a cent to the next lower cent) to the value of the fractional share of Common Stock, in each case calculated on the basis of the Current Market Price per Share at the date of exercise of such Warrant.

 

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	2.	Anti-Dilution Protection.

2.1            Definitions.

For the purposes hereof, the words and terms defined below shall have the respective meanings specified therefor in this subsection 2.1:

		(i)	“Current Market Price per Share”, at any date, means the price per share of Common Stock (denominated in Canadian dollars based, if necessary, on the noon rate of exchange as reported by the Bank of Canada) equal to the VWAP for the five trading-days preceding such date (i) on the TSX, or (ii) if the Common Stock is not traded on the TSX, on any other recognized stock exchange, or (iii) if the Common Stock is not traded on a recognized stock exchange, on the over-the-counter market. If the Common Stock is not then traded in the over-the-counter market or on a recognized stock exchange, the Current Market Price of the Common Stock shall be the fair market value of the Common Stock as determined in good faith by the board of directors of the Company after consultation with an internationally recognized investment dealer or investment banker;

		(ii)	“director” means a director of the Company from time to time and reference herein to an “action by the directors” means an action by the directors of the Company as a board or, whenever duly empowered, an action by a committee of directors;

		(iii)	“Dividends Paid in the Ordinary Course” means dividends paid on the Common Stock in any fiscal year of the Company in cash, provided that the amount of such dividends does not in such fiscal year exceed 50% of the consolidated net income of the Company before extraordinary items for the period of 12 consecutive months ended immediately prior to the first day of such fiscal year less the amount of all cash dividends payable on all shares ranking prior to or on a parity with the Common Stock in respect of the payment of dividends (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of 12 consecutive months or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company);

		(iv)	“recognized stock exchange” means a stock exchange or quotation system recognized by the Canadian Securities Administrators;

		(v)	“TSX” means the Toronto Stock Exchange; and

		(vi)	“VWAP”, for any period, means the volume weighted average trading price of the Common Stock, calculated by dividing the total value by the total volume of Common Stock traded for the trading days included in the relevant period.

2.2            Adjustments.

The Exercise Price and the number of shares of Common Stock issuable upon exercise of the Warrants will be subject to adjustment from time to time upon the occurrence of any of the events and in the manner provided as follows:

		(a)	If and whenever at any time prior to the Time of Expiry the Company shall:

		(i)	declare a dividend or make a distribution on the Common Stock payable in Common Stock (or securities exchangeable for or convertible into Common Stock)

		(ii)	subdivide, redivide or change the outstanding Common Stock into a greater number of shares of Common Stock; or

		(iii)	reduce, combine or consolidate the outstanding Common Stock into a lesser number of shares of Common Stock,

 

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(any of such events in paragraphs (i), (ii) or (iii) above being called a “Common Stock Reorganization”), then effective immediately after the record date or effective date, as the case may be, at which the holders of Common Stock are determined for the purposes of the Common Stock Reorganization, the Exercise Price shall be adjusted to a price determined by multiplying the applicable Exercise Price in effect on such effective date or record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such effective date or record date before giving effect to such Common Stock Reorganization and the denominator of which shall be the number of shares of Common Stock outstanding immediately after giving effect to such Common Stock Reorganization (including, in the case where securities exchangeable for or convertible into Common Stock are distributed, the number of additional shares of Common Stock that would have been outstanding had such securities been exchanged for or converted into Common Stock immediately after giving effect to such Common Stock Reorganization).

		(b)	If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the issuing of rights, options or warrants to all or substantially all of the holders of the Common Stock entitling them for a period expiring not more than forty-five (45) days after such record date (the “Rights Period”) to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or having a conversion or exchange price per share) which is less than 95% of the Current Market Price per Share as of three days prior to the record date for such issue (any of such events being called a “Rights Offering”), then effective immediately after the end of the Rights Period the Exercise Price shall be adjusted to a price determined by multiplying the applicable Exercise Price in effect at the end of the Rights Period by a fraction the numerator of which shall be the sum of:

		(i)	the number of shares of Common Stock outstanding as of the record date for the Rights Offering; and

		(ii)	a number determined by dividing (A) either (i) the product of the number of shares of Common Stock issued or subscribed during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering and the price at which such Common Stock is offered, or (ii) as the case may be, the product of the number of shares of Common Stock for or into which the convertible or exchangeable securities offered during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering are exchangeable or convertible and the exchange or conversion price of the convertible or exchangeable securities so issued, by (B) the Current Market Price per Share as of three days prior to the record date for the Rights Offering, and

the denominator of which shall be the number of shares of Common Stock outstanding (including the number of shares of Common Stock actually issued or subscribed for during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering) or which would be outstanding upon the conversion or exchange of all convertible or exchangeable securities issued during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering, as applicable, in each case after giving effect to the Rights Offering.

In order to give effect to the provisions of subsection 2.2(e) in the circumstances described below, if the Holder shall have exercised its right to purchase Common Stock during the period beginning immediately after the record date for a Rights Offering and ending on the last day of the Rights Period therefor, in addition to the Common Stock to which it is otherwise entitled upon such exercise, then the Holder shall be entitled to that number of additional shares of Common Stock equal to the result obtained when the difference, if any, between the Exercise Price in effect immediately prior to the end of such Rights Offering and the Exercise Price, as adjusted for such Rights Offering pursuant to this subsection 2.2(b), is multiplied by the number of shares of Common Stock issued upon exercise of the Warrants held by the Holder during such period, and the resulting product is divided by the Exercise Price, as adjusted for such Rights Offering pursuant to this subsection 2.2(b). Such additional shares of Common Stock shall be deemed to have been issued to the Holder immediately following the end of the Rights Period and a certificate for such additional shares of Common Stock shall be delivered to the Holder within 10 business days following the end of the Rights Period.

 

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		(c)	If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the payment, issue or distribution to all or substantially all of the holders of the Common Stock of (i) a dividend, (ii) any property, cash or assets (including evidences of indebtedness), or (iii) rights, options, warrants, or other securities (including, without limitation, securities convertible into or exchangeable for Common Stock), and such payment, issue or distribution does not constitute a Dividend Paid in the Ordinary Course, a Common Stock Reorganization or a Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise Price shall be adjusted effective immediately after such record date to a price determined by multiplying the applicable Exercise Price in effect on such record date by a fraction:

		(i)	the numerator of which shall be:

		(1)	the product of the number of shares of Common Stock outstanding on such record date and the Current Market Price per Share as of three days prior to such record date; less

		(2)	the aggregate fair market value, as determined by action by the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, to the holders of the Common Stock of such dividend, property, cash, assets, rights, options, warrants or other securities so paid, issued or distributed less the aggregate fair market value, as determined by action of the directors (whose determination shall be conclusive) and subject to the prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, of the consideration, if any, received therefor by the Company, and

		(ii)	the denominator of which shall be the number of shares of Common Stock outstanding on such record date multiplied by the Current Market Price per Share as of three days prior to such record date.

Such adjustment shall be made successively whenever such a record date is fixed. To the extent that such payment, issuance or distribution is not so made, the Exercise Price shall be readjusted effective immediately to the Exercise Price which would then be in effect based upon such payment, issuance or distribution actually made.

		(d)	If and whenever at any time prior to the Time of Expiry there shall be a reorganization, reclassification or other change of Common Stock at any time outstanding or change of the Common Stock into other shares or into other securities (other than a Common Stock Reorganization), or a consolidation, amalgamation, arrangement or merger of the Company with or into any other corporation or other entity, or a sale, lease, exchange or transfer of all or substantially all of the undertaking or assets of the Company to another person in which the holders of Common Stock are entitled to receive shares, other securities or property, including cash (any of such events being herein called a “Capital Reorganization”), if the Holder exercises its right to subscribe for and purchase Common Stock pursuant to the exercise of the Warrants after the effective date of such Capital Reorganization then the Holder shall be entitled to receive, and shall accept for the same aggregate consideration in lieu of the number of shares of Common Stock to which the Holder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property, including cash, which it would have received as a result of such Capital Reorganization had the Holder exercised its right to acquire Common Stock immediately prior to the effective date or record date, as the case may be, of the Capital Reorganization and had the Holder been the holder of such Common Stock on such effective date or record date, as the case may be.

 

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		(e)	If determined appropriate by the directors, acting reasonably, and subject to any required prior approval of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded, appropriate adjustments shall be made in the application of the provisions set forth in this subsection 2.2, with respect to any shares, other securities or other property, including cash, deliverable upon the exercise of any Warrant. Any such adjustments shall be made by and set forth in an agreement supplemental hereto approved by action by the directors, acting reasonably, and shall for all purposes be conclusively deemed to be appropriate adjustments.

		(f)	If and whenever at any time prior to the Time of Expiry there shall occur a Common Stock Reorganization which results in an adjustment to the Exercise Price pursuant to the provisions of this subsection 2.2, the number of shares of Common Stock issuable (at the adjusted Exercise Price) upon the exercise of Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of shares of Common Stock theretofore issuable on the exercise thereof by a fraction, the numerator of which shall be the applicable Exercise Price in effect immediately prior to such adjustment and the denominator of which shall be the applicable Exercise Price resulting from such adjustment.

		(g)	In case the Company after the date of issue of the Warrants shall take any action affecting the Common Stock, other than action described above in this subsection 2.2, which in the opinion of the directors, acting reasonably, would materially affect the rights of the Holder and/or the acquisition rights of the Holder, then that number of shares of Common Stock which are to be received upon the exercise of the Warrants shall be adjusted in such manner, if any, and at such time, by action of the directors, acting reasonably, as they may determine to be equitable to the Holder in the circumstances, but subject in all cases to any necessary regulatory approval, including the prior consent of the TSX and any other stock exchange or market on which the Common Stock may be listed or traded.

2.3            Rules.

For the purposes of subsection 2.2 hereof, any adjustment shall be made successively whenever an event referred to therein shall occur, subject to the following provisions:

		(a)	no adjustment to the Exercise Price shall be required unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment in the number of shares of Common Stock issuable upon exercise of the Warrants will be required to be made unless the cumulative effect of such adjustment or adjustments would change the number of shares of Common Stock issuable upon the exercise of a Warrant by at least one share of Common Stock and, for greater clarity, any adjustment which, except for the qualification of this section, would otherwise have been required to be made shall be carried forward and taken into account in any subsequent adjustment; provided, however, that in no event shall the Company be obligated to issue fractional shares of Common Stock or fractional interests in Common Stock upon exercise of a Warrant;

		(b)	if a dispute shall at any time arise with respect to adjustments to the Exercise Price or the number of shares of Common Stock issuable pursuant to the exercise rights represented by a Warrant, such disputes shall be conclusively determined by the Company’s auditors or, if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the directors and any such determination shall, absent manifest or clerical error, be conclusive evidence of the correctness of any adjustments made; and

		(c)	if the Company shall set a record date to determine the holders of its Common Stock for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights, options or warrants and shall thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or purchase rights legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of shares of Common Stock issuable upon exercise of the Warrants shall be required by reason of the setting of such record date.

 

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2.4            Taking of Actions.

As a condition precedent to the taking of any action which would require an adjustment pursuant to subsection 2.2 hereof, the Company shall take any action that may, in the opinion of counsel, be necessary in order that the Company may validly and legally issue as fully paid and non-assessable all of the shares of Common Stock which the Holder is entitled to receive in accordance with the provisions of this Warrant Certificate.

2.5            Notice.

At least 10 business days prior to the effective date or record date, as the case may be, of any event that requires or that may require an adjustment in any of the exercise rights of the Holder under this Warrant Certificate, including the number of shares of Common Stock that may be acquired under this Warrant Certificate, the Company shall deliver to the Holder a certificate of the Company specifying the particulars of such event and, if determinable, the required adjustment and the computation of such adjustment. In case any adjustment for which a certificate has been given is not then determinable, the Company shall promptly after such adjustment is determinable deliver to the Holder a certificate of the Company showing how such adjustment was computed. The Company hereby covenants and agrees that the register of transfers and share transfer books for the Common Stock shall be open during normal business hours for inspection by the Holder, and that the Company will not take any action which might deprive the Holder of the opportunity of exercising the rights of subscription contained in this Warrant Certificate, during such 10 business day period.

	3.	Covenants by the Company.

The Company hereby covenants and agrees as follows:

		(a)	it will reserve and there will remain unissued out of its authorized capital, solely for the purpose of issuing upon the exercise of the Warrants, a sufficient number of shares of Common Stock to satisfy the rights of acquisition provided for in this Warrant Certificate;

		(b)	all shares of Common Stock issued upon exercise of the right to purchase provided for herein shall, upon payment of the Exercise Price therefor, be duly authorized and issued as fully paid and non-assessable shares of Common Stock;

		(c)	it will make all requisite filings under applicable securities legislation in connection with the issuance of Common Stock upon exercise of the Warrants;

		(d)	it will at all times, so long as any of the Warrants evidenced by this Warrant Certificate remain outstanding use its reasonable commercial efforts to do and cause to be done all things necessary to maintain its status as a reporting issuer not in default under the laws of the Provinces of British Columbia, Alberta and Ontario; and

		(e)	it will at its expense and as expeditiously as possible, use its reasonable commercial efforts to cause all shares of Common Stock issuable upon the exercise of the Warrants to be duly listed on the TSX and/or any other recognized stock exchange upon which the Common Stock may be then listed prior to the issuance of such shares.

	4.	Representations and Warranties of the Company.

The Company hereby represents and warrants that:

		(a)	it is duly authorized and has all necessary corporate power and authority to create and issue the Warrants evidenced hereby and the Common Stock issuable upon the exercise of the Warrants;

		(b)	this Warrant Certificate has been duly executed and the Warrants evidenced hereby represent valid, legal and binding obligations of the Company enforceable in accordance with their terms, and the Company has the power and authority to issue this certificate and to perform each of its obligations as herein contained; and

 

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		(c)	the execution and delivery of this Warrant Certificate by the Company are not, and the issuance of the Common Stock upon exercise of the Warrants in accordance with the terms hereof, will not be, inconsistent with the Company’s constating documents, and do not and will not contravene any provision of, or constitute a default under, any applicable law or any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound.

	5.	Transfer of Warrants.

The Warrants are non-transferable.

	6.	Replacement.

Upon receipt of evidence satisfactory to the Company, acting reasonably, of the loss, theft, destruction or mutilation of this Warrant Certificate, the Company shall issue and deliver to the Holder a replacement certificate containing the same terms and conditions as this Warrant Certificate.

	7.	Expiry.

The Warrants shall expire and all rights to purchase Common Stock hereunder shall cease and become null and void at the Time of Expiry.

	8.	Time.

Time shall be of the essence of this Warrant Certificate.

	9.	Governing Law.

This Warrant Certificate and its application and interpretation shall be governed by and interpreted and construed in accordance with the laws of the State of Nevada.

	10.	Legends on Common Stock.

Any certificate representing Common Stock issued upon the exercise of the Warrants prior to the date that is four months and a day after the Effective Date, will bear the following legend:

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN CANADA BEFORE NOVEMBER [●], 2016.

Any certificate representing Common Stock issued upon the exercise of the Warrants will bear the following U.S. restrictive legend (the “U.S. Legend”) and Canadian restrictive legend:

U.S. Legend

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAW.  THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF SILVER BULL RESOURCES, INC. (THE “COMPANY”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, (C) PURSUANT TO RULE 904 OF REGULATION S OF THE 1933 ACT, IF AVAILABLE, AND PURSUANT TO LOCAL LAWS AND REGULATIONS, (D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT, IN THE CASE OF (C), (D) OR (E), THE HOLDER HAS DELIVERED TO THE COMPANY AND THE REGISTRAR AND TRANSFER AGENT AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY AND THE REGISTRAR AND TRANSFER AGENT TO SUCH EFFECT.

 

 

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Canadian Restrictive Legend

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (THE “TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TSX.

provided that in the case of a sale of the Warrant Shares by the Holder made pursuant to either (A) the provisions of Rule 144 of the United States Securities Act of 1933 (the “1933 Act”); or (B) an effective registration statement under the 1933 Act, the Company shall, at the Company’s own cost, use commercially reasonable efforts to cause the transfer agent to remove the U.S. Legend and deliver unlegended share certificates to the Holder within three trading days following the delivery by the Holder to the Company or the Company’s transfer agent of a share certificate endorsed with the U.S. Legend.  If the Company’s transfer agent fails to deliver an unlegended share certificate within such three trading day period, the Company will indemnify the Holder (other than U.S. investors that are (i) brokers employed by Sprott Global Resource Investments, Ltd. (the “Placement Agent”) or its affiliates or (ii) one of the Exploration Capital Limited Partnerships managed by the Placement Agent or its affiliates) for any damages and costs incurred as a result thereof, provided that: (i) such indemnity shall not extend to any lost profits of the Holder; and (ii) the aggregate amount of such indemnity in respect of any one legend removal shall not exceed US$5,000.  For greater clarity, if, in the case of a sale pursuant to, and subject to satisfaction of the conditions required by, (A) or (B) above, the Company or the Company’s transfer agent requires a legal opinion to remove the U.S. Legend from any certificates representing the Warrant Shares as contemplated in this section 10, the Company shall use commercially reasonable efforts to cause its legal counsel to deliver such legal opinion at the Company’s expense.

	11.	Amendments.

Any alteration, amendment or revision to this Warrant Certificate may only be made by a written agreement between the Company and the Holder.

	12.	Miscellaneous Interpretation Matters.

		(a)	The division of this Warrant Certificate into sections and subsections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof.

		(b)	Unless otherwise expressly provided or unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

		(c)	The use of the words, “includes” or “including” shall be deemed to mean “includes, without limitation”, or “including, without limitation”, as applicable, in each case whether or not they are in fact followed by such words or words of like import.

		(d)	For the purposes hereof, “business day” means any day except Saturday, Sunday or a statutory holiday in Vancouver, British Columbia and, if any period expires or any day on which any action is to be taken under this Warrant Certificate falls on a day which is not a business day, it shall be deemed to refer to the next business day.

 

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	13.	Severability.

If any covenant or provision herein or any portion hereof is determined to be void, unenforceable or prohibited by the law of any province or the local requirements of any provincial or federal government authority, such shall not be deemed to affect or impair the validity of any other covenant or provision herein or a portion thereof, as the case may be, nor the validity of such covenant or provision or a portion thereof, as the case may be, in any other jurisdiction.

	14.	Enurement.

This Warrant Certificate and all of its provisions shall enure to the benefit of the Holder and its successors or personal representatives and shall be binding upon the Company, its successors and permitted assigns.

	15.	Language.

The parties hereto acknowledge and confirm that they have requested that this Warrant Certificate as well as all notices and other documents contemplated hereby be drawn up in the English language.

	16.	General.

This Warrant Certificate is not valid for any purpose whatsoever unless and until it has been signed by or on behalf of the Company. The holding of the Warrants evidenced by this Warrant Certificate shall not be construed as conferring upon the Holder any right or interest whatsoever as a shareholder of the Company nor entitle the Holder to any right or interest in respect thereof except as expressly provided in this Warrant Certificate. The Company will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as may be reasonably required for better accomplishing and effecting the intentions and provisions of this Warrant Certificate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

 

 

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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be executed by its duly authorized officer.

DATED as of the _____ day of July, 2016.

	 	
 

 

SILVER BULL RESOURCES, INC.

 

 

	 	 
	 	
Name:         Sean Fallis

Title:            Chief Financial Officer

 

 

 

  

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EXHIBIT “1”

Election to Exercise

The undersigned hereby irrevocably elects to exercise the number of the Warrants of Silver Bull Resources, Inc. set out below for the number of shares of Common Stock as set forth below:

		(i)            	Number of Warrants to be exercised:   	                                        

		(ii)            	Number of shares of Common Stock: 	                                        

		(iii)            	Exercise Price:                                                                                                  	                                        

		(iv)            	Aggregate Purchase Price [(ii) multiplied by (iii)]:   	$	

and hereby tenders a certified cheque, bank draft or cash, or immediately available funds by wire or electronic funds transfer, for such aggregate purchase price, and directs such Common Stock to be registered and certificates therefor to be issued as directed below.

DATED this                                        day of                                                                      , 201___.

                          Per:____________________________________

Direction as to Registration

Name of Registered Holder:                      _____________________________________

Address of Registered Holder:         _____________________________________

                                                               _____________________________________

                                                               _____________________________________

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