1039-00002 · Torchlight Mining Corp · Closing

dtc-letter-of-representations.docx DOCUMENT Capital Markets

4 / 40 ← → ✕

TORCHLIGHT MINING CORP. 2200 – 400 Burrard Street Vancouver, British Columbia V6C 3A6 Canada

April 19, 2022

Northern Dominion Trust Company (as Registrar, Transfer Agent, and Paying Agent) 101 Barclay Street, 7th Floor New York, NY 10286

Attention: Sandra Leung, Vice President, Corporate Trust

The Depository Trust Company 55 Water Street New York, NY 10041

LETTER OF REPRESENTATIONS

Re: 8.750% Senior Secured Notes due 2029 Aggregate Principal Amount: $300,000,000 Issuer: Torchlight Mining Corp. CUSIP (144A): 891207 AA 3 / ISIN (144A): US891207AA38 CUSIP (Reg S): C89120 AA 5 / ISIN (Reg S): USC89120AA58

Ladies and Gentlemen:

Section 1. Recitals and Background

Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act (the "Issuer"), has issued $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes") pursuant to an Indenture dated as of April 19, 2022 (as the same may be supplemented, amended, or otherwise modified from time to time in accordance with its terms, the "Indenture"), among (i) the Issuer, (ii) Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. (collectively, the "Guarantors"), and (iii) Northern Dominion Trust Company, as Trustee, Paying Agent, Transfer Agent, Registrar, and Collateral Agent (in each such capacity, the "Trustee"). Each of the Guarantors has unconditionally guaranteed, on a senior secured basis, the Issuer's obligations under the Notes and the Indenture.

The Notes were offered and sold pursuant to a Purchase Agreement dated March 29, 2022 (the "Purchase Agreement") among the Issuer, the Guarantors, and the initial purchasers named therein, including Kelvantis Capital Markets LLC (as lead initial purchaser and book-running manager), Prestige Barrington & Co., Inc., and Halcyon Securities Inc. (collectively, the "Initial Purchasers"). The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or under any state or provincial securities laws, and were offered and sold in reliance on (a) the exemption from registration provided by Rule 144A under the Securities Act ("Rule 144A") and (b) Regulation S under the Securities Act ("Regulation S"), in each case, as more fully described in the Offering Memorandum dated March 14, 2022 relating to the Notes (the "Offering Memorandum").

The Issuer desires that the Notes be eligible for book-entry deposit, clearance, and settlement through The Depository Trust Company ("DTC") and, with respect to beneficial interests in the Regulation S Global Note (as defined below), through Stonefield Industries ("Thackeray Partners LLC") and Harborview Industries ("Ashgrove Enterprises"), each acting as an indirect participant in DTC. This Letter of Representations (this "Letter") sets forth the representations, agreements, and acknowledgments of the Issuer and the Trustee in connection therewith.

Section 2. Description of the Notes

The following is a summary description of the material terms of the Notes. This summary is qualified in its entirety by reference to the Indenture and the form of Global Notes attached as exhibits thereto.

Title: 8.750% Senior Secured Notes due 2029.

Aggregate Principal Amount: $300,000,000.

Interest Rate: 8.750% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

Interest Payment Dates: Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2022, to holders of record on the immediately preceding April 1 or October 1 (each, a "Record Date"), as applicable.

Maturity Date: April 15, 2029.

Issue Price: 98.50% of par, resulting in aggregate gross proceeds to the Issuer of $295,500,000 (before deducting Initial Purchaser discounts, commissions, and offering expenses).

Minimum Denomination: $2,000 principal amount and integral multiples of $1,000 in excess thereof.

Form of Notes — Global Notes: The Notes are represented by:

(a) one or more global notes in fully registered form, without coupons, representing the Notes sold in reliance on Rule 144A (each, a "Rule 144A Global Note"), bearing the CUSIP number 891207 AA 3 and the ISIN US891207AA38, to be deposited with the Trustee, as custodian for DTC; and

(b) one or more global notes in fully registered form, without coupons, representing the Notes sold in reliance on Regulation S (each, a "Regulation S Global Note" and, together with the Rule 144A Global Notes, the "Global Notes"), bearing the CUSIP number C89120 AA 5 and the ISIN USC89120AA58, to be deposited with the Trustee, as custodian for DTC, for the accounts of Thackeray Partners LLC and Ashgrove Enterprises.

Governing Law: The Notes and the Indenture are governed by, and shall be construed in accordance with, the laws of the State of New York.

Section 3. Representations of the Issuer

The Issuer hereby represents and warrants to DTC and the Trustee as follows:

3.1 Book-Entry Form

The Issuer represents that the Notes will be issued in the form of one or more fully registered Global Notes, registered in the name of Cede & Co. (as nominee of DTC), or such other nominee as DTC may from time to time designate, and deposited with or on behalf of DTC. Beneficial interests in the Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants, including, with respect to the Regulation S Global Note, Thackeray Partners LLC and Ashgrove Enterprises.

No beneficial owner of any interest in a Global Note will receive a definitive certificated Note representing such beneficial owner's interest in the Notes, except in the limited circumstances expressly set forth in Section 6 of this Letter and in the Indenture. So long as DTC or its nominee is the sole registered holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes.

3.2 Compliance with DTC Requirements

The Issuer shall comply, and shall cause its agents to comply, with the Operational Arrangements of DTC (as in effect from time to time) applicable to book-entry-only securities, including, without limitation, all requirements relating to (i) the timely payment of principal, premium (if any), and interest on the Notes through the Trustee as Paying Agent, (ii) the format and content of notices to be delivered to DTC, and (iii) the provision of information reasonably required by DTC in order to maintain the eligibility of the Notes for book-entry deposit.

The Issuer acknowledges that DTC may discontinue providing its services as depositary with respect to the Notes at any time by giving reasonable notice to the Issuer or the Trustee. In the event that a successor depositary is not appointed by the Issuer within ninety (90) days after DTC provides such notice or after DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Issuer shall execute, authenticate, and deliver definitive certificated Notes in exchange for interests in the Global Notes in accordance with the terms of the Indenture.

3.3 Payments. All payments of principal of, and premium (if any) and interest on, the Global Notes shall be made by the Trustee, as Paying Agent, to Cede & Co. (or such other nominee as DTC may direct in writing to the Trustee) by wire transfer of immediately available funds in United States dollars to such account as DTC shall specify, on each applicable payment date. The first interest payment date with respect to the Notes shall be October 15, 2022.

The Issuer acknowledges that, upon receipt of any payment of principal, premium (if any), or interest on the Global Notes by DTC, DTC will immediately credit the accounts of its participants with payments in amounts proportionate to their respective beneficial interests in the relevant Global Note, as shown on the records of DTC, in accordance with DTC's rules, regulations, and customary procedures. The Issuer further acknowledges and agrees that neither the Issuer nor the Trustee shall have any responsibility or liability for (a) any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Global Notes maintained by DTC or by any participant of DTC, (b) the maintenance, supervision, or review of any records relating to such beneficial ownership interests, or (c) any advice or representation made by or with respect to DTC relating to the rules, regulations, or procedures of DTC or any action taken by DTC or at the direction of its participants.

3.4 Notices. The Issuer shall cause all notices, reports, and other communications to holders of the Notes required or permitted under the Indenture to be transmitted to DTC in accordance with DTC's then-applicable procedures. The Issuer acknowledges that such transmission shall constitute valid and effective notice to the holders of the Notes for all purposes under the Indenture, whether or not any particular beneficial owner of an interest in a Global Note actually receives such notice. The Issuer shall provide copies of all such notices to the Trustee simultaneously with (or prior to) delivery to DTC.

3.5 Transfer Restrictions

The Issuer represents that the Notes are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and are subject to the transfer restrictions described in the Indenture, the Offering Memorandum, and the legends set forth on the Global Notes, including, without limitation, restrictions applicable to Notes sold in reliance on Rule 144A and restrictions applicable to Notes sold in reliance on Regulation S. The Global Notes bear restrictive legends as required by the Securities Act and the applicable regulations thereunder.

The Issuer shall cooperate fully with the Trustee and DTC to effect transfers of beneficial interests between the Rule 144A Global Note and the Regulation S Global Note in accordance with the procedures established by the Indenture and DTC's Operational Arrangements, including by facilitating the delivery of certifications and opinions of counsel, if required by the Indenture, in connection with any such transfer.

Section 4. Representations Regarding the Trustee, Registrar, Transfer Agent, and Paying Agent

Northern Dominion Trust Company has been duly appointed as Registrar, Transfer Agent, and Paying Agent under the Indenture and hereby confirms that it agrees to perform the duties of each such role in accordance with the terms and conditions of the Indenture and in compliance with DTC's Operational Arrangements, as in effect from time to time.

Northern Dominion Trust Company shall serve as custodian of the Global Notes for DTC, holding the Global Notes at its Corporate Trust Office located at 101 Barclay Street, 7th Floor, New York, NY 10286, or at such other location as DTC may approve in writing. Northern Dominion Trust Company acknowledges its obligation, as custodian, to safeguard the Global Notes and to surrender or make available such Global Notes to DTC or its nominee only in accordance with the instructions of DTC and the terms of the Indenture.

Northern Dominion Trust Company shall maintain the register of holders of the Notes (the "Register") in book-entry form, with Cede & Co. (or such other nominee of DTC as may be designated from time to time) reflected as the sole registered holder of each Global Note. Entries in the Register with respect to beneficial interests in the Global Notes shall be made exclusively through the book-entry facilities of DTC and its participants.

Northern Dominion Trust Company shall, in its capacity as Paying Agent, remit all payments of principal, premium (if any), and interest on the Global Notes to DTC in immediately available funds on or before each applicable payment date, in accordance with DTC's customary procedures and the terms of the Indenture.

Section 5. DTC Operational Procedures

The Issuer and Northern Dominion Trust Company each acknowledge that DTC is a limited-purpose trust company organized under the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under Section 17A of the Exchange Act. DTC holds and provides asset servicing for securities deposited with it by its participants and facilitates the settlement of securities transactions among its participants through electronic book-entry changes in the accounts of such participants, thereby eliminating the need for physical movement of certificates.

The Issuer and Northern Dominion Trust Company acknowledge that DTC will act only on behalf of its direct and indirect participants (which include banks, broker-dealers, and other financial institutions), and that DTC's obligations relate only to such participants. Thackeray Partners LLC and Ashgrove Enterprises participate in DTC as indirect participants through their respective U.S. depositaries, and beneficial interests in the Regulation S Global Note will be held through such indirect participation arrangements.

Transfers of beneficial interests within the Rule 144A Global Note, within the Regulation S Global Note, and between the Rule 144A Global Note and the Regulation S Global Note shall be effected through DTC in accordance with DTC's Same-Day Funds Settlement System ("SDFS") and applicable rules and procedures. Settlement of transactions involving the Notes will occur on a same-day funds basis.

During the distribution compliance period under Regulation S (i.e., the forty (40)-day period commencing on the later of (x) the date the Notes are first offered to persons other than distributors and (y) the original issue date of the Notes) (the "Restricted Period"), beneficial interests in the Regulation S Global Note may be held only through Thackeray Partners LLC or Ashgrove Enterprises participants. During the Restricted Period, transfers of beneficial interests from the Regulation S Global Note to the Rule 144A Global Note may be effected only upon receipt by the Trustee of a certificate from the transferor in substantially the form set forth in the Indenture, certifying, among other things, that the proposed transfer is being made to a person that the transferor reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A, purchasing for its own account or for the account of a qualified institutional buyer, in a transaction meeting the requirements of Rule 144A.

Upon expiration of the Restricted Period, beneficial interests in the Regulation S Global Note may be transferred to the Rule 144A Global Note, and vice versa, subject to the certification requirements and other conditions set forth in the Indenture, including delivery of such certifications, opinions of counsel, and other documentation as the Trustee may reasonably require to ensure compliance with applicable securities laws. The Issuer and the Trustee shall cooperate with DTC and its participants in facilitating such transfers.

Section 6. Exchange for Definitive Certificated Notes

Notwithstanding the foregoing, the Global Notes (or any portion thereof) shall be exchangeable for definitive certificated Notes in fully registered form, without coupons, only if:

(a) DTC notifies the Issuer or the Trustee that it is unwilling or unable to continue as depositary for the Global Notes, or DTC ceases to be a clearing agency registered under the Exchange Act, and in either case, a successor depositary acceptable to the Issuer and the Trustee is not appointed within ninety (90) days after the Issuer or the Trustee receives such notice or becomes aware of such cessation, as applicable;

(b) the Issuer, in its sole discretion, delivers to the Trustee a written notice (an "Officer's Certificate") executed by an authorized officer of the Issuer stating that the Issuer has elected to cause the issuance of definitive certificated Notes in exchange for interests in the applicable Global Note; or

(c) an Event of Default (as defined in the Indenture) has occurred and is continuing with respect to the Notes, and the registered holder of a Global Note (i.e., DTC or its nominee) has requested the exchange of all or any portion of such holder's beneficial interest in the Global Note for definitive certificated Notes.

In any such case, definitive certificated Notes shall be issued in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof, registered in such names and in such denominations as DTC shall instruct the Trustee pursuant to DTC's customary procedures. Definitive certificated Notes so issued shall bear the restrictive legends regarding transfer restrictions as set forth in the Indenture and the Global Notes, as applicable, and shall otherwise be substantially in the form set forth in the applicable exhibit to the Indenture.

Upon the issuance of definitive certificated Notes, the Trustee shall cancel the corresponding Global Note (or reduce the principal amount thereof) and shall update the Register accordingly. Thereafter, the Issuer and the Trustee shall recognize each holder of a definitive certificated Note as the registered holder thereof for all purposes under the Indenture.

Section 7. Issuer's Agreements

In connection with the eligibility of the Notes for book-entry deposit and settlement through DTC, the Issuer hereby agrees as follows:

7.1 Indemnification. The Issuer agrees to indemnify and hold harmless DTC, Cede & Co. (as nominee of DTC), and their respective officers, directors, employees, and agents (collectively, the "DTC Indemnified Parties") from and against any and all losses, liabilities, claims, damages, costs, and expenses (including reasonable attorneys' fees and expenses) incurred by any DTC Indemnified Party by reason of, or arising out of, any inaccuracy in or breach of any representation, warranty, or agreement made by the Issuer in this Letter. This indemnification obligation shall survive the termination of this Letter and the payment in full of the Notes.

7.2 Information. The Issuer agrees to provide DTC and the Trustee with such information as DTC may from time to time reasonably request in connection with DTC's acceptance of the Notes for book-entry settlement and deposit, including, without limitation, information regarding the terms and conditions of the Notes, redemption or defeasance provisions, and changes to the terms of the Notes effected by supplemental indentures.

7.3 Voting and Consents. The Issuer acknowledges that neither DTC nor Cede & Co. (nor any successor nominee) will consent or vote with respect to the Notes unless authorized to do so by the beneficial owners of interests in the Global Notes. The Issuer further acknowledges that, in accordance with DTC's customary procedures, DTC will mail an omnibus proxy to the Issuer (or to the Trustee, as applicable) assigning Cede & Co.'s consenting or voting rights to those participants to whose accounts the Notes are credited on the applicable record date, and such participants shall, in turn, be responsible for soliciting and transmitting the consents or votes of the beneficial owners who hold through such participants' accounts.

7.4 Funding of Payments. The Issuer confirms that it shall deposit or cause to be deposited with the Trustee, in immediately available funds, sufficient funds for the payment of all amounts of principal, premium (if any), and interest due on the Notes no later than one (1) business day prior to each applicable payment date, all in accordance with the terms and conditions of the Indenture.

7.5 Continuing Obligations. The agreements and obligations of the Issuer set forth in this Section 7 are in addition to, and not in limitation of, the Issuer's obligations under the Indenture, the Notes, and any other agreement or instrument entered into in connection therewith.

Section 8. Miscellaneous

8.1 Amendments. This Letter of Representations may not be amended, modified, or supplemented except by a written instrument executed by each of the Issuer, Northern Dominion Trust Company (in its capacity as Trustee, Registrar, Transfer Agent, and Paying Agent), and DTC. No waiver of any provision of this Letter shall be effective unless set forth in a written instrument signed by the party granting such waiver.

8.2 Termination. This Letter of Representations shall terminate automatically, without further action by any party, upon the earliest to occur of (a) payment in full of all amounts of principal, premium (if any), and interest due on the Notes in accordance with the Indenture, (b) the exchange of all Global Notes for definitive certificated Notes in accordance with Section 6 hereof and the corresponding provisions of the Indenture, or (c) the defeasance or discharge of the Indenture in accordance with its terms. Notwithstanding the foregoing, the indemnification obligations of the Issuer set forth in Section 7.1 hereof shall survive any such termination.

8.3 Governing Law

This Letter of Representations shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.

8.4 Counterparts. This Letter of Representations may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Letter by facsimile transmission or by electronic mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart.

8.5 Defined Terms

Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Indenture dated as of April 19, 2022, among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee.

8.6 Entire Agreement

This Letter of Representations, together with the Indenture and the documents referred to herein, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, understandings, and representations relating thereto.

8.7 Severability. If any provision of this Letter of Representations is held to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Remainder of this page intentionally left blank; signature pages follow.]

IN WITNESS WHEREOF, the undersigned have caused this Letter of Representations to be duly executed and delivered as of the date first written above.

TORCHLIGHT MINING CORP. (Issuer)

By: ________

Name: Lianne Prokopchuk

Title: Chief Financial Officer

Torchlight Mining Corp. 2200 – 400 Burrard Street Vancouver, British Columbia V6C 3A6, Canada

ACKNOWLEDGED AND AGREED:

NORTHERN DOMINION TRUST COMPANY (as Registrar, Transfer Agent, Paying Agent, and Custodian)

By: ________

Name: Sandra Leung

Title: Vice President, Corporate Trust

Northern Dominion Trust Company 101 Barclay Street, 7th Floor New York, NY 10286

ACKNOWLEDGED:

THE DEPOSITORY TRUST COMPANY

By: ________

Name: ________

Title: Authorized Representative

The Depository Trust Company 55 Water Street New York, NY 10041

SCHEDULE A

DESCRIPTION OF SECURITIES

This Schedule A is provided for informational purposes and is qualified in its entirety by reference to the Indenture and the Global Notes. In the event of any conflict between this Schedule and the Indenture, the terms of the Indenture shall control.

Item	Description
Issuer	Torchlight Mining Corp.
Title of Securities	8.750% Senior Secured Notes due 2029
Aggregate Principal Amount	$300,000,000
CUSIP (Rule 144A)	891207 AA 3
ISIN (Rule 144A)	US891207AA38
CUSIP (Regulation S)	C89120 AA 5
ISIN (Regulation S)	USC89120AA58
Maturity Date	April 15, 2029
Interest Rate	8.750% per annum
Interest Payment Dates	April 15 and October 15 of each year, commencing October 15, 2022
Record Dates	April 1 and October 1
Day Count Convention	360-day year / 30-day months
Issue Price	98.50% of par
Minimum Denomination	$2,000 and integral multiples of $1,000 in excess thereof
Trustee / Registrar / Transfer Agent / Paying Agent / Collateral Agent	Northern Dominion Trust Company
Corporate Trust Office	101 Barclay Street, 7th Floor, New York, NY 10286
Governing Law	State of New York
Indenture Date	April 19, 2022
Guarantors	Wolverine Lake Mining Ltd.; Torchlight Milling & Processing Inc.; Torchlight U.S. Holdings, Inc.
Security	Senior Secured (as described in the Indenture and related Security Documents)
Offering Memorandum Date	March 14, 2022
Purchase Agreement Date	March 29, 2022
Initial Purchasers	Kelvantis Capital Markets LLC (lead initial purchaser and book-running manager); Prestige Barrington & Co., Inc.; Halcyon Securities Inc.
Form	Global Notes (Rule 144A Global Note and Regulation S Global Note), book-entry only through DTC (and, for Regulation S interests, Thackeray Partners LLC and Ashgrove Enterprises)

Depositary	The Depository Trust Company
Nominee	Cede & Co.

TORCHLIGHT MINING CORP. 2200 – 400 Burrard Street Vancouver, British Columbia V6C 3A6 Canada
April 19, 2022
Northern Dominion Trust Company (as Registrar, Transfer Agent, and Paying Agent) 101 Barclay Street, 7th Floor New York, NY 10286
Attention: Sandra Leung, Vice President, Corporate Trust
The Depository Trust Company 55 Water Street New York, NY 10041
LETTER OF REPRESENTATIONS
Re: 8.750% Senior Secured Notes due 2029 Aggregate Principal Amount: $300,000,000 Issuer: Torchlight Mining Corp. CUSIP (144A): 891207 AA 3 / ISIN (144A): US891207AA38 CUSIP (Reg S): C89120 AA 5 / ISIN (Reg S): USC89120AA58
Ladies and Gentlemen:
Section 1. Recitals and Background
Torchlight Mining Corp., a corporation incorporated under the Canada Business Corporations Act (the "Issuer"), has issued $300,000,000 aggregate principal amount of its 8.750% Senior Secured Notes due 2029 (the "Notes") pursuant to an Indenture dated as of April 19, 2022 (as the same may be supplemented, amended, or otherwise modified from time to time in accordance with its terms, the "Indenture"), among (i) the Issuer, (ii) Wolverine Lake Mining Ltd., Torchlight Milling & Processing Inc., and Torchlight U.S. Holdings, Inc. (collectively, the "Guarantors"), and (iii) Northern Dominion Trust Company, as Trustee, Paying Agent, Transfer Agent, Registrar, and Collateral Agent (in each such capacity, the "Trustee"). Each of the Guarantors has unconditionally guaranteed, on a senior secured basis, the Issuer's obligations under the Notes and the Indenture.
The Notes were offered and sold pursuant to a Purchase Agreement dated March 29, 2022 (the "Purchase Agreement") among the Issuer, the Guarantors, and the initial purchasers named therein, including Kelvantis Capital Markets LLC (as lead initial purchaser and book-running manager), Prestige Barrington & Co., Inc., and Halcyon Securities Inc. (collectively, the "Initial Purchasers"). The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or under any state or provincial securities laws, and were offered and sold in reliance on (a) the exemption from registration provided by Rule 144A under the Securities Act ("Rule 144A") and (b) Regulation S under the Securities Act ("Regulation S"), in each case, as more fully described in the Offering Memorandum dated March 14, 2022 relating to the Notes (the "Offering Memorandum").
The Issuer desires that the Notes be eligible for book-entry deposit, clearance, and settlement through The Depository Trust Company ("DTC") and, with respect to beneficial interests in the Regulation S Global Note (as defined below), through Stonefield Industries ("Thackeray Partners LLC") and Harborview Industries ("Ashgrove Enterprises"), each acting as an indirect participant in DTC. This Letter of Representations (this "Letter") sets forth the representations, agreements, and acknowledgments of the Issuer and the Trustee in connection therewith.
Section 2. Description of the Notes
The following is a summary description of the material terms of the Notes. This summary is qualified in its entirety by reference to the Indenture and the form of Global Notes attached as exhibits thereto.
Title: 8.750% Senior Secured Notes due 2029.
Aggregate Principal Amount: $300,000,000.
Interest Rate: 8.750% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.
Interest Payment Dates: Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2022, to holders of record on the immediately preceding April 1 or October 1 (each, a "Record Date"), as applicable.
Maturity Date: April 15, 2029.
Issue Price: 98.50% of par, resulting in aggregate gross proceeds to the Issuer of $295,500,000 (before deducting Initial Purchaser discounts, commissions, and offering expenses).
Minimum Denomination: $2,000 principal amount and integral multiples of $1,000 in excess thereof.
Form of Notes — Global Notes: The Notes are represented by:
(a) one or more global notes in fully registered form, without coupons, representing the Notes sold in reliance on Rule 144A (each, a "Rule 144A Global Note"), bearing the CUSIP number 891207 AA 3 and the ISIN US891207AA38, to be deposited with the Trustee, as custodian for DTC; and
(b) one or more global notes in fully registered form, without coupons, representing the Notes sold in reliance on Regulation S (each, a "Regulation S Global Note" and, together with the Rule 144A Global Notes, the "Global Notes"), bearing the CUSIP number C89120 AA 5 and the ISIN USC89120AA58, to be deposited with the Trustee, as custodian for DTC, for the accounts of Thackeray Partners LLC and Ashgrove Enterprises.
Governing Law: The Notes and the Indenture are governed by, and shall be construed in accordance with, the laws of the State of New York.
Section 3. Representations of the Issuer
The Issuer hereby represents and warrants to DTC and the Trustee as follows:
3.1 Book-Entry Form
The Issuer represents that the Notes will be issued in the form of one or more fully registered Global Notes, registered in the name of Cede & Co. (as nominee of DTC), or such other nominee as DTC may from time to time designate, and deposited with or on behalf of DTC. Beneficial interests in the Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants, including, with respect to the Regulation S Global Note, Thackeray Partners LLC and Ashgrove Enterprises.
No beneficial owner of any interest in a Global Note will receive a definitive certificated Note representing such beneficial owner's interest in the Notes, except in the limited circumstances expressly set forth in Section 6 of this Letter and in the Indenture. So long as DTC or its nominee is the sole registered holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes.
3.2 Compliance with DTC Requirements
The Issuer shall comply, and shall cause its agents to comply, with the Operational Arrangements of DTC (as in effect from time to time) applicable to book-entry-only securities, including, without limitation, all requirements relating to (i) the timely payment of principal, premium (if any), and interest on the Notes through the Trustee as Paying Agent, (ii) the format and content of notices to be delivered to DTC, and (iii) the provision of information reasonably required by DTC in order to maintain the eligibility of the Notes for book-entry deposit.
The Issuer acknowledges that DTC may discontinue providing its services as depositary with respect to the Notes at any time by giving reasonable notice to the Issuer or the Trustee. In the event that a successor depositary is not appointed by the Issuer within ninety (90) days after DTC provides such notice or after DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Issuer shall execute, authenticate, and deliver definitive certificated Notes in exchange for interests in the Global Notes in accordance with the terms of the Indenture.
3.3 Payments.  All payments of principal of, and premium (if any) and interest on, the Global Notes shall be made by the Trustee, as Paying Agent, to Cede & Co. (or such other nominee as DTC may direct in writing to the Trustee) by wire transfer of immediately available funds in United States dollars to such account as DTC shall specify, on each applicable payment date. The first interest payment date with respect to the Notes shall be October 15, 2022.
The Issuer acknowledges that, upon receipt of any payment of principal, premium (if any), or interest on the Global Notes by DTC, DTC will immediately credit the accounts of its participants with payments in amounts proportionate to their respective beneficial interests in the relevant Global Note, as shown on the records of DTC, in accordance with DTC's rules, regulations, and customary procedures. The Issuer further acknowledges and agrees that neither the Issuer nor the Trustee shall have any responsibility or liability for (a) any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Global Notes maintained by DTC or by any participant of DTC, (b) the maintenance, supervision, or review of any records relating to such beneficial ownership interests, or (c) any advice or representation made by or with respect to DTC relating to the rules, regulations, or procedures of DTC or any action taken by DTC or at the direction of its participants.
3.4 Notices.  The Issuer shall cause all notices, reports, and other communications to holders of the Notes required or permitted under the Indenture to be transmitted to DTC in accordance with DTC's then-applicable procedures. The Issuer acknowledges that such transmission shall constitute valid and effective notice to the holders of the Notes for all purposes under the Indenture, whether or not any particular beneficial owner of an interest in a Global Note actually receives such notice. The Issuer shall provide copies of all such notices to the Trustee simultaneously with (or prior to) delivery to DTC.
3.5 Transfer Restrictions
The Issuer represents that the Notes are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and are subject to the transfer restrictions described in the Indenture, the Offering Memorandum, and the legends set forth on the Global Notes, including, without limitation, restrictions applicable to Notes sold in reliance on Rule 144A and restrictions applicable to Notes sold in reliance on Regulation S. The Global Notes bear restrictive legends as required by the Securities Act and the applicable regulations thereunder.
The Issuer shall cooperate fully with the Trustee and DTC to effect transfers of beneficial interests between the Rule 144A Global Note and the Regulation S Global Note in accordance with the procedures established by the Indenture and DTC's Operational Arrangements, including by facilitating the delivery of certifications and opinions of counsel, if required by the Indenture, in connection with any such transfer.
Section 4. Representations Regarding the Trustee, Registrar, Transfer Agent, and Paying Agent
Northern Dominion Trust Company has been duly appointed as Registrar, Transfer Agent, and Paying Agent under the Indenture and hereby confirms that it agrees to perform the duties of each such role in accordance with the terms and conditions of the Indenture and in compliance with DTC's Operational Arrangements, as in effect from time to time.
Northern Dominion Trust Company shall serve as custodian of the Global Notes for DTC, holding the Global Notes at its Corporate Trust Office located at 101 Barclay Street, 7th Floor, New York, NY 10286, or at such other location as DTC may approve in writing. Northern Dominion Trust Company acknowledges its obligation, as custodian, to safeguard the Global Notes and to surrender or make available such Global Notes to DTC or its nominee only in accordance with the instructions of DTC and the terms of the Indenture.
Northern Dominion Trust Company shall maintain the register of holders of the Notes (the "Register") in book-entry form, with Cede & Co. (or such other nominee of DTC as may be designated from time to time) reflected as the sole registered holder of each Global Note. Entries in the Register with respect to beneficial interests in the Global Notes shall be made exclusively through the book-entry facilities of DTC and its participants.
Northern Dominion Trust Company shall, in its capacity as Paying Agent, remit all payments of principal, premium (if any), and interest on the Global Notes to DTC in immediately available funds on or before each applicable payment date, in accordance with DTC's customary procedures and the terms of the Indenture.
Section 5. DTC Operational Procedures
The Issuer and Northern Dominion Trust Company each acknowledge that DTC is a limited-purpose trust company organized under the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under Section 17A of the Exchange Act. DTC holds and provides asset servicing for securities deposited with it by its participants and facilitates the settlement of securities transactions among its participants through electronic book-entry changes in the accounts of such participants, thereby eliminating the need for physical movement of certificates.
The Issuer and Northern Dominion Trust Company acknowledge that DTC will act only on behalf of its direct and indirect participants (which include banks, broker-dealers, and other financial institutions), and that DTC's obligations relate only to such participants. Thackeray Partners LLC and Ashgrove Enterprises participate in DTC as indirect participants through their respective U.S. depositaries, and beneficial interests in the Regulation S Global Note will be held through such indirect participation arrangements.
Transfers of beneficial interests within the Rule 144A Global Note, within the Regulation S Global Note, and between the Rule 144A Global Note and the Regulation S Global Note shall be effected through DTC in accordance with DTC's Same-Day Funds Settlement System ("SDFS") and applicable rules and procedures. Settlement of transactions involving the Notes will occur on a same-day funds basis.
During the distribution compliance period under Regulation S (i.e., the forty (40)-day period commencing on the later of (x) the date the Notes are first offered to persons other than distributors and (y) the original issue date of the Notes) (the "Restricted Period"), beneficial interests in the Regulation S Global Note may be held only through Thackeray Partners LLC or Ashgrove Enterprises participants. During the Restricted Period, transfers of beneficial interests from the Regulation S Global Note to the Rule 144A Global Note may be effected only upon receipt by the Trustee of a certificate from the transferor in substantially the form set forth in the Indenture, certifying, among other things, that the proposed transfer is being made to a person that the transferor reasonably believes is a "qualified institutional buyer" within the meaning of Rule 144A, purchasing for its own account or for the account of a qualified institutional buyer, in a transaction meeting the requirements of Rule 144A.
Upon expiration of the Restricted Period, beneficial interests in the Regulation S Global Note may be transferred to the Rule 144A Global Note, and vice versa, subject to the certification requirements and other conditions set forth in the Indenture, including delivery of such certifications, opinions of counsel, and other documentation as the Trustee may reasonably require to ensure compliance with applicable securities laws. The Issuer and the Trustee shall cooperate with DTC and its participants in facilitating such transfers.
Section 6. Exchange for Definitive Certificated Notes
Notwithstanding the foregoing, the Global Notes (or any portion thereof) shall be exchangeable for definitive certificated Notes in fully registered form, without coupons, only if:
(a) DTC notifies the Issuer or the Trustee that it is unwilling or unable to continue as depositary for the Global Notes, or DTC ceases to be a clearing agency registered under the Exchange Act, and in either case, a successor depositary acceptable to the Issuer and the Trustee is not appointed within ninety (90) days after the Issuer or the Trustee receives such notice or becomes aware of such cessation, as applicable;
(b) the Issuer, in its sole discretion, delivers to the Trustee a written notice (an "Officer's Certificate") executed by an authorized officer of the Issuer stating that the Issuer has elected to cause the issuance of definitive certificated Notes in exchange for interests in the applicable Global Note; or
(c) an Event of Default (as defined in the Indenture) has occurred and is continuing with respect to the Notes, and the registered holder of a Global Note (i.e., DTC or its nominee) has requested the exchange of all or any portion of such holder's beneficial interest in the Global Note for definitive certificated Notes.
In any such case, definitive certificated Notes shall be issued in minimum denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof, registered in such names and in such denominations as DTC shall instruct the Trustee pursuant to DTC's customary procedures. Definitive certificated Notes so issued shall bear the restrictive legends regarding transfer restrictions as set forth in the Indenture and the Global Notes, as applicable, and shall otherwise be substantially in the form set forth in the applicable exhibit to the Indenture.
Upon the issuance of definitive certificated Notes, the Trustee shall cancel the corresponding Global Note (or reduce the principal amount thereof) and shall update the Register accordingly. Thereafter, the Issuer and the Trustee shall recognize each holder of a definitive certificated Note as the registered holder thereof for all purposes under the Indenture.
Section 7. Issuer's Agreements
In connection with the eligibility of the Notes for book-entry deposit and settlement through DTC, the Issuer hereby agrees as follows:
7.1 Indemnification. The Issuer agrees to indemnify and hold harmless DTC, Cede & Co. (as nominee of DTC), and their respective officers, directors, employees, and agents (collectively, the "DTC Indemnified Parties") from and against any and all losses, liabilities, claims, damages, costs, and expenses (including reasonable attorneys' fees and expenses) incurred by any DTC Indemnified Party by reason of, or arising out of, any inaccuracy in or breach of any representation, warranty, or agreement made by the Issuer in this Letter. This indemnification obligation shall survive the termination of this Letter and the payment in full of the Notes.
7.2 Information. The Issuer agrees to provide DTC and the Trustee with such information as DTC may from time to time reasonably request in connection with DTC's acceptance of the Notes for book-entry settlement and deposit, including, without limitation, information regarding the terms and conditions of the Notes, redemption or defeasance provisions, and changes to the terms of the Notes effected by supplemental indentures.
7.3 Voting and Consents. The Issuer acknowledges that neither DTC nor Cede & Co. (nor any successor nominee) will consent or vote with respect to the Notes unless authorized to do so by the beneficial owners of interests in the Global Notes. The Issuer further acknowledges that, in accordance with DTC's customary procedures, DTC will mail an omnibus proxy to the Issuer (or to the Trustee, as applicable) assigning Cede & Co.'s consenting or voting rights to those participants to whose accounts the Notes are credited on the applicable record date, and such participants shall, in turn, be responsible for soliciting and transmitting the consents or votes of the beneficial owners who hold through such participants' accounts.
7.4 Funding of Payments. The Issuer confirms that it shall deposit or cause to be deposited with the Trustee, in immediately available funds, sufficient funds for the payment of all amounts of principal, premium (if any), and interest due on the Notes no later than one (1) business day prior to each applicable payment date, all in accordance with the terms and conditions of the Indenture.
7.5 Continuing Obligations. The agreements and obligations of the Issuer set forth in this Section 7 are in addition to, and not in limitation of, the Issuer's obligations under the Indenture, the Notes, and any other agreement or instrument entered into in connection therewith.
Section 8. Miscellaneous
8.1 Amendments.  This Letter of Representations may not be amended, modified, or supplemented except by a written instrument executed by each of the Issuer, Northern Dominion Trust Company (in its capacity as Trustee, Registrar, Transfer Agent, and Paying Agent), and DTC. No waiver of any provision of this Letter shall be effective unless set forth in a written instrument signed by the party granting such waiver.
8.2 Termination.  This Letter of Representations shall terminate automatically, without further action by any party, upon the earliest to occur of (a) payment in full of all amounts of principal, premium (if any), and interest due on the Notes in accordance with the Indenture, (b) the exchange of all Global Notes for definitive certificated Notes in accordance with Section 6 hereof and the corresponding provisions of the Indenture, or (c) the defeasance or discharge of the Indenture in accordance with its terms. Notwithstanding the foregoing, the indemnification obligations of the Issuer set forth in Section 7.1 hereof shall survive any such termination.
8.3 Governing Law
This Letter of Representations shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts of law that would require the application of the laws of any other jurisdiction.
8.4 Counterparts.  This Letter of Representations may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Letter by facsimile transmission or by electronic mail in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart.
8.5 Defined Terms
Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Indenture dated as of April 19, 2022, among the Issuer, the Guarantors, and Northern Dominion Trust Company, as Trustee.
8.6 Entire Agreement
This Letter of Representations, together with the Indenture and the documents referred to herein, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements, understandings, and representations relating thereto.
8.7 Severability.  If any provision of this Letter of Representations is held to be invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
[Remainder of this page intentionally left blank; signature pages follow.]
IN WITNESS WHEREOF, the undersigned have caused this Letter of Representations to be duly executed and delivered as of the date first written above.
TORCHLIGHT MINING CORP. (Issuer)
By: ________
Name: Lianne Prokopchuk
Title: Chief Financial Officer
Torchlight Mining Corp. 2200 – 400 Burrard Street Vancouver, British Columbia V6C 3A6, Canada
ACKNOWLEDGED AND AGREED:
NORTHERN DOMINION TRUST COMPANY (as Registrar, Transfer Agent, Paying Agent, and Custodian)
By: ________
Name: Sandra Leung
Title: Vice President, Corporate Trust
Northern Dominion Trust Company 101 Barclay Street, 7th Floor New York, NY 10286
ACKNOWLEDGED:
THE DEPOSITORY TRUST COMPANY
By: ________
Name: ________
Title: Authorized Representative
The Depository Trust Company 55 Water Street New York, NY 10041
SCHEDULE A
DESCRIPTION OF SECURITIES
This Schedule A is provided for informational purposes and is qualified in its entirety by reference to the Indenture and the Global Notes. In the event of any conflict between this Schedule and the Indenture, the terms of the Indenture shall control.
Item | Description
Issuer | Torchlight Mining Corp.
Title of Securities | 8.750% Senior Secured Notes due 2029
Aggregate Principal Amount | $300,000,000
CUSIP (Rule 144A) | 891207 AA 3
ISIN (Rule 144A) | US891207AA38
CUSIP (Regulation S) | C89120 AA 5
ISIN (Regulation S) | USC89120AA58
Maturity Date | April 15, 2029
Interest Rate | 8.750% per annum
Interest Payment Dates | April 15 and October 15 of each year, commencing October 15, 2022
Record Dates | April 1 and October 1
Day Count Convention | 360-day year / 30-day months
Issue Price | 98.50% of par
Minimum Denomination | $2,000 and integral multiples of $1,000 in excess thereof
Trustee / Registrar / Transfer Agent / Paying Agent / Collateral Agent | Northern Dominion Trust Company
Corporate Trust Office | 101 Barclay Street, 7th Floor, New York, NY 10286
Governing Law | State of New York
Indenture Date | April 19, 2022
Guarantors | Wolverine Lake Mining Ltd.; Torchlight Milling & Processing Inc.; Torchlight U.S. Holdings, Inc.
Security | Senior Secured (as described in the Indenture and related Security Documents)
Offering Memorandum Date | March 14, 2022
Purchase Agreement Date | March 29, 2022
Initial Purchasers | Kelvantis Capital Markets LLC (lead initial purchaser and book-running manager); Prestige Barrington & Co., Inc.; Halcyon Securities Inc.
Form | Global Notes (Rule 144A Global Note and Regulation S Global Note), book-entry only through DTC (and, for Regulation S interests, Thackeray Partners LLC and Ashgrove Enterprises)
Depositary | The Depository Trust Company
Nominee | Cede & Co.

TORCHLIGHT MINING CORP. 2200 – 400 Burrard Street Vancouver, British Columbia V6C 3A6 Canada

LETTER OF REPRESENTATIONS

ACKNOWLEDGED AND AGREED:

ACKNOWLEDGED:

THE DEPOSITORY TRUST COMPANY

SCHEDULE A

DESCRIPTION OF SECURITIES

Record

Parties

Dates

Amounts