And I find this very interesting, as the conditions of the transaction and the SPA, clearly state secondary /chemical processing, within 5 years of the closing date of June 11 2021.
Piedmont Lithium and Sayona have agreed to guarantee the obligations of Sayona Quebec under the Assignment Agreement
That last paragraph that you posted again-
subject to the satisfaction of CERTAIN CONDITIONS CONTEMPLATED IN THE SPA AND ASSIGNMENT AGREEMENT.
page 9 D. THE PROPOSED TRANSACTION i. Description of the Proposed Transaction 17. The Proposed Transaction contemplates the acquisition by 9444-1169 Québec Inc. (the “Purchaser”), a newly incorporated wholly-owned subsidiary of SYQ of all of the issued and outstanding shares in the share capital of NAL - 9 - (the “Purchased Shares”), the whole in accordance with the terms and conditions of the definitive share purchase agreement (the “SPA”) that will be communicated under seal to the Court prior to the hearing of the present Motion. All undefined terms under this heading “D. The Proposed Transaction” shall have the meanings ascribed to them in the draft Approval and Vesting Order (Exhibit P-3).
Then head down to item 24 on page 11- ( I have highlighted below)
a) The SPA and the transactions described therein (including the vesting in the Purchaser of the Purchased Shares, with such shares and all of the Assumed Assets being free and clear of all encumbrances, except Permitted Encumbrances), and b) the Pre-Closing Reorganization (including the transfer of the Excluded Assets, Excluded Employees and the Excluded Liabilities to ResidualCo). 21. The reverse vesting order transaction structure is beneficial to the parties as it facilitates the implementation of the transaction by avoiding the steps and constraints associated with a transfer of assets, and it allows the maximization of the preservation of certain tax attributes available to NAL. 22. The consideration offered by SYQ under the Proposed Transaction consists of the following: a) the aggregate amount is equal to the sum of all amounts (including principal, interest and fees) payable to IQ as of the Closing Date pursuant to the DIP Financing, including the Interim Advances; b) payment of arrears of 2021 municipal taxes owing by NAL to the city of La Corne (estimated to $413,000 as at November 27, 2021) c) full repayment of CATL’s senior secured debt of $40,000,000 plus accrued interest (total in capital and interest of approximately $47,000,000) shall be - 10 - paid on Closing by the Purchaser to CATL by wire transfer of immediately available funds. As mentioned above, the Monitor sought and obtained clarification from SYQ that the transaction contemplated under the Conditional IQ Option of the SYQ Proposal contemplated the full reimbursement of CATL in capital and accrued interest; d) the assumption by the Purchaser of the following Assumed Liabilities: i) all of the indebtedness, including in principal amount and accrued interest, of NAL owing to IQ pursuant to (i) IQ’s first ranking secured debt in an aggregate principal amount of approximately $36,000,000, and (ii) IQ’s second ranking secured debt in an aggregate principal amount of approximately $63,000,000; ii) all Liabilities (relating to the Assumed Assets accruing and arising from and after the Closing Time; iii) all Environmental Liabilities, including the obligations associated with the financial guarantees that are required to be provided to the MERN in an amount of CDN$25.6 million; iv) all Liabilities under the Assumed Contracts, the Permits and, the Licenses (in each case to the extent such Assumed Contract or Permit and License is effectively assigned to the Purchaser) accruing and arising from and after the Closing Time; v) any obligation secured by the Notice of Legal Hypothec by J. Y Moreau Électrique Inc. (“Moreau Électrique”) dated May 27, 2019 for an amount of $385,281.10, legal fees and taxes, and registered at the Land Register under number 24 649 971 solely for, and limited to, the portion of such obligation secured by such hypothec, as the case may be. vi) any obligation secured by the Notice of Legal Hypothec by 2950- 0519 Québec Inc. (an affiliate of Moreau Électrique) dated May 27, 2019 for an amount of $367,997.36, legal fees and taxes, and registered at the Land Register under number 24 649 972 solely for, and limited to, the portion of such obligation secured by such hypothec, as the case may be. vii) all Liabilities with respect to the Assumed Employees and the Employee Plans of the Assumed Employees; viii) the Cure Costs, if any, with respect to the Assumed Contracts. 23. Taking into consideration the face value of IQ’s senior and subordinated secured debts, which are assumed in full by the Purchased further to the exercise of the Conditional IQ Option, the Proposed Transaction offers a consideration totalling approximately $196,000,000. - 11 - 24. In addition to the financial considerations provided by the Proposed Transaction, the SYQ Proposal also sets out the following: a) SYA’s and PLL’s vision of creating an integrated lithium or mining and spodumene concentrate operation that combines NAL with SYQ’s Authier and Tansim projects; b) SYA and PLL are committed to carry out secondary processing of lithium in Québec within the next five years, which will be supplied with lithium spodumene concentrate produced from the integrated NAL, Authier and Tansim projects; c) SYQ has significantly advanced the technical analysis and capital budgeting; and d) SYQ’s commitment to continue doing business with the suppliers located in the Abitibi communities, where the NAL operations are located, the Abitibi region, and the province of Québec generally.
So why the board is not taking the bull by the horns and enforcing the conditions set out in the Share Purchase Agreement, is beyond me.
Paragraph 24 clearly states as a condition-
The SYQ( PLL/SYA) proposal also sets out the following- b) SYA and PLL are committed to carry out secondary processing of lithium in Québec within the next five years, which will be supplied with lithium spodumene concentrate produced from the integrated NAL, Authier and Tansim projects;
(20min delay)
