EXHIBIT 4.2
UNDERWRITING AGREEMENT
December 16, 2003
International Uranium Corporation
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
ATTENTION: XXX X. XXXXXXXXX, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Sirs:
The undersigned, GMP Securities Ltd. (the "Lead Underwriter"), Dundee Securities
Corporation and Toll Cross Securities Inc. (collectively, the "Underwriters"),
understand that International Uranium Corporation (the "Corporation") proposes
to create, issue and sell (the "Offering") common shares of the Corporation (the
"Common Shares") subject to the terms and conditions set out below.
Upon and subject to the terms and conditions set forth herein, the Underwriters
hereby agree to act as underwriters and purchase from the Corporation 6,000,000
Common Shares (the "Offered Shares"), or to arrange for substituted purchasers
for the Offered Shares resident in the Qualifying Provinces (as hereinafter
defined) and in those jurisdictions outside of Canada consented to by the
Corporation where the Offered Shares may be lawfully sold pursuant to the terms
and conditions hereof, at a price of $1.50 per Common Share (the "Purchase
Price") for an aggregate purchase price of $9,000,000. The parties acknowledge
that the Offered Shares have not been and will not be registered under the U.S.
Securities Act (as hereinafter defined). The Underwriters are hereby also
granted an option (the "Underwriters' Option") by the Corporation to arrange for
the sale, on a "best efforts" agency basis, of up to an additional 700,000
Common Shares (the "Optioned Shares") at the Purchase Price, which Underwriters'
Option may be exercised, in whole or in part, by notice in writing at any time
prior to 9:00 a.m. (Toronto time) on the Business Day (as hereinafter defined)
prior to the Closing Date (as hereinafter defined). For greater certainty, the
Underwriters are under no obligation whatsoever to exercise the Underwriters'
Option. Unless otherwise specifically referenced or unless the context otherwise
requires, all references to Common Shares herein shall include the Offered
Shares and the Optioned Shares.
The Underwriters shall be entitled to appoint a soliciting dealer group
consisting of other registered dealers acceptable to the Corporation for the
purposes of arranging for purchasers of the Common Shares.
In consideration of the services to be rendered by the Underwriters in
connection with their services hereunder and all other matters in connection
with the issue and sale of the Common Shares, the Corporation shall pay to the
Underwriters at Closing (as hereinafter defined) a cash commission (the
"Commission") equal to 6.0% of the gross proceeds realized by the Corporation in
respect of the sale of the Common Shares. The obligation of the Corporation to
pay the
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Commission shall arise at the Closing Time (as hereinafter defined) and
the Commission shall be fully earned by the Underwriters at that time.
DEFINITIONS
In this Agreement, in addition to the terms defined above or elsewhere in this
Agreement, the following terms shall have the following meanings:
"AGREEMENT" means the agreement resulting from the acceptance by the Corporation
of the offer made hereby;
"BUSINESS DAY" means a day which is not a Saturday, Sunday or statutory or civic
holiday in the City of Toronto, Canada;
"CLAIM" shall have the meaning ascribed thereto in subparagraph 9(b);
"CLOSING" means the closing on the Closing Date of the transaction of purchase
and sale in respect of the Common Shares as contemplated by this Agreement and
the Subscription Agreements;
"CLOSING DATE" means December 16, 2003 or such other date as the Corporation and
the Lead Underwriter may agree;
"CLOSING TIME" means 9:00 a.m. (Toronto time) on the Closing Date or such other
time on the Closing Date as the Corporation and the Lead Underwriter may agree;
"COMMON SHARES" means the common shares in the capital of the Corporation which
the Corporation is authorized to issue as constituted on the date hereof;
"CORPORATION'S AUDITORS" means PricewaterhouseCoopers LLP, or such other firm of
chartered accountants as the Corporation may have appointed or may from time to
time appoint as auditors of the Corporation;
"DISCLOSURE DOCUMENTS" means all publicly available press releases, material
change reports, financial statements and other documents (including, without
limitation, the annual information form of the Corporation for the year ended
September 30, 2002) that have been disclosed by the Corporation and its
Subsidiaries to the public and filed with the Securities Regulators pursuant to
applicable Securities Laws or otherwise posted on SEDAR;
"ENGAGEMENT LETTER" means the letter agreement dated December 1, 2003 between
the Corporation and the Underwriters relating to the Offering;
"INDEMNIFIED PARTY" shall have the meaning ascribed thereto in subparagraph
9(a);
"LAZY XXXXXX BAY URANIUM PROPERTY" means the exploration property in
Saskatchewan, Canada in which the Corporation holds an option to acquire a 75%
interest;
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"MATERIAL ADVERSE EFFECT" when used in connection with an entity means any
change, event, violation, inaccuracy, circumstance or effect that is materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition or results of operations of such entity and its parent (if
applicable) or subsidiaries taken as a whole;
"MINING RIGHTS" shall have the meaning ascribed thereto in subparagraph
3(a)(vi);
"MISREPRESENTATION", "MATERIAL FACT", "MATERIAL CHANGE", "AFFILIATE",
"ASSOCIATE", and "DISTRIBUTION" shall have the respective meanings ascribed
thereto in the Securities Act (Ontario);
"XXXXX LAKE URANIUM PROPERTY" means the exploration property in Saskatchewan,
Canada in which the Corporation holds an option to acquire a 75% interest;
"MULTILATERAL INSTRUMENT" means Multilateral Instrument 45-102 "Resale of
Securities";
"PERSON" shall be broadly interpreted and shall include any individual,
corporation, partnership, joint venture, association, trust or other legal
entity;
"PURCHASERS" means the Persons (which may include the Underwriters) who, as
purchasers, acquire Common Shares by duly completing, executing and delivering
the Subscription Agreements;
"QUALIFYING ISSUER" shall have the meaning ascribed thereto in section 1.1 of
the Multilateral Instrument;
"QUALIFYING PROVINCES" means, collectively, the provinces of British Columbia,
Alberta and Ontario;
"SECURITIES LAWS" means, unless the context otherwise requires, all applicable
securities laws in each of the Qualifying Provinces and the respective
regulations made thereunder, together with applicable published fee schedules,
prescribed forms, policy statements, orders, blanket rulings and other
regulatory instruments of the Securities Regulators in such jurisdictions;
"SECURITIES REGULATORS" means, collectively, the securities regulators or other
securities regulatory authorities in the Qualifying Provinces;
"SUBSCRIPTION AGREEMENTS" means, collectively, the subscription agreements in
the form agreed upon by the Underwriters and the Corporation pursuant to which
Purchasers agree to subscribe for and purchase the Common Shares as contemplated
herein and shall include, for greater certainty, all schedules and exhibits
thereto;
"SUBSIDIARY" shall have the meaning ascribed thereto in the Business
Corporations Act (Ontario);
"SUBSIDIARY" shall have the meaning ascribed thereto in subparagraph 3(a)(ii);
"TSX" means the Toronto Stock Exchange;
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"UNITED STATES" means the Unites States of America as defined in Regulation S
under the U.S. Securities Act;
"U.S. PERSON" means a U.S. person as that term is defined in Rule 902(k) of
Regulation S under the U.S. Securities Act; and
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
TERMS AND CONDITIONS
1. (a) SALE ON EXEMPT BASIS. The Corporation understands that, although
the offer to act as underwriters with respect to the Offered Shares is made
hereunder by the Underwriters as purchasers, the Underwriters will endeavour to
arrange for substituted Purchasers for the Offered Shares resident in the
Qualifying Provinces and in such other jurisdictions outside of Canada agreed to
by the Corporation provided the sale of the Offered Shares to such Purchasers is
exempt from any prospectus or offering memorandum filing or delivery requirement
or similar requirement of applicable securities laws and is otherwise in
compliance with all applicable Securities Laws and all applicable securities
laws of such other jurisdictions. Upon exercise of the Underwriters' Option and
subject to the terms hereof, the Corporation agrees to appoint the Underwriters
to act as agent to the Corporation to effect the sale of the Optioned Shares at
the Purchase Price on behalf of the Corporation on a "best efforts" basis to
Purchasers resident in the Qualifying Provinces and in such other jurisdictions
outside of Canada agreed to by the Corporation provided the sale of the Optioned
Shares to such Purchasers is exempt from any prospectus or offering memorandum
filing or delivery requirement or similar requirement of applicable securities
laws and is otherwise in compliance with all applicable Securities Laws and all
applicable securities laws of such other jurisdictions. For greater certainty,
the Underwriters are under no obligation to exercise the Underwriters' Option.
The Underwriters shall notify the Corporation with respect to the identity and
jurisdiction of residence of each substituted Purchaser as soon as practicable
(and in any event not later than on the Business Day prior to the Closing Date).
(b) FILINGS. The Corporation undertakes to file or cause to be filed all
forms or undertakings required to be filed by the Corporation in connection with
the purchase and sale of the Common Shares so that the distribution of the
Common Shares may lawfully occur without the necessity of filing a prospectus, a
registration statement or an offering memorandum in Canada (but on terms that
will permit Common Shares acquired by the Purchasers in the Qualifying Provinces
to be sold by such Purchasers in the Qualifying Provinces subject to, and in
compliance with, applicable hold periods and other restrictions under Securities
Laws), and the Underwriters undertake to cause Purchasers to complete any forms
required by Securities Laws or other applicable securities laws and by the TSX.
All fees payable in connection with such filings under all applicable securities
laws shall be at the expense of the Corporation.
(c) NO OFFERING MEMORANDUM. Neither the Corporation nor the Underwriters
shall (i) provide to prospective Purchasers any document or other material that
would constitute an offering memorandum within the meaning of Securities Laws,
or (ii) engage in any form of general solicitation or general advertising in
connection with the offer and sale of the Common
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Shares, including but not limited to, causing the sale of the Common Shares to
be advertised in any newspaper, magazine, printed public media, printed media or
similar medium of general and regular paid circulation, broadcast over radio,
television or telecommunications, including electronic display, or conduct any
seminar or meeting relating to the offer and sale of the Common Shares whose
attendees have been invited by general solicitation or advertising.
2. COVENANTS. The Corporation hereby covenants to the Underwriters and to
the Purchasers and their permitted assigns, and acknowledges that each of them
is relying on such covenants in purchasing the Common Shares, that the
Corporation shall:
(i) allow the Underwriters and their representatives to conduct all
due diligence regarding the Corporation and its subsidiaries which
the Underwriters may reasonably require to be conducted prior to
the Closing Date;
(ii) for a period of 12 months after the Closing Date, use its
commercially reasonable best efforts to maintain its status as a
"reporting issuer" under Securities Laws of the Province of
Ontario not in default of any requirement of such Securities Laws;
(iii) duly execute and deliver the Subscription Agreements at the
Closing Time, and comply with and satisfy all terms, conditions
and covenants therein contained to be complied with or satisfied
by the Corporation;
(iv) use its commercially reasonable best efforts to fulfil or cause to
be fulfilled, at or prior to the Closing Date, each of the
conditions required to be fulfilled by it set out in Section 5;
(v) ensure that the Common Shares shall be duly issued as fully paid
and non-assessable shares in the capital of the Corporation on
payment of the purchase price therefor;
(vi) use its commercially reasonable best efforts to ensure that the
Common Shares are listed and posted for trading on the TSX;
(vii) use the net proceeds of the Offering toward uranium exploration in
the Athabasca Basin of Northern Saskatchewan as well as for
general working capital purposes; and
(viii) for a period of 120 days following the Closing Date, not sell or
issue, or negotiate or enter into any agreement to sell or issue,
any Common Shares of the Corporation or any securities convertible
into or exchangeable for or exercisable to acquire Common Shares
of the Corporation (other than the grant of options pursuant to
the Corporation's stock option plan or the issuance of securities
on the exercise of granted options, warrants or other securities
of the Corporation outstanding at the date of the Engagement
Letter), without the consent of the Lead Underwriter, such consent
not to be unreasonably withheld.
3. (a) REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
represents and warrants to the Underwriters and to the Purchasers, and
acknowledges that each
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of them is relying upon such representations and warranties in purchasing the
Common Shares, that:
(i) the Corporation and each of the Subsidiaries is a corporation or
company duly formed, incorporated, continued or amalgamated and
validly existing under the laws of the jurisdiction in which it was
formed, incorporated, continued or amalgamated, as the case may be,
has all requisite corporate power and authority and is duly
qualified and holds all necessary material permits, licences and
authorizations necessary or required to carry on its business as now
conducted and to own, lease or operate its properties and assets and
no steps or proceedings have been taken by any person, voluntary or
otherwise, requiring or authorizing its dissolution or winding up,
and the Corporation has all requisite power and authority to enter
into each of this Agreement and, the Subscription Agreements and to
carry out its obligations hereunder and thereunder;
(ii) the Corporation has no material subsidiaries other than the
following subsidiaries, (collectively, the "Subsidiaries"):
SUBSIDIARIES CORPORATE JURISDICTION PERCENTAGE OWNERSHIP
------------ ---------------------- --------------------
International Uranium Holdings Delaware 100%
Corporation
International Uranium (USA) Delaware 100%
Corporation
International Uranium Recovery Delaware 100%
Corporation
Urizon Recovery Systems, LLC Delaware 50%
IUC White Mesa LLC Colorado 100%
IUC Sunday Mine LLC Colorado 100%
IUC Colorado Plateau LLC Colorado 100%
IUC Arizona Strip LLC Colorado 100%
IUC Exploration LLC Colorado 100%
IUC Recovery LLC Colorado 100%
International Uranium (Bermuda I) Ltd. Bermuda 100%
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SUBSIDIARIES CORPORATE JURISDICTION PERCENTAGE OWNERSHIP
------------ ---------------------- --------------------
International Uranium (Bermuda II) Bermuda 100%
Ltd.
International Uranium Company Bermuda 100%
(Mongolia) Ltd.
Gurvan Saihan Joint Venture XXK Mongolia 70%
Shiveengol XXK Mongolia 100%
Mongol Resources Exploration XXK Mongolia 100%
International Uranium (Sask) Ontario 100%
Corporation
(iii) the Corporation owns, directly or indirectly, the percentage of
issued and outstanding shares of each of the Subsidiaries set out in
paragraph 3(a)(ii) above, all of the issued and outstanding shares
of the Subsidiaries are issued as fully paid and non-assessable
shares, in each case free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances, claims or
demands whatsoever and no person, firm or corporation has any
agreement, option, right or privilege (whether pre-emptive or
contractual) capable of becoming an agreement, for the purchase from
the Corporation or any of its Subsidiaries of any interest in any of
the shares in the capital of any of the Subsidiaries except for the
right of first refusal and other rights to acquire the Corporation's
interest in Urizon Recovery Systems, LLC granted to the
Corporation's joint venture partner in Article 11 of the operating
agreement of Urizon Recovery Systems, LLC dated October 18, 2002;
(iv) the Corporation and each of its Subsidiaries holds all requisite
licences, registrations, qualifications, permits and consents
necessary or appropriate for carrying on its business as currently
carried on and all such licences, registrations, qualifications,
permits and consents are valid and subsisting and in good standing
in all material respects except where the failure to hold such
licences, registrations, qualifications, permits and consents would
not have a Material Adverse Effect on the Corporation or any
Subsidiary. In particular, without limiting the generality of the
foregoing, neither the Corporation nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
adverse modification of any material mining or exploration permit or
licence, nor have any of them received notice of the revocation or
cancellation of, or any intention to revoke or cancel, any mining
claims, groups of claims, exploration rights, concessions or leases
with respect to any of the resource properties
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described in the Disclosure Documents where such revocation or
cancellation would have a Material Adverse Effect on the Corporation
or any Subsidiary;
(v) except as disclosed in the Disclosure Documents, the Corporation and
the Subsidiaries are the absolute legal and beneficial owners of,
and have good and marketable title to, all of the material property
or assets thereof as described in the Disclosure Documents, and no
other Mining Rights are necessary for the conduct of the business of
the Corporation or any Subsidiary as currently conducted, none of
the Corporation or any Subsidiary knows of any claim or the basis
for any claim that might or could materially and adversely affect
the right thereof to use, transfer or otherwise exploit such Mining
Rights and, except as disclosed in the Disclosure Documents and, in
the case of the material Mining Rights, as disclosed in Schedule "A"
hereto, none of the Corporation or any Subsidiary has any
responsibility or obligation to pay any material commission,
royalty, licence fee or similar payment to any person with respect
to the Mining Rights thereof other than the customary mineral estate
owner production royalty payments on certain properties;
(vi) the Corporation and its Subsidiaries hold either freehold title,
mining leases, mining concessions, mining claims, options or
participating interests or other conventional property or
proprietary interests or rights, recognized in the jurisdiction in
which a particular property is located (collectively, "Mining
Rights"), in respect of the ore bodies, minerals and metals located
in properties in which the Corporation and the Subsidiaries have an
interest as described in the Disclosure Documents under valid,
subsisting and enforceable title documents or other recognized and
enforceable agreements or instruments, sufficient to permit the
Corporation or the applicable Subsidiary to explore the minerals
relating thereto; all property, options, leases or claims in which
the Corporation or any Subsidiary has an interest or right have been
validly located and recorded in accordance in all material respects
with all applicable laws and are valid and subsisting except where
the failure to be so would not have a Material Adverse Effect on the
Corporation or any Subsidiary; the Corporation and the Subsidiaries
have all necessary surface rights, access rights and other necessary
rights and interests relating to the properties in which the
Corporation and the Subsidiaries have an interest as described in
the Disclosure Documents granting the Corporation or applicable
Subsidiary the right and ability to explore for minerals, ore and
metals (including Uranium) for development purposes as are
appropriate in view of the rights and interest therein of the
Corporation or the applicable Subsidiary, with only such exceptions
as do not interfere with the use made by the Corporation or the
applicable Subsidiary of the rights or interest so held; and each of
the proprietary interests or rights and each of the documents,
agreements and instruments and obligations relating thereto referred
to above is currently in good standing in the name of the
Corporation or a Subsidiary. The Mining Rights in respect of the
Corporation's properties, as disclosed in Schedule "A" hereto,
constitute a description of all material Mining Rights held by the
Corporation and its Subsidiaries;
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(vii) the Corporation is a reporting issuer under the Securities Laws of
the Province of
Ontario is not in default of any requirement of
such Securities Laws and the Corporation is not included on a list
of defaulting reporting issuers maintained by the
Ontario
Securities Commission;
(viii) on the Closing Date, the Corporation will be a Qualifying Issuer.
The Common Shares will not be subject to a restricted period or to
a statutory hold period under the Securities Laws or to any resale
restriction under the policies of the TSX which extends beyond
four months and one day after the Closing Date;
(ix) each of the execution and delivery of this Agreement and the
Subscription Agreements, the performance by the Corporation of its
obligations hereunder or thereunder, the issue and sale of the
Common Shares hereunder and the consummation of the transactions
contemplated in this Agreement, including the issuance and
delivery of the Common Shares, do not and will not conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (whether after
notice or lapse of time or both), (A) any statute, rule or
regulation applicable to the Corporation including, without
limitation, the Securities Laws of the Qualifying Provinces and
the rules and regulations of the TSX; (B) the constating
documents, by-laws or resolutions of the Corporation which are in
effect at the date hereof; (C) any mortgage, note, indenture,
contract, agreement, joint venture, partnership, instrument,
option, lease or other document to which the Corporation is a
party or by which it is bound; or (D) any judgment, decree or
order binding the Corporation or the Subsidiaries or the property
or assets of the Corporation or the Subsidiaries;
(x) in particular and without limiting the foregoing, since September
30, 2002, the Corporation and the Subsidiaries have been in
compliance with their timely and continuous disclosure obligations
under the Securities Laws of the Province of
Ontario and the rules
and regulations of the TSX and, without limiting the generality of
the foregoing, there has not occurred any material adverse change,
financial or otherwise, in the assets, liabilities (contingent or
otherwise), business, financial condition, capital or prospects of
the Corporation and the Subsidiaries (taken as a whole) since
September 30, 2002, which has not been publicly disclosed on a
non-confidential basis and all the statements set forth in the
Disclosure Documents were true, correct, and complete in all
material respects and did not contain any misrepresentation as of
the date of such statements and the Corporation and the
Subsidiaries have not filed any confidential material change
reports since the date of such statements which remains
confidential as at the date hereof;
(xi) except as disclosed in the Disclosure Documents or as contemplated
herein, none of the Corporation or any Subsidiary has approved, is
contemplating, has entered into any agreement in respect of, or
has any knowledge of:
(A) the purchase of any property or assets or any interest
therein or the sale, transfer or other disposition of any
property or assets or any interest
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therein currently owned, directly or indirectly, by the
Corporation or any Subsidiary whether by asset sale,
transfer of shares or otherwise;
(B) the change of control (by sale or transfer of shares or sale
of all or substantially all of the property and assets of
the Corporation or any Subsidiary or otherwise) of the
Corporation or any Subsidiary; or
(C) a proposed or planned disposition of shares by any
shareholder who owns, directly or indirectly, 10% or more of
the outstanding shares of the Corporation or any Subsidiary;
(xii) the audited comparative financial statements of the Corporation as
at and for the year ended September 30, 2002, (the "Audited
Financial Statements") and the unaudited financial statements of
the Corporation as at and for the nine month period ended June 30,
2003 have been prepared in accordance with generally accepted
accounting principles in Canada and present fully, fairly and
correctly in all material respects, the financial condition of the
Corporation as at the dates thereof and the results of the
operations and the changes in the financial position of the
Corporation for the periods then ended and contain and reflect
adequate provisions or allowance for all reasonably anticipated
liabilities, expenses and losses of the Corporation and there has
been no change in accounting policies or practices of the
Corporation since September 30, 2002, except as has been publicly
disclosed in the Disclosure Documents;
(xiii) except as disclosed in the Audited Financial Statements, all taxes
(including income tax, capital tax, payroll taxes, employer health
tax, workers' compensation payments, property taxes, custom and
land transfer taxes), duties, royalties, levies, imposts,
assessments, deductions, charges or withholdings and all
liabilities with respect thereto including any penalty and
interest payable with respect thereto (collectively, "Taxes") due
and payable by the Corporation and the Subsidiaries have been
paid, except where the failure to pay such taxes would not
constitute an adverse material fact in respect of the Corporation
or any Subsidiary or have a Material Adverse Effect on the
Corporation or any Subsidiary. All tax returns, declarations,
remittances and filings required to be filed by the Corporation
and the Subsidiaries have been filed with all appropriate
governmental authorities and all such returns, declarations,
remittances and filings are complete and accurate and no material
fact or facts have been omitted therefrom which would make any of
them misleading, except where the failure to file such documents
would not constitute an adverse material fact in respect of the
Corporation or have a Material Adverse Effect on the Corporation
or any Subsidiary. To the best of the knowledge of the
Corporation, no examination of any tax return of the Corporation
or any Subsidiary is currently in progress and there are no issues
or disputes outstanding with any governmental authority respecting
any taxes that have been paid, or may be payable, by the
Corporation or any Subsidiary, in any case, except where such
examinations, issues or disputes would not constitute an adverse
material fact in respect of the Corporation or have a Material
Adverse Effect on the Corporation or any Subsidiary;
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(xiv) the Corporation's Auditors who audited the financial statements of
the Corporation for the year ended September 30, 2002 and who
provided their audit report thereon are independent public
accountants as required under applicable Securities Laws and there
has never been a reportable disagreement (within the meaning of
National Policy Statement 31) between the Corporation and such
auditor;
(xv) as at the Closing Date, except as contemplated by this Agreement
and as disclosed in Schedule "B" hereto, no holder of outstanding
shares in the capital of the Corporation will be entitled to any
pre-emptive or any similar rights to subscribe for any Common
Shares or other securities of the Corporation and no rights,
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares in the capital of the Corporation are
outstanding;
(xvi) except as disclosed in the Disclosure Documents, no legal or
governmental proceedings or inquiries are pending to which the
Corporation, or any of its Subsidiaries, is a party or to which
its property is subject that would result in the revocation or
modification of any material certificate, authority, permit or
license necessary to conduct the business now owned or operated by
the Corporation and its Subsidiaries which, if the subject of an
unfavourable decision, ruling or finding would have a Material
Adverse Effect on the Corporation or any Subsidiary and, to the
knowledge of the Corporation, no such legal or governmental
proceedings or inquiries have been threatened against or are
contemplated with respect to the Corporation or its Subsidiaries
or with respect to their properties;
(xvii) none of the Corporation nor its Subsidiaries is in violation of
its constating documents or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, trust deed,
mortgage, loan agreement, note, option, lease or other agreement
or instrument to which it is a party or by which it or its
property may be bound;
(xviii) the Corporation and each of its Subsidiaries owns or has the right
to use under license, sub-license or otherwise all material
intellectual property used by the Corporation and its Subsidiaries
in its business, including copyrights, industrial designs, trade
marks, trade secrets, know how and proprietary rights, free and
clear of any and all encumbrances;
(xix) any and all of the agreements and other documents and instruments
pursuant to which the Corporation and its Subsidiaries hold the
property and assets thereof (including any interest in, or right
to earn an interest in, any property) are valid and subsisting
agreements, documents or instruments in full force and effect,
enforceable in accordance with terms thereof, neither the
Corporation nor any Subsidiary is in default of any of the
material provisions of any such agreements, documents or
instruments nor has any such default been alleged and such
properties and assets are in good standing under the applicable
statutes and regulations of the jurisdictions in which they are
situated, all leases, licences and claims pursuant to which the
Corporation or any Subsidiary derive the interests thereof in such
property and assets are in good standing and there has been no
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material default under any such lease, licence or claim. None of
the properties (or any interest in, or right to earn an interest
in, any property) of the Corporation or any Subsidiary is subject
to any right of first refusal or purchase or acquisition right
which is not disclosed in the Disclosure Documents except for the
right of first refusal to acquire the White Mesa Mill on certain
sales of the mill by the Corporation, granted to the Corporation's
Urizon Recovery Systems, LLC joint venture partner in Section 28
of the Toll Milling Agreement between IUC White Mesa LLC, Urizon
Recovery Systems, LLC and Nuclear Fuel Services, Inc. dated
October 18, 2002;
(xx) at the Closing Time, each of this Agreement and the Subscription
Agreements shall have been duly authorized and executed and
delivered by the Corporation and upon such execution and delivery
each shall constitute a valid and binding obligation of the
Corporation and each shall be enforceable against the Corporation
in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting the rights of creditors
generally and except as limited by the application of equitable
principals when equitable remedies are sought, and by the fact
that rights to indemnity, contribution and waiver, and the ability
to sever unenforceable terms, may be limited by applicable law;
(xxi) at the Closing Time, all necessary corporate action will have been
taken by the Corporation to allot and authorize the issuance of
the Common Shares as fully paid and non-assessable shares in the
capital of the Corporation;
(xxii) the common shares in the capital of the Corporation are listed and
posted for trading on the TSX and all necessary notices and
filings have been made with and all necessary consents, approvals
and authorizations obtained by the Corporation from the TSX to
ensure that, subject to fulfilling the conditions contained in a
letter from the TSX dated December 1, 2003 in connection with the
conditional acceptance of the Offering, the Offered Shares and
Optioned Shares will be listed and posted for trading on the TSX
upon their issuance;
(xxiii) no order, ruling or determination having the effect of suspending
the sale or ceasing the trading in any securities of the
Corporation (including the Offered Shares and Optioned Shares) has
been issued by any regulatory authority and is continuing in
effect and no proceedings for that purpose have been instituted
or, to the knowledge of the Corporation, are pending, contemplated
or threatened by any regulatory authority;
(xxiv) the authorized capital of the Corporation consists of an unlimited
number of common shares of which, as at the close of business on
December [15], 2003, 70,970,066 Common Shares were issued and
outstanding as fully paid and non-assessable shares in the capital
of the Corporation;
(xxv) other than as set out in the Disclosure Documents, the Corporation
has not made any loans to or guaranteed the obligations of any
person other than the Subsidiaries;
- 13 -
(xxvi) with respect to each premises of the Corporation or its
Subsidiaries which is material to the Corporation and its
Subsidiaries on a consolidated basis and which the Corporation or
any of its Subsidiaries occupies as tenant (the "Leased
Premises"), the Corporation or such Subsidiary occupies the
Leased Premises and has the exclusive right to occupy and use the
Leased Premises and each of the leases pursuant to which the
Corporation and/or its Subsidiaries occupies the Leased Premises
is in good standing and in full force and effect;
(xxvii) the Corporation and each Subsidiary is in compliance with all
laws respecting employment and employment practices, terms and
conditions of employment, pay equity and wages, except where
non-compliance with such laws could not reasonably be expected to
have a Material Adverse Effect on the Corporation or any
Subsidiary, and has not and is not engaged in any unfair labour
practice;
(xxviii) there has not been in the last two years and there is not
currently any labour disruption or conflict which could
reasonably be expected to have a Material Adverse Effect on the
Corporation or any Subsidiary;
(xxix) other than as disclosed in the Disclosure Documents, to the
knowledge of the Corporation, none of the directors, officers or
employees of the Corporation or any associate or affiliate of any
of the foregoing had or has any material interest, direct or
indirect, in any material transaction or any proposed material
transaction with the Corporation or its Subsidiaries which, as
the case may be, materially affects, is material to or will
materially affect the Corporation or any Subsidiary;
(xxx) the assets of the Corporation and its Subsidiaries and their
business and operations are insured against loss or damage with
responsible insurers on a basis consistent with insurance
obtained by reasonably prudent participants in comparable
businesses, and such coverage is in full force and effect, and
the Corporation has not failed to promptly give any notice of any
material claim thereunder;
(xxxi) Computershare Trust Company of Canada at its principal offices in
the City of Vancouver has been duly appointed as registrar and
transfer agent for the Common Shares;
(xxxii) the minute books and records of the Corporation and its
Subsidiaries made available to counsel for the Underwriters in
connection with its due diligence investigation of the
Corporation and its Subsidiaries for the periods from their
respective dates of incorporation to the date hereof except as
otherwise disclosed to counsel to the Underwriters are all of the
minute books and records of the Corporation and its Subsidiaries,
respectively, and contain copies of all material proceedings (or
certified copies thereof or drafts thereof pending approval) of
the shareholders, the directors and all committees of directors
of the Corporation and its Subsidiaries to the date of review of
such corporate records and minute books and there have been no
other meetings, resolutions or proceedings of the shareholders,
directors or any committees of the directors of the Corporation
or any of its Subsidiaries to the date hereof not reflected in
such minute books and
- 14 -
other records, other than those which have been disclosed to the
Underwriters or which are not material in the context of the
Corporation and its Subsidiaries, on a consolidated basis;
(xxxiii) other than as disclosed in the Disclosure Documents, neither the
Corporation nor any of its subsidiaries has been in material
violation of, in connection with the ownership, use, maintenance
or operation of its property and assets, including the Leased
Premises, any applicable federal, provincial, state, municipal or
local laws, by-laws, regulations, orders, policies, permits,
licences, certificates or approvals having the force of law,
domestic or foreign, relating to environmental, health or safety
matters including, without limitation, any rules and regulations
of the United States Nuclear Regulatory Commission (collectively
the "Environmental Laws") which would have a Material Adverse
Effect on the Corporation or any of its Subsidiaries;
(xxxiv) without limiting the generality of paragraph (xxxiii) immediately
above, other than as disclosed in the Disclosure Documents, the
Corporation and each of its Subsidiaries, do not have any
knowledge of, and have not received any notice of, any material
claim, judicial or administrative proceeding, pending or
threatened against, or which may affect, either the Corporation
or any Subsidiary or any of the property, assets or operations
thereof, relating to, or alleging any violation of any
Environmental Laws, the Corporation is not aware of any facts
which could give rise to any such claim or judicial or
administrative proceeding and neither the Corporation nor any
Subsidiary nor any of the property, assets or operations thereof
is the subject of any investigation, evaluation, audit or review
by any Governmental Authority (which term means and includes,
without limitation, any national, federal government, province,
state, municipality or other political subdivision of any of the
foregoing, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by
any of the foregoing) to determine whether any violation of any
Environmental Laws has occurred or is occurring or whether any
remedial action is needed in connection with a release of any
contaminant into the environment, except for compliance
investigations conducted in the normal course by any Governmental
Authority, in each case which could reasonably be expected to
have a Material Adverse Effect on the Corporation or any of its
Subsidiaries;
(xxxv) other than as disclosed in the Disclosure Documents, there are no
orders, rulings or directives issued, pending or, to the best of
the Corporation's knowledge reasonably held, being based on due
direction and enquiry of its personnel and advisors, threatened
against the Corporation or any of its Subsidiaries under or
pursuant to any Environmental Laws requiring any work, repairs,
construction or capital expenditures with respect to the property
or assets of the Corporation or any of its Subsidiaries
(including the Leased Premises) which would have a Material
Adverse Effect on the Corporation or any of its Subsidiaries;
- 15 -
(xxxvi) other than as disclosed in the Disclosure Documents, the
Corporation and its subsidiaries are not subject to any
contingent or other liability relating to the restoration or
rehabilitation of land, water or any other part of the
environment (except for those derived from normal exploration
activities) or non-compliance with Environmental Law which could
reasonably be expected to have a Material Adverse Effect on the
Corporation or any of its Subsidiaries; and
(xxxvii) other than the Underwriters, there is no person acting or
purporting to act at the request or on behalf of the Corporation
that is entitled to any brokerage or finder's fee in connection
with the transactions contemplated by this Agreement.
(b) REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE UNDERWRITERS. Each of
the Underwriters hereby represents, warrants and covenants severally and not
jointly to the Corporation, and acknowledges that the Corporation is relying
upon such representations and warranties, that:
(i) in respect of the offer and sale of the Common Shares, the
Underwriters and their agents and representatives will comply with
all Securities Laws and all applicable laws of the jurisdictions
outside Canada in which they offer Common Shares;
(ii) the Underwriters and their agents and representatives have not
engaged in or authorized, and will not engage in or authorize, any
form of general solicitation or general advertising in connection
with or in respect of the Common Shares in any newspaper,
magazine, printed media of general and regular paid circulation or
any similar medium, or broadcast over radio or television or by
means of the Internet or otherwise or conducted any seminar or
meeting concerning the offer or sale of the Common Shares whose
attendees have been invited by any general solicitation or general
advertising; and
(iii) the Underwriters have not and will not solicit offers to purchase
or sell the Common Shares so as to require the filing of a
prospectus or offering memorandum or similar document with respect
thereto or the provision of a contractual right of action (as
defined in
Ontario Securities Commission Rule 14-501) under the
laws of any jurisdiction.
4. CLOSING DELIVERIES. The purchase and sale of the Common Shares shall be
completed at the Closing Time at the offices of Xxxxxxx Xxxxx & Xxxxxxxxx XXX,
Xxxxxxx, Xxxxxxx, or at such other place as the Lead Underwriter and the
Corporation may agree. At or prior to the Closing Time, the Corporation shall
duly and validly deliver to the Underwriters certificates in definitive form
representing the Common Shares, registered as directed by the Underwriters in
writing, against payment at the direction of the Corporation, in lawful money of
Canada by certified cheque or banker's draft payable at par in the City of
Xxxxxxx, Xxxxxxx, of an amount equal to the aggregate purchase price for the
Common Shares being issued and sold hereunder less the Commission and all of the
estimated out-of-pocket expenses of the Underwriters payable by the Corporation
to the Underwriters in accordance with Section 11 hereof.
- 16 -
5. CLOSING CONDITIONS. Each Purchasers' obligation to purchase the Common
Shares at the Closing Time shall be conditional upon the fulfilment at or before
the Closing Time of the following conditions:
(a) the Underwriters shall have received a certificate, dated as of the
Closing Date, signed by the President and Chief Executive Officer and Chief
Financial Officer of the Corporation, or such other officers of the Corporation
as the Lead Underwriter may agree, certifying for and on behalf of the
Corporation, and not in their personal capacities, to the best of the knowledge,
information and belief of the persons so signing, that:
(i) no order, ruling or determination having the effect of suspending
the sale or ceasing the trading in any securities of the
Corporation has been issued by any regulatory authority and is
continuing in effect and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of such officers,
contemplated or threatened by any regulatory authority;
(ii) the Corporation has duly complied with all the terms, covenants
and conditions of this Agreement on its part to be complied with
up to the Closing Time; and
(iii) the representations and warranties of the Corporation contained in
this Agreement are true and correct as of the Closing Time with
the same force and effect as if made at and as of the Closing Time
after giving effect to the transactions contemplated by this
Agreement;
(b) the Underwriters shall have received at the Closing Time a certificate
dated the Closing Date, signed by an appropriate officer or officers of the
Corporation addressed to the Underwriters and their counsel, with respect to the
articles and by-laws of the Corporation, all resolutions of the Corporation's
board of directors relating to this Agreement and the Subscription Agreements
and the transactions contemplated hereby and thereby, the incumbency and
specimen signatures of signing officers and such other matters as the
Underwriters may reasonably request;
(c) the Underwriters shall have received evidence that all requisite approvals
of the TSX have been obtained by the Corporation in order to complete the
Offering;
(d) the Common Shares shall have been conditionally approved for listing on
the TSX;
(e) the Subscription Agreements and the certificates representing the Common
Shares shall have been executed and delivered by the parties thereto in form and
substance satisfactory to the Underwriters and their counsel, acting reasonably;
(f) the Underwriters shall have received a certificate from Computershare
Trust Company of Canada as to the number of Common Shares issued and outstanding
as at a date no more than two Business Days prior to the Closing Date;
(g) the Underwriters shall have received favourable legal opinions addressed
to the Underwriters and the Purchasers, in form and substance satisfactory to
the Underwriters, acting reasonably, dated as of the Closing Date, from Xxxxxxx
Xxxxx & Xxxxxxxxx LLP, counsel for the
- 17 -
Corporation, and where appropriate, counsel in the other Qualifying Provinces
and other local counsel of the Corporation, which counsel in turn may rely, as
to matters of fact, on certificates of auditors, public officials and officers
of the Corporation and its Subsidiaries, as appropriate, with respect to the
following matters:
(i) as to the incorporation and valid existence of the Corporation
under the laws of the Province of
Ontario and as to the corporate
power of the Corporation to carry out its obligations under this
Agreement and the Subscription Agreements and to issue the Common
Shares;
(ii) the Corporation is a reporting issuer not on the list of
defaulting reporting issuers maintained pursuant to the applicable
Securities Laws of the Province of Ontario;
(iii) as to the authorized capital of the Corporation;
(iv) the Corporation has all requisite corporate power and authority
under the laws of its jurisdiction of incorporation to carry on
its business as presently carried on and to own, lease and operate
its properties and assets;
(v) none of the execution and delivery of this Agreement and the
Subscription Agreements, the performance by the Corporation of its
obligations hereunder and thereunder, or the sale or issuance of
the Common Shares will conflict with or result in any breach of
the constating documents or by-laws of the Corporation;
(vi) each of this Agreement and the Subscription Agreements have been
duly authorized and executed and delivered by the Corporation, and
constitutes a valid and legally binding agreement of the
Corporation enforceable against it in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, liquidation, reorganization, moratorium or similar
laws affecting the rights of creditors generally and except as
limited by the application of equitable principals when equitable
remedies are sought, and the qualification that the enforceability
of rights of indemnity, contribution and waiver and the ability to
sever unenforceable terms may be limited by applicable law;
(vii) the Common Shares have been validly issued as fully paid and
non-assessable shares in the capital of the Corporation;
(viii) the issuance and sale by the Corporation of the Common Shares to
the Purchasers are exempt from the prospectus and registration
requirements of applicable Securities Laws of the Qualifying
Provinces and no documents are required to be filed, proceedings
taken or approvals, permits, consents or authorizations obtained
under the applicable Securities Laws of the Qualifying Provinces
to permit such issuance and sale;
(ix) no other documents will be required to be filed, proceedings taken
or approvals, permits, consents or authorizations obtained under
the applicable Canadian Securities Laws in connection with the
first trade of the Common Shares provided
- 18 -
that a period of four months and a day has lapsed from the
distribution date of the Common Shares, subject to the usual
qualifications;
(x) the TSX has conditionally accepted the listing of the Common
Shares, subject to compliance with its conditions outlined in such
conditional acceptance; and
(xi) the form and terms of the definitive certificates representing the
Common Shares have been approved by the Board of Directors of the
Corporation and comply in all material respects with the Business
Corporations Act (Ontario) and the rules and by-laws of the TSX;
(h) the Underwriters shall have received a certificate of status or similar
certificate with respect to the jurisdiction in which the Corporation is
incorporated and a reporting issuer certificate issued by the Ontario Securities
Commission;
(i) the Underwriters shall have received a favourable legal opinion addressed
to the Underwriters, in form and substance satisfactory to the Underwriters,
acting reasonably, dated as of the Closing Date, with respect to title and
mineral rights in regards to the Lazy Xxxxxx Bay Uranium Property and Xxxxx Lake
Uranium Property;
(j) the Underwriters shall have received favourable legal opinions addressed
to the Underwriters, in form and substance satisfactory to the Underwriters,
acting reasonably, dated as of the Closing Date, from counsel to the
Subsidiaries, which counsel in turn may rely, as to matters of fact, on
certificates of auditors, public officials and officers of the Subsidiaries, as
appropriate, with respect to the following matters:
(i) each of the Subsidiaries is a corporation existing under the laws
of the jurisdiction in which it was incorporated, amalgamated or
continued, as the case may be, and has all requisite corporate
power to carry on its business as now conducted and to own, lease
and operate its property and assets; and
(ii) all of the issued and outstanding shares of the Subsidiaries (or
the applicable portion of such shares) are registered, directly or
indirectly, in the name of the Corporation or a Subsidiary; and
(k) the Underwriters shall have received certificates of status or similar
certificates with respect to the jurisdiction in which the Subsidiaries were
incorporated, amalgamated or continued, as the case may be.
6. TERMINATION EVENTS.
Each Underwriter shall be entitled to terminate its obligation to purchase the
Common Shares by written notice to that effect given to the Corporation at or
prior to the Closing Time if:
(a) material change - there shall be any material change in the affairs of the
Corporation or any of its subsidiaries which, in the reasonable opinion of
the Underwriters, has or would be expected to have a significant adverse
effect on the market price or value of the Common Shares; or
- 19 -
(b) disaster out - (A) any inquiry, action, suit, investigation or other
proceeding (whether formal or informal) is commenced, announced or
threatened or any order made by any federal, provincial, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality including, without limitation, the TSX or any securities
regulatory authority or any law or regulation is enacted or changed which
in the opinion of the Underwriters, acting reasonably, operates to prevent
or restrict the trading of the Common Shares or materially and adversely
affects or will materially and adversely affect the market price or value
of the Common Shares; or (B) if there should develop, occur or come into
effect or existence any event, action, state, condition (including,
without limitation, an act of terrorism) or major financial occurrence of
national or international consequence or any law or regulation which in
the reasonable opinion of the Underwriters materially adversely affects,
or involves, or will, or could reasonably be expected to, materially
adversely affect, or involve, the financial markets or the business,
operations or affairs of the Corporation and its subsidiaries taken as a
whole;
and, in addition, each Underwriter will be entitled to terminate its commitment
with respect to the Optioned Shares if prior to the Closing Time:
(c) market out - in the opinion of the Underwriter, the Optioned Shares cannot
be profitably marketed.
7. EXERCISE OF TERMINATION RIGHT. If this Agreement is terminated by any of
the Underwriters pursuant to section 6, there shall be no further liability on
the part of such Underwriter or of the Corporation to such Underwriter, except
in respect of any liability which may have arisen or may thereafter arise under
sections 9, 10 and 11. The right of the Underwriters or any one of them to
terminate their respective obligation under this Agreement is in addition to
such other remedies as they may have in respect of any default, act or failure
to act of the Corporation in respect of any of the matters contemplated by this
Agreement. A notice of termination given by one Underwriter under section 6
shall not be binding upon the other Underwriters.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms, warranties,
representations, covenants and agreements herein contained or contained in any
documents delivered pursuant to this Agreement and in connection with the
transactions herein contemplated shall survive the purchase and sale of the
Common Shares and continue in full force and effect for the benefit of the
Underwriters, the Purchasers and/or the Corporation, as the case may be,
regardless of the Closing of the Offering and regardless of any investigations
which may be carried out by the Underwriters or on their behalf and shall not be
limited or prejudiced by any investigation made by or on behalf of the
Underwriters in connection with the purchase and sale of the Common Shares or
otherwise for a period of three years from the Closing Date. In this regard, the
Underwriters shall act as trustee for the Purchasers and accepts these trusts
and shall hold and enforce such rights on behalf of the Purchasers.
9. (a) INDEMNITY. The Corporation shall indemnify and save harmless the
Underwriters and/or their respective affiliates and each of the partners,
directors, officers, employees, shareholders and agents of the Underwriters
(each, an "Indemnified Party") from and against all
- 20 -
liabilities, claims, actions, suits, proceedings, losses (other than loss of
profits), costs, damages and expenses, whether joint or several (including the
aggregate amount 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/or defending any claim that
may be made against the Indemnified Party to which the Indemnified Party may
become subject or otherwise involved in any capacity under any statute or common
law or otherwise insofar as such expenses, losses, claims, damages, liabilities
or actions arise out of or are based, directly or indirectly, upon the
performance of professional services rendered to the Underwriters or any
Indemnified Party hereunder or otherwise in connection with the Offering;
provided that 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:
(i) an Indemnified Party has been negligent or dishonest or have
committed any fraudulent act in the course of such performance or
breached any of their legal obligations; and
(ii) the expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly caused by the
negligence, dishonesty or fraud referred to in (i).
(b) NOTIFICATION OF CLAIMS. If any matter or thing contemplated by this
section 9 (any such matter or thing being referred to as a "Claim") is asserted
against an Indemnified Party, such Indemnified Party will notify the Corporation
as soon as possible of the nature of such Claim and the Corporation shall be
entitled (but not required) to assume the defence of any suit brought to enforce
such Claim; provided, however, that the defence shall be conducted through legal
counsel acceptable to the Indemnified Party, acting reasonably, and that no
settlement of any such Claim may be made by the Corporation or the Indemnified
Party without the prior written consent of the other party, such consent not to
be unreasonably withheld or delayed, and the Corporation shall not be liable for
any settlement of any such Claim unless it has consented in writing to such
settlement.
(c) RIGHT OF INDEMNITY IN FAVOUR OF OTHERS. With respect to any Indemnified
Party who is not a party to this Agreement, the Underwriters shall obtain and
hold the rights and benefits of this section 9 and section 10 in trust for and
on behalf of such Indemnified Party.
(d) RETAINING COUNSEL. In any such Claim, the Indemnified Party shall have
the right to retain other counsel to act on his or its behalf and to participate
in the defence thereof, provided that the fees and disbursements of such counsel
shall be paid by the Indemnified Party unless: (i) the Corporation and the
Indemnified Party shall have mutually agreed to the retention of the other
counsel, both parties acting reasonably; (ii) the Corporation fails to assume
the defence of such Claim on behalf of the Indemnified Party within a reasonable
time of receiving written notice to assume the defence of such Claim; or (iii)
the named parties to any such Claim (including any added third party) include
both the Indemnified Party and the Corporation and the Indemnified Party shall
have been advised by counsel that representation of the Indemnified Party by
counsel for the Corporation is inappropriate as a result of potential or actual
differing interests of those represented; in each of which cases the Corporation
shall not have the right to assume the defence of such Claim on behalf of the
Indemnified Party but the Corporation shall be liable to pay the reasonable fees
and disbursements of counsel to the Indemnified Party.
- 21 -
10. (a) CONTRIBUTION. In order to provide for a just and equitable
contribution in circumstances in which the indemnity provided in section 9 would
otherwise be available in accordance with its terms but is, for any reason, held
to be unavailable to or unenforceable by the Underwriters or enforceable
otherwise than in accordance with its terms, the Corporation and the
Underwriters shall contribute to the aggregate of all claims, expenses, costs
and liabilities (including any legal expenses reasonably incurred by the
Indemnified Party in connection with any claim which is the subject of this
section) and all losses (other than loss of profits) of a nature contemplated in
section 9 in such proportions so that the Underwriters are responsible for the
portion represented by the percentage that the aggregate fee payable by the
Corporation to the Underwriters bears to the aggregate purchase price of the
Common Shares and the Corporation is responsible for the balance. The
Underwriters shall not in any event be liable to contribute, in the aggregate,
any amounts in excess of such aggregate fee or any portion of such fee actually
received. However, no party who has engaged in any fraud, fraudulent
misrepresentation, wilful misconduct or gross negligence shall be entitled to
claim contribution from any person who has not engaged in such fraud, fraudulent
misrepresentation, wilful misconduct or gross negligence.
(b) RIGHT OF CONTRIBUTION IN ADDITION TO OTHER RIGHTS. The rights to
contribution provided in this section 10 shall be in addition to and not in
derogation of any other right to contribution which the Underwriters may have by
statute or otherwise at law.
(c) CALCULATION OF CONTRIBUTION. In the event that the Corporation may be
held to be entitled to contribution from the Underwriters under the provisions
of any statute or at law, the Corporation shall be limited to contribution in an
amount not exceeding the lesser of:
(i) the portion of the full amount of the loss or liability giving
rise to such contribution for which the Underwriters are
responsible, as determined in subsection 10(a) above; and
(ii) the amount of the aggregate fee actually received by the
Underwriters from the Corporation under this Agreement.
(d) NOTICE. Promptly after receipt of notice of the commencement of any legal
proceeding against the Underwriters or any Indemnified Party or after receipt of
notice of the commencement of any investigation which is based, directly or
indirectly, upon any matter in respect of which indemnification may be sought
from the Corporation, the Underwriters will notify the Corporation in writing of
the commencement thereof (provided that any delay or failure in so notifying
shall not prejudice the Underwriters' right hereunder) and, throughout the
course thereof, will provide copies of all relevant documentation to the
Corporation, will keep the Corporation advised of the progress thereof and will
discuss with the Corporation all significant actions proposed.
11. EXPENSES. The Corporation shall pay all expenses and fees in connection
with the Offering, including, without limitation, all expenses of or incidental
to the creation, issue, sale or distribution of the Common Shares; the fees and
expenses of the Corporation's counsel; all costs incurred in connection with the
preparation of documents or certificates relating to the Offering and all
reasonable expenses and fees incurred by the Underwriters and the reasonable
fees of the
- 22 -
Underwriters' counsel to a maximum amount of $60,000, not including GST and
disbursements, whether or not the Offering is completed. Upon request of the
Corporation, the Underwriters shall provide an itemized invoice setting out such
expenses and fees.
12. ADVERTISEMENTS. The Corporation acknowledges that the Underwriters shall
have the right, subject always to subsections 1(a) and (c) of this Agreement, at
their own expense, subject to the prior consent of the Corporation, such consent
not to be unreasonably withheld, to place such advertisement or advertisements
relating to the sale of the Common Shares contemplated herein as the
Underwriters may consider desirable or appropriate and as may be permitted by
applicable law. The Corporation and the Underwriters each agree that they will
not make or publish any advertisement in any media whatsoever relating to, or
otherwise publicize, the transaction provided for herein so as to result in any
exemption from the prospectus and registration or other similar requirements
under applicable securities legislation in any of the provinces of Canada or any
other jurisdiction in which the Common Shares shall be offered and sold being
unavailable in respect of the sale of the Common Shares to prospective
purchasers.
13. UNDERWRITERS' OBLIGATIONS. The Underwriters' obligations under this
Agreement shall be several and not joint, and the Underwriters' respective
obligations and rights and benefits hereunder shall be as to the following
percentages:
GMP Securities Ltd. - 47.5%
Dundee Securities Corporation - 42.5%
Toll Cross Securities Inc. - 10%
If an Underwriter (a "Refusing Underwriter") shall not complete the
purchase and sale of the Offered Shares which such Underwriter has agreed to
purchase hereunder for any reason whatsoever, the other Underwriters (the
"Continuing Underwriters") shall be entitled, at their option, to purchase all
but not less than all of the Offered Shares which would otherwise have been
purchased by such Refusing Underwriter pro rata according to the number of
Offered Shares to have been acquired by the Continuing Underwriters hereunder or
in such proportion as the Continuing Underwriters shall agree in writing. If the
Continuing Underwriters do not elect to purchase the balance of the Offered
Shares pursuant to the foregoing:
(a) the Continuing Underwriters shall not be obliged to purchase any
of the Offered Shares that any Refusing Underwriter is obligated
to purchase; and
(b) the Corporation shall not be obliged to sell less than all of the
Offered Shares,
and the Corporation shall be entitled to terminate its obligations under this
Agreement arising from its acceptance of this offer, in which event there shall
be no further liability on the part of the Corporation or the Continuing
Underwriters, except pursuant to the provisions of Sections 9 and 11 hereof.
Nothing in this paragraph shall relieve a Refusing Underwriter from liability to
the Corporation in respect of the purchase of the Offered Shares.
14. UNDERWRITERS' AUTHORITY. The Corporation shall be entitled to and shall
act on any notice, request, direction, consent, waiver, extension and other
communication given or agreement entered into by or on behalf of the
Underwriters by the Lead Underwriter who shall represent the Underwriters in all
respects and have authority to bind the Underwriters hereunder.
- 23 -
In all cases, the Lead Underwriter shall use its best efforts to consult with
the other Underwriters prior to taking any action contemplated herein.
15. NOTICES. Unless otherwise expressly provided in this Agreement, any
notice or other communication to be given under this Agreement (a "notice")
shall be in writing addressed as follows:
(a) If to the Corporation, to:
International Uranium Corporation
0000-000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxx X. Xxxxxxxxx, President and Chief Executive Officer
with a copy to:
Xxxxxxx Xxxxx & Xxxxxxxxx LLP
Scotia Plaza
0000-00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx
(b) If to the Underwriters, to:
GMP Securities Ltd.
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxx XxXxxxxx
Dundee Securities Corporation
00 Xxxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxxx Xxxx
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Toll Cross Securities Inc.
0 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxxxx Xxxx Thomson Apps & Dellelce, LLP
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: Xxxxx Xxxxx
or to such other address as any of the parties may designate by notice given to
the others.
Each notice shall be personally delivered to the addressee or sent by facsimile
transmission to the addressee and: (i) a notice which is personally delivered
shall, if delivered on a Business Day, be deemed to be given and received on
that day and, in any other case, be deemed to be given and received on the first
Business Day following the day on which it is delivered; and (ii) a notice which
is sent by facsimile transmission shall be deemed to be given and received on
the first Business Day following the day on which it is sent.
16. TIME OF THE ESSENCE. Time shall, in all respects, be of the essence
hereof.
17. CANADIAN DOLLARS. All references herein to dollar amounts are to lawful
money of Canada.
18. HEADINGS. The headings contained herein are for convenience only and shall
not affect the meaning or interpretation hereof.
19. SINGULAR AND PLURAL, ETC. Where the context so requires, words importing
the singular number include the plural and vice versa, and words importing
gender shall include the masculine, feminine and neuter genders.
20. ENTIRE AGREEMENT. This Agreement constitutes the only agreement between
the parties with respect to the subject matter hereof and shall supersede any
and all prior negotiations and understandings, including, without limitation,
the Engagement Letter. This Agreement may be amended or modified in any respect
by written instrument only.
- 25 -
21. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.
22. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
23. SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement shall
be binding upon and enure to the benefit of the Corporation, the Underwriters
and the Purchasers and their respective executors, heirs, successors and
permitted assigns; provided that, except as provided herein or in the
Subscription Agreements, this Agreement shall not be assignable by any party
without the written consent of the others.
24. FURTHER ASSURANCES. Each of the parties hereto shall do or cause to be
done all such acts and things and shall execute or cause to be executed all such
documents, agreements and other instruments as may reasonably be necessary or
desirable for the purpose of carrying out the provisions and intent of this
Agreement.
25. EFFECTIVE DATE. This Agreement is intended to and shall take effect as of
the date first set forth above, notwithstanding its actual date of execution or
delivery.
26. LANGUAGE. The parties hereby acknowledge that they have expressly
required this Agreement and all notices, statements of account and other
documents required or permitted to be given or entered into pursuant hereto to
be drawn up in the English language only. Les parties reconnaissent avoir
expressment demandees que la presente convention ainsi que tout avis, tout etat
de compte et tout autre document a etre ou pouvant etre donne ou conclu en vertu
des dispositions des presentes, soient rediges en langue anglaise seulement.
27. COUNTERPARTS AND FACSIMILE COPIES. This Agreement may be executed in any
number of counterparts and by facsimile, which taken together shall form one and
the same agreement.
[INTENTIONALLY LEFT BLANK]
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If the Corporation is in agreement with the foregoing terms and conditions,
please so indicate by executing a copy of this Agreement where indicated below
and delivering the same to the Underwriters.
Yours very truly,
GMP SECURITIES LTD.
Per:
--------------------------------------
Authorized Signing Officer
DUNDEE SECURITIES CORPORATION
Per:
--------------------------------------
Authorized Signing Officer
TOLL CROSS SECURITIES INC.
Per:
--------------------------------------
Authorized Signing Officer
The foregoing is hereby accepted on the terms and conditions therein set forth.
DATED as of the _____ day of December, 2003.
INTERNATIONAL URANIUM CORPORATION
Per:
--------------------------------------
Authorized Signing Officer
SCHEDULE "A"
MATERIAL MINING RIGHTS AND ROYALTY PAYMENTS
This is Schedule "A" to the
underwriting agreement between
International Uranium
Corporation and GMP Securities Ltd., Dundee Securities Corporation, and Toll
Cross Securities Inc. dated as of December 16, 2003.
MINING RIGHTS
ROYALTIES, LICENSE FEES OR OTHER PAYMENTS
SCHEDULE "B"
CONVERTIBLE SECURITIES
This is Schedule "B" to the
underwriting agreement between
International Uranium
Corporation and GMP Securities Ltd., Dundee Securities Corporation, and Toll
Cross Securities Inc. dated as of December 16, 2003.
--------------------------------------------------------------------------------
CLASS OF SECURITY TOTAL NUMBER OF COMMON SHARES
ISSUABLE
