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ATTACHMENT - ITEM 19(b)3(b) - AGENCY AGREEMENT
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AGENCY AGREEMENT
March 14, 1997
International Uranium Corporation
0000 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
ATTENTION: XXXXX XXXXXX, PRESIDENT
Dear Sirs:
We, Salman Partners Inc., CIBC Wood Gundy Securities Inc., Xxxxxxxxx
XxXxxxxx & Partners, Newcrest Capital Inc. and First Marathon Securities
Limited (collectively, the "Agents"), understand that International Uranium
Corporation (the "Company") proposes to create, issue and sell a total of
40,000,000 special warrants (the "Special Warrants") of the Company having the
attributes and characteristics specified herein.
Upon and subject to the terms and conditions set forth herein, the
Agents hereby offer to act as, and by their acceptance hereof the Company
hereby agrees to appoint the Agents as, the sole and exclusive agents of the
Company to use their reasonable best efforts to offer up to 40,000,000 Special
Warrants for sale to purchasers on a private placement basis at a price (the
"Purchase Price") of $1.25 per Special Warrant for an aggregate Purchase Price
of up to $50,000,000. It is understood and agreed that the Agents are under no
obligation to purchase any of the Special Warrants, although the Agents may
subscribe for Special Warrants if they so desire.
The Company agrees that the Agents will be permitted to appoint other
registered dealers (or other dealers duly qualified in their respective
jurisdictions) as their agents to assist in the private placement contemplated
hereby and that the Agents may determine the remuneration payable, from the
commission payable to the Agents hereunder, to such other dealers appointed by
them.
In consideration of the Agents' services in effecting the sale of the
Special Warrants and the distribution of the Special Warrants on a private
placement basis, the Company agrees, at the time and in the manner specified in
paragraph 6.3 hereof, to
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pay to the Agents the Commission (as hereinafter defined) in the amount
specified in paragraph 6.3 hereof.
This offer and all of the Agents' obligations hereunder are subject to
the additional terms and conditions set forth below.
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, all
capitalized terms, unless otherwise defined herein, shall have the meanings
attributed thereto in the Offering Memorandum and:
"Acquisition" means the acquisition by the Company of substantially
all of the uranium producing assets and business of Energy Fuels
materially on the terms and conditions described in, and pursuant to
the Acquisition Agreement referred to in, the Offering Memorandum;
"Acquisition Agreement" means that certain asset purchase agreement
made as of the 19th day of December, 1996 between Energy Fuels and
International Uranium Holdings Corporation, a subsidiary of the
Company, setting out the terms and conditions of the Acquisition;
"Agents' Counsel" means XxXxxxxx Xxxxxxxx;
"Amalgamated IUC" means the corporation to be formed upon the
amalgamation of the Company and Thornbury pursuant to the Amalgamation
Agreement;
"Amalgamation" means the proposed amalgamation of the Company and
Thornbury under the Business Corporations Act (Ontario) on the terms
and conditions described in, and pursuant to the Amalgamation
Agreement referred to in, the Offering Memorandum;
"Amalgamation Agreement" means the amalgamation agreement to be
entered into between the Company and Thornbury in connection with the
Amalgamation;
"Amalgamation Date" means the date shown on the certificate of
amalgamation issued by the Director under the Business Corporations
Act (Ontario) in respect of the Amalgamation;
"Automatic Retraction Time" means 5:00 p.m. (Toronto time) on the day
which is 90 days from the Closing Date;
"business day" means a day which is not a Saturday, a Sunday or a
statutory holiday in the Provinces of British Columbia or Ontario;
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"Closing" means the completion of the issue and sale by the Company
and the purchase by the Purchasers of the Special Warrants pursuant to
this Agreement and the Subscription Agreements;
"Closing Date" means March 25, 1997 or such other date as the Company
and the Agents 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 Company and the Agents may
agree;
"Commission" has the meaning attributed thereto in paragraph 6.3
hereof;
"Common Shares" means common shares without par value in the capital
of the Company as constituted on the date hereof;
"Company's Counsel" means Xxxxxxx Xxxxx & Xxxxxxxxx;
"Deemed Exercise Time" means the time at which the Escrow Release
Conditions are satisfied;
"Energy Fuels" means, collectively, Energy Fuels, Ltd., Energy Fuels
Exploration Company and Energy Fuels Nuclear, Inc.;
"Escrow Funds" means the amount equal to the aggregate proceeds of
issue (net of Commission) of the Special Warrants sold by the Company
to the Purchasers at the Closing;
"Escrow Release Conditions" means, collectively (i) the completion of
the Amalgamation, subject only to the filing of pre-approved articles
of amalgamation in respect of the Amalgamation with the Director under
the Business Corporations Act (Ontario); (ii) the closing of the
Acquisition in escrow, subject only to payment; and (iii) the
obtaining by the Company of a conditional listing of the common shares
of Amalgamated IUC on The Toronto Stock Exchange;
"Exemptions" has the meaning attributed thereto in paragraph 3.1
hereof;
"Expiry Time" means the earlier of (i) the Deemed Exercise Time and
(ii) the Automatic Retraction Time;
"Information Circular" means the Management Information Circular and
Proxy Statement dated February 17, 1997 of Thornbury, as from time to
time amended or supplemented;
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"material change", "material fact" and "misrepresentation" have the
respective meanings attributed thereto in any of the Securities Laws;
"Material Subsidiaries" means International Uranium U.S. Finance LLC,
International Uranium (Bermuda I) Ltd., International Uranium (Bermuda
II) Ltd., Energy Fuels Exploration Company Ltd., International Uranium
Holdings Corporation, Gurvan Saihan Joint Venture Corp. (effective on
the closing of the Acquisition), International Uranium (U.S.A.)
Corporation, IUC White Mesa LLC, IUC Exploration LLC, IUC Reno Creek
LLC, IUC Sunday Mine LLC, IUC Colorado Plateau LLC, IUC Arizona Strip
LLC, IUC Properties LLC as such companies exist after giving effect to
the Acquisition;
"Offering Memorandum" means the Confidential Offering Memorandum dated
March 19, 1997 of the Company, as from time to time amended or
supplemented;
"Principal Documents" means this Agreement and the Special Warrant
Indenture;
"Purchasers" means purchasers of Special Warrants pursuant to
Subscription Agreements;
"Securities Laws" means, collectively, the applicable securities laws
of each of the Selling Jurisdictions and the respective rules and
regulations made and forms prescribed thereunder together with all
applicable published policy statements, notices, interpretation notes
and blanket orders and rulings of applicable securities regulatory
authorities (including national policy statements of the Canadian
Securities Administrators);
"Selling Jurisdictions" means those jurisdictions in Canada in which
the Special Warrants are offered for sale and sold pursuant to this
Agreement;
"Special Warrants" means the special warrants to be issued by the
Company as contemplated herein;
"Special Warrant Indenture" has the meaning attributed thereto in
paragraph 2.1 hereof;
"Subscription Agreements" means the agreements to subscribe for and
purchase Special Warrants to be entered into between the Purchasers,
the Company and the Agents, in the form or forms agreed to between the
Company and the Agents;
"subsidiary" has the meaning attributed thereto in the Securities Act
(Ontario);
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"this Agreement" means the agreement formed by the acceptance by the
Company of the offer made by the Agents in this letter;
"Thornbury" means Thornbury Capital Corporation, a company created
pursuant to the laws of Ontario;
"Underlying Shares" means the Common Shares from time to time issuable
upon the exercise of the Special Warrants; and
"Warrant Agent" means Montreal Trust Company of Canada, as warrant
agent under the Special Warrant Indenture.
2. TERMS OF SPECIAL WARRANTS
2.1 The Special Warrants shall be issued under and governed by a special
warrant indenture (the "Special Warrant Indenture") to be dated as of the
Closing Date and made between the Company and the Warrant Agent as warrant
agent thereunder.
2.2 The Special Warrant Indenture shall contain provisions substantially
to the effect that:
(a) each Special Warrant will entitle the holder thereof, upon the
exercise thereof and without payment of any additional consideration,
to be issued one Common Share, subject to adjustment as provided in
the Special Warrant Indenture;
(b) each holder of Special Warrants will be entitled to exercise its
Special Warrants during the period commencing on the Closing Date and
ending at the Expiry Time;
(c) if the Deemed Exercise Time does not occur prior to the Automatic
Retraction Time, the Special Warrants then outstanding will
automatically and immediately thereafter be retracted by the Warrant
Agent on behalf of the holders thereof for repayment to such holders
out of the Escrow Funds of the aggregate Purchase Price for such
retracted Special Warrants together with payment of an amount equal to
the proportionate share attributed to such Special Warrants of the
interest earned by the Warrant Agent on the Escrow Funds, calculated
from the Closing Date to and including the day immediately preceding
the date of payment to such holder.
(d) any Special Warrant not exercised prior to the Deemed Exercise Time
will be exercised at the Deemed Exercise Time by the Warrant Agent on
behalf of the holder thereof (without any further action on the part
of the holder thereof or the Company) subject to applicable securities
laws; and
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(e) upon the satisfaction of the Escrow Release Conditions, the Company
and the Agents will forthwith, and in any event not later than the
first business day thereafter, give written notice thereof to the
Warrant Agent and the Warrant Agent will forthwith give written notice
thereof to the holders of Special Warrants.
2.3 The provisions of the Special Warrant Indenture and the attributes and
characteristics of the Special Warrants provided for therein shall be
substantially as described herein, with such changes thereto as the Agents and
the Company may agree to, and otherwise the Special Warrant Indenture shall be
in such form and contain such terms and provisions (including customary
anti-dilution provisions) as are satisfactory to the Company and the Agents,
acting reasonably.
3. NATURE OF TRANSACTION
3.1 The offering and sale of the Special Warrants to Purchasers is to be
effected in a manner exempt from any prospectus filing or delivery requirements
of all securities laws and policies applicable in the various jurisdictions in
which the Special Warrants are offered for sale and sold, without the necessity
of obtaining any order or ruling of any securities regulatory authority.
Accordingly, each Purchaser shall purchase Special Warrants from the Company,
insofar as the laws of the Province of Ontario are concerned, under prospectus
filing exemptions contained in paragraphs 72(1)(a), (c) or (d) of the
Securities Act (Ontario) and, insofar as the laws of other Selling
Jurisdictions are concerned, under similar exemptions, if available, provided
for in the applicable securities legislation of such Selling Jurisdictions (the
"Exemptions"). The Agents will notify the Company with respect to the identity
and jurisdiction of residence of each Purchaser as soon as practicable (and in
any event not later than the business day prior to the Closing Date) and with a
view to affording sufficient time to allow the Company to secure compliance
with all applicable regulatory requirements in connection with the sale of the
Special Warrants to Purchasers under the Exemptions.
3.2 The Company shall at its expense comply with all applicable regulatory
requirements of the Selling Jurisdictions in connection with the sale of the
Special Warrants to the Purchasers under the Exemptions, including the filing
of any required reports (without, if and to the extent permitted, the
disclosure therein of the names and addresses of the Purchasers) and the
payment of applicable fees relating thereto.
3.3 The Agents shall conduct their activities (and shall require any agent
appointed as contemplated on page 1 hereof to agree with the Agents, for the
benefit of the Company, to conduct its activities) in connection with the
distribution of the Special Warrants in compliance with all applicable laws and
regulatory requirements and, without limiting the foregoing, the Agents
represent and agree (and shall require any such agent to agree with the Agents
for the benefit of the Company) that:
(a) all solicitation, offering and other selling efforts carried out by
the Agents in connection with the distribution of the Special Warrants
have been and will be
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made, and all purchases of Special Warrants will be made, in
accordance with the provisions of the Exemptions in a manner such that
no prospectus need be prepared and filed or delivered by the Company
in connection therewith;
(b) no advertising of the Special Warrants has been or will be made by the
Agents in any media whatsoever (other than by way of "tombstone"
announcement appearing as a matter of record only after the Closing);
(c) a copy of the Offering Memorandum will be delivered to each
prospective purchaser or Purchaser and no delivery has been or will be
made by the Agents to any prospective purchaser or Purchaser of any
other document which, individually or together with any other
document, would constitute an offering memorandum (as such term is
defined in subsection 32(1) of the Regulation to the Securities Act
(Ontario)); and
(d) no solicitation, offering or other selling efforts with respect to the
distribution of the Special Warrants have been or will be made by the
Agents in the United States or to any U.S. Person (as such term is
defined in Regulation S under the United States Securities Act of
1933, as amended) except in accordance with the terms and conditions
of Schedule A attached hereto, which terms and conditions are
incorporated herein by reference;
provided that, for greater certainty, the Company acknowledges that any term
sheet relating to the Special Warrants, annual and quarterly reports, material
change reports and press releases issued by the Company and generally available
research reports, memoranda and other materials concerning the Company,
Thornbury or Energy Fuels prepared by others do not, individually or
collectively, constitute an offering memorandum for purposes of subparagraph
(c) above.
3.4 The Agents shall obtain from each Purchaser a properly completed and
duly executed Subscription Agreement in accordance with the provisions of this
Agreement. In order to facilitate organization for the Closing, the Agents
will use their reasonable best efforts to provide copies of such documents to
the Company's Counsel not less than 24 hours prior to the Closing Time,
provided that no provision of such documents shall constitute a delivery
thereof for purposes of paragraph 6.2 hereof.
4. REPRESENTATIONS AND WARRANTIES OF COMPANY
4.1 Subject to paragraph 4.2, the Company represents and warrants to the
Agents and the Purchasers, and acknowledges that the Agents will be relying
upon such representations and warranties in rendering their services hereunder
and the Purchasers will be relying upon such representations and warranties in
purchasing the
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Special Warrants, that, other than as previously disclosed to the Agents and
the Purchasers, whether in the Offering Memorandum or otherwise in writing:
(a) each of the Company and the Material Subsidiaries has been, or prior
to the completion of the Acquisition will be, duly incorporated or
registered and organized and is, or prior to the completion of the
Acquisition will be, validly existing and in good standing under the
laws of its jurisdiction of incorporation or registration, is, or
prior to the completion of the Acquisition will be, duly qualified to
carry on its business as it is presently and proposed to be carried on
and is, or prior to the completion of the Acquisition will be, duly
qualified and authorized to carry on business and is, or prior to the
completion of the Acquisition will be, in good standing as a foreign
corporation in each jurisdiction in which the character of its
properties or the nature of its business makes such qualification or
authorization necessary and has, or prior to the completion of the
Acquisition will have, all requisite power and authority to carry on
its business as it is currently and is proposed to be carried on and
to own, lease and operate its properties and assets, and, in the case
of the Company, to execute and deliver each of the Amalgamation
Agreement and the Principal Documents, to consummate the transactions
contemplated thereby and to duly observe and perform all of its
covenants and obligations therein set forth;
(b) the Company and each of the Material Subsidiaries has conducted and is
conducting, or upon incorporation will conduct, its business in
compliance in all material respects with all applicable licensing,
resource extraction and environmental protection legislation, rules,
regulations and bylaws and other similar legislation and all other
laws, rules, regulations and other lawful requirements of any
governmental or regulatory bodies which are applicable to the Company
and the Material Subsidiaries, and the Company is not aware of any
legislation, regulation, rule or lawful requirements presently in
force or proposed to be brought into force which the Company
anticipates the Company or any of the Material Subsidiaries will be
unable to comply with without materially adversely affecting the
financial condition, results of operations, business, prospects or
viability of Amalgamated IUC and its subsidiaries, taken as a whole,
after giving effect to the completion of the Amalgamation and the
Acquisition;
(c) after giving effect to the completion of the Amalgamation and the
Acquisition, Amalgamated IUC will have no subsidiaries which are
carrying on active business or which hold material assets or have any
material liabilities other than the Material Subsidiaries, Amalgamated
IUC will legally and beneficially own, directly or indirectly, all of
the issued and outstanding shares (except for any director's
qualifying shares or shares held in trust for the benefit of
Amalgamated IUC) in the capital of each of the Material Subsidiaries
in each case as described in the Offering Memorandum, subject to no
security interests, all of such shares will have been duly authorized
and validly issued and will be outstanding as fully paid and
non-assessable shares and no person will have any right, agreement or
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option, present or future, contingent or absolute, or any right
capable of becoming a right, agreement or option, for the purchase
from Amalgamated IUC or any of the Material Subsidiaries of any
interest in any of such shares or for the issue or allotment of any
unissued shares in the capital of any Material Subsidiary or any other
security convertible into or exchangeable or exercisable for any such
shares;
(d) the Offering Memorandum is true, correct and accurate in all material
respects, contains no misrepresentation and was prepared in accordance
with and complies with Securities Laws;
(e) the unaudited consolidated balance sheet and the unaudited
consolidated statement of cash flows of the Company including the
notes thereto, all as set forth in the Offering Memorandum, were
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby (after
giving retroactive effect to any accounting changes described in the
notes thereto) and accurately and fairly present the assets,
liabilities (contingent or otherwise) and financial condition and
position and the revenue, losses, results of operations and changes in
financial position of the Company on a consolidated basis as at the
dates thereof and during the periods covered thereby;
(f) the pro forma condensed consolidated balance sheet of Amalgamated IUC,
including the notes thereto, all as set forth in the Offering
Memorandum, was prepared in accordance with generally accepted
accounting principles and accurately and fairly presents the assets,
liabilities (contingent or otherwise) and financial condition and
position of Amalgamated IUC on a consolidated basis as at the date
thereof after giving effect to the transactions and assumptions
described in the notes thereto;
(g) the authorized capital of the Company consists of an unlimited number
of Common Shares, of which 26,500,000 are issued and outstanding on
the date hereof, and, after giving effect to the completion of the
Amalgamation (assuming the cancellation of 57,639 common shares of
Thornbury, the exercise of 250,000 options to acquire common shares of
Thornbury and that all of the Special Warrants are issued and
exercised prior to the Amalgamation), the authorized capital of
Amalgamated IUC will consist of an unlimited number of common shares,
of which 67,943,066 will be issued and outstanding, as fully paid and
non-assessable shares and, except with respect to stock options that
when granted, will entitle the holders thereof to purchase up to
2,540,000 Common Shares from the Company and currently outstanding
stock options to purchase 250,000 common shares of Thornbury, in each
case on the terms set forth in the Offering Memorandum, and except
with respect to the securities of the Company
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to be issued as contemplated in this Agreement, no person has or,
after giving effect to the completion of the Amalgamation or the
Acquisition, will have any right, agreement or option, present or
future, contingent or absolute, or any right capable of becoming a
right, agreement or option, for the issue or allotment of any unissued
shares in the capital of the Company, the Material Subsidiaries or
Amalgamated IUC or any other security convertible into or exchangeable
or exercisable for any such shares or to require the Company to
purchase, redeem or otherwise acquire any of the issued and
outstanding Common Shares;
(h) neither the Company nor any of the Material Subsidiaries is in breach
or violation of or default under (and no event has occurred and is
continuing which with the giving of notice or lapse of time or both
would constitute an event of default under), and neither the execution
and delivery by the Company or any of the Material Subsidiaries (as
applicable) of any of the Principal Documents, the Amalgamation
Agreement or the Acquisition Agreement, nor the consummation of the
transactions contemplated thereby nor the due observance and
performance by the Company of any of its covenants or obligations
contained therein conflicts or will conflict with, results or will
result in a breach or violation of, or constitutes or will constitute
a default (or any event which with the giving of notice or lapse of
time or both would constitute an event of default) under, any of the
terms or provisions of the constating documents of the Company or any
of the Material Subsidiaries or of any resolutions of the directors or
shareholders of the Company or any of the Material Subsidiaries, or of
any of the terms or provisions of any agreement, instrument or permit
to which the Company or any of the Material Subsidiaries is a party or
by which the Company or any of the Material Subsidiaries is bound or
to which any of their respective properties or assets are subject or
of any judgment, decree, order, law, rule or regulation by which the
Company or any of the Material Subsidiaries is bound or to which any
of their respective properties or assets are subject, the effect of
any of which conflicts, breaches, violations or defaults, singularly
or in the aggregate, might materially adversely affect the financial
condition, results of operations, business, prospects or viability of
Amalgamated IUC and its subsidiaries, taken as a whole, after giving
effect to the completion of the Amalgamation and the Acquisition, or
would impair the ability of the Company or the Material Subsidiaries,
as the case may be, to consummate the Amalgamation or the Acquisition
or the transactions contemplated hereby or thereby or to duly observe
and perform any of its covenants or obligations contained in the
Amalgamation Agreement, the Acquisition Agreement or the Principal
Documents;
(i) each of the Amalgamation Agreement and the Acquisition Agreement has
been or, prior to the completion of the Amalgamation and the
Acquisition, will have been duly authorized, executed and delivered
by, and at the time of such completion will be a legal, valid and
binding obligation of, and will be enforceable in accordance with its
terms against, the Company and the Material Subsidiaries to the extent
a party thereto, each of the Amalgamation Agreement and the
Acquisition Agreement, by its terms and under all applicable laws,
rules and
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regulations, will be effective at the time of such completion and none
of the Amalgamation Agreement or the Acquisition Agreement will have
been terminated or otherwise nullified, each of the representations
and warranties of the Company and the Material Subsidiaries are or,
prior to the time of such completion will be, true, correct and
accurate in all material respects, neither the Company nor the
Material Subsidiaries, to the best of the knowledge of the Company,
any of the other parties to the Acquisition Agreement is or, prior to
the time of such completion, will be in any material respect in breach
or violation of or default under (and no event has or will have
occurred and is or will be continuing which with the giving of notice
or lapse of time or both would constituted an event of default under)
any of the terms or provisions of the Amalgamation Agreement or the
Acquisition Agreement, each of the conditions, covenants and
obligations contained in the Amalgamation Agreement or the Acquisition
Agreement required to be satisfied, observed or performed at or prior
to the time of such completion have been or will have been satisfied,
observed or performed at or prior to such time by the Company and the
Material Subsidiaries as applicable and all consents of third parties
and approvals, consents and orders of and filings with governmental
authorities and regulatory bodies required to be obtained or made in
order to consummate the Amalgamation or the Acquisition will have been
obtained or made prior to and will be effective at the time of such
completion;
(j) no litigation, administrative proceeding, arbitration or other
proceeding before or of any court, tribunal, arbitrator, governmental
authority or regulatory body or dispute with any governmental
authority or regulatory body is presently in process, pending or, to
the knowledge of the Company, threatened against the Company or any of
the Material Subsidiaries which, if determined adversely to the
Company or any of the Material Subsidiaries, might have a material
adverse effect on the financial condition, results of operations,
business, prospects or viability of Amalgamated IUC and its
subsidiaries, taken as a whole, after giving effect to the completion
of the Amalgamation and the Acquisition, or which would impair the
ability of the Company to consummate the Amalgamation or the
Acquisition or the transactions contemplated hereby or to duly observe
and perform any of its covenants or obligations contained in the
Amalgamation Agreement, the Acquisition Agreement or the Principal
Documents;
(k) there has not occurred any adverse material change or any adverse
material fact, financial or otherwise, in the assets (including
information or data relating to the estimated or book value of
assets), liabilities (contingent or otherwise), business, affairs,
ownership, management, operations, financial condition, capital,
prospects or viability of the Company or the Material Subsidiaries,
taken as a whole, since December 31, 1996 which is not described in
the Offering Memorandum; and
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(l) since December 31, 1996, except as described in the Offering
Memorandum:
(i) there has not been any material change in the assets,
liabilities (contingent or otherwise), business, operations,
financial condition, prospects or viability of the Company and
its Material Subsidiaries taken as a whole;
(ii) there has not been any material change in the capital or
indebtedness of the Company and its Material Subsidiaries
taken as a whole; and neither the Company or any of its
Material Subsidiaries has received or been informed that it
will receive any demand for repayment of any such
indebtedness;
(iii) there has not been any adverse material change in the
financial position of the Company and its Material
Subsidiaries on a consolidated basis, and there has not been
and there is currently not contemplated any material
revaluation of any assets or any cancellation of any debt or
waiver or release of any rights or claims held by or owed to
the Company and its Material Subsidiaries taken as a whole
(except for cancellations, waivers and releases in the
ordinary course of business which in the aggregate are not
material) or any material increase in the age of outstanding
accounts receivable, the allowance for doubtful accounts or
the bad debt losses of the Company and its Material
Subsidiaries taken as a whole;
(iv) there has not been any termination or amendment of, or any
failure in any material respect to observe or perform any
covenants or obligations under, any material contract, lease
or agreement to which the Company or any of its Material
Subsidiaries is a party or by which the Company or any of its
Material Subsidiaries is bound; and
(v) each of the Company and its Material Subsidiaries has carried
on its business and operated and maintained its assets in the
ordinary course of business and consistent with past practice,
and other than as contemplated in the Offering Memorandum (A)
has not entered into and does not currently contemplate
entering into any material transaction not in the ordinary
course of business and (B) has not made any material capital
or exploration and development expenditures or commitments for
material capital or exploration and development expenditures.
4.2 It is acknowledged and agreed that one or more of the Material
Subsidiaries may not be incorporated on the basis that management of the
Company is of the view that such company is not required or necessary.
4.3 All of the representations and warranties made by Energy Fuels in the
Acquisition Agreement are hereby incorporated by reference as if made by the
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Company to the Agents and the Purchasers, provided that the giving of all such
representations and warranties by the Company is subject to any and all of the
restrictions, limitations, defences and set-offs contained in the Acquisition
Agreement, including, without limiting the generality of the foregoing, any and
all restrictions pertaining to the survival thereof and the indemnities in
relation thereto and the maximum amount payable by the vendors for breaches of
representations and warranties under the Acquisition Agreement.
5. CONDITIONS TO PURCHASE OBLIGATIONS
5.1 The following are conditions to the obligations of the Agents and the
Purchasers to complete the transactions contemplated hereby, which conditions
the Company covenants to satisfy or fulfill at or prior to the Closing Time and
which conditions may be waived in writing in whole or in part by the Agents on
behalf of the Purchasers:
(a) all actions required to be taken by or on behalf of the Company,
including the passing of all requisite resolutions of directors of the
Company, shall have been taken so as to validly create, issue and sell
the Special Warrants and the Underlying Shares;
(b) the Company shall have made all necessary filings and obtained all
necessary approvals, consents and acceptances of appropriate
regulatory authorities required to be made or obtained prior to the
Closing Time in order to permit the Company to issue and sell the
Special Warrants to the Purchasers as contemplated hereby;
(c) the Special Warrant Indenture shall have been entered into by and be
in effect between the Company and the Warrant Agent;
(d) the Company shall have duly accepted each Subscription Agreement
submitted to it by the Agents in accordance with this Agreement other
than those Subscription Agreements which the Company elects to reject,
acting reasonably;
(e) members of the Xxxxxx family shall have entered into escrow agreements
in form and substance satisfactory to the Agents with respect to
22,750,000 common shares of Amalgamated IUC to be held by such persons
upon completion of the Amalgamation (the "Restricted Shares"), which
agreements shall provide, among other things, that such Restricted
Shares will not be sold, assigned, transferred, hypothecated or
otherwise dealt with by the holders thereof for a period of 90 days
from the Deemed Exercise Time without the consent of the Agents, such
consent not to be unreasonably withheld;
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(f) the Company shall have caused favourable legal opinions, addressed to
the Agents, the Purchasers and the Agents' Counsel and dated the
Closing Date, and in form and content reasonably acceptable to the
Agents and the Agents' Counsel, to be delivered to the Agents by the
Company's Counsel with respect to such matters relating to the Company
and its subsidiaries, International Uranium Holdings Corporation and
International Uranium (U.S.A.) Corporation and the transactions
contemplated hereby as the Agents may reasonably request;
(g) the Agents shall have received a favourable legal opinion, addressed
to the Agents and the Purchasers and dated the Closing Date, from the
Agents' Counsel with respect to such matters as the Agents may
reasonably request;
(h) the Company shall have delivered to the Agents a certificate signed on
behalf of the Company by the President and the Secretary of the
Company, or by such other officers of the Company as are acceptable to
the Agents, addressed to the Agents and the Purchasers and dated the
Closing Date, and in a form reasonably satisfactory to the Agents and
the Agents' Counsel, certifying that, to the best of the knowledge,
information and belief of such officers, having made due inquiry:
(i) no order ceasing or suspending trading in any securities of
the Company or prohibiting the sale of the Special Warrants or
the issuance of the Underlying Shares is in effect (except for
any such order based solely upon the activities or alleged
activities of the Agents and not of the Company) and, to the
knowledge of such officers, no proceedings for such purpose
are pending or threatened;
(ii) each of the representations and warranties contained in
paragraph 4.1 hereof is true, correct and accurate in all
material respects and contains no misrepresentation as of the
Closing Time as if such representations and warranties had
been made at and as of the Closing Time; and
(iii) the Company has in all material respects complied with each of
the covenants and satisfied each of the terms and conditions
of this Agreement on its part to be complied with or satisfied
at or prior to the Closing Time;
(i) each of the representations and warranties contained in paragraph 4.1
hereof, and the statements in any officer's certificate delivered
pursuant hereto or in connection herewith, shall be, and the Agents
shall be reasonably satisfied (based on its due diligence
investigations and examinations) that each of such representations,
warranties and statements is, true, correct and accurate in all
material respects and contains no misrepresentation as of the Closing
Time as if such representations, warranties and statements had been
made at and as of the Closing Time.
- 14 -
15
5.2 The Company agrees that copies of the legal opinions and certificates
referred to in paragraph 5.1 hereof addressed to the Purchasers and delivered
to the Agents at the Closing may also be delivered to any persons to whom the
Agents, if it purchases any of the Special Warrants, may resell any of such
Special Warrants within 30 days after the Closing Date.
6. CLOSING
6.1 The closing of the transactions contemplated hereby shall be completed
at the offices of the Company's Counsel in Toronto at the Closing Time.
6.2 At the Closing, the Agents shall deliver or cause to be delivered to
the Company's counsel, Xxxxxxx Xxxxx & Xxxxxxxxx, a certified cheque or bank
draft made payable to Xxxxxxx Xxxxx & Xxxxxxxxx, in trust on the Closing Date
in an amount equal to the aggregate proceeds of issue of the Special Warrants
sold by the Company to the Purchasers at the Closing and the Agents shall also
deliver to the Company properly completed and duly executed original or
facsimile copies of the Subscription Agreements relating to the Special
Warrants issued and sold to Purchasers at the Closing, and the Company shall
deliver or cause to be delivered to or upon the direction of the Agents Special
Warrant certificates evidencing all of such Special Warrants registered in the
name of the Purchasers and the Company shall also deliver or cause to be
delivered to the Agents the requisite certificates, opinions and other
documents as contemplated hereby.
6.3 At the Closing, the Company shall cause Xxxxxxx Xxxxx & Xxxxxxxxx, for
and on behalf of the Company, to deliver or cause to be delivered to the
Warrant Agent a certified cheque or bank draft made payable to the Warrant
Agent on the Closing Date in an amount equal to the Escrow Funds. Upon delivery
of the Escrow Funds to the Warrant Agent, the Company shall cause Xxxxxxx Xxxxx
& Xxxxxxxxx, for and on behalf of the Company, in consideration of the Agents'
services hereunder, to deliver or cause to be delivered to the Agents a
certified cheque or a bank draft made payable to the Agents in an amount (the
"Commission") equal to 6% of the aggregate Purchase Price for the Special
Warrants issued and sold at the Closing other than in respect of 4,100,000
Special Warrants to be purchased by Purchasers introduced to the Agents by
members of the Xxxxxx family. For greater certainty, it is acknowledged and
agreed that no Commission shall be payable in respect of the 4,100,000 Special
Warrants to be sold to Purchasers introduced to the Agents by members of the
Xxxxxx family.
6.4 The Special Warrant Indenture shall contain provisions to the effect
that the Escrow Funds paid to the Warrant Agent in accordance with paragraph
6.2 hereof will be deposited with and held in escrow by the Warrant Agent and
invested by it in accordance with the terms of the Special Warrant Indenture
and that the Escrow Funds
- 15 -
16
and interest earned thereon (i) at the Deemed Exercise Time, will be released
from escrow and paid by the Warrant Agent to the Company as soon as practicable
after the Company and the Agent deliver a written certificate to the Warrant
Agent to the effect that the Escrow Release Conditions have been satisfied or
(ii) at the Automatic Retraction Time, will be applied by the Warrant Agent to
repay to holders of Special Warrants upon the automatic retraction of such
Special Warrants by the Warrant Agent on behalf of such holders as contemplated
in subparagraph 2.2(c) the aggregate Purchase Price for the Special Warrants
and to pay to such holder the proportionate share attributed to such Special
Warrants of the interest earned by the Warrant Agent on the Escrow Funds
calculated from the Closing Date to and including the day immediately preceding
the date of payment to such holder.
6.5 The Company will make all necessary arrangements for the delivery of
the Special Warrant certificates referred to in paragraph 6.2 hereof at the
Closing. It is understood and agreed that no charge will be made by the
Warrant Agent (other than to the Company) in respect of any transfer, exchange
or registration of any of the Special Warrants if carried out within a period
of 30 days following the Closing Date.
7. TERMINATION RIGHTS
7.1 Each of the Agents shall be entitled, at its option, to terminate and
cancel, without any liability on the Agents' part, its obligations under this
Agreement, and on behalf of the Purchasers arranged for by the Agents, to
terminate and cancel, without any liability on the Purchasers' part, their
respective obligations to purchase the Special Warrants, by giving written
notice to the Company at any time prior to the Closing Time, if at any time
prior to the Closing:
(a) there shall have occurred any adverse material change or adverse
material fact in relation to the Company and its Material
Subsidiaries, taken as a whole (taking into account the fact that the
Company intends to complete the Amalgamation and the Acquisition) or a
development that could result in an adverse material change or adverse
material fact in relation to the Company and its Material
Subsidiaries, taken as a whole (taking into account the fact that the
Company intends to complete the Amalgamation and the Acquisition); or
(b) there shall have occurred any change in the applicable laws or
regulations of Canada or any province thereof or the United States or
any state thereof, or any inquiry, investigation or other proceeding
is made or any order is issued under or pursuant to any such laws or
regulations or under or pursuant to the rules of any stock exchange,
or any such change, inquiry, investigation or other proceeding or
order is announced, commenced or threatened, and is material in
relation to the Company and its Material Subsidiaries, taken as a
whole (taking into account the fact that the Company intends to
complete the Amalgamation and the Acquisition) or any of its
securities (except for any inquiry, investigation or other proceeding
or order based upon activities of the Agents and not upon activities
of the Company);
- 16 -
17
which, in the opinion of any of the Agents, acting reasonably, operates or
would operate to prevent or restrict trading in or the distribution of the
Special Warrants or the Underlying Shares or adversely affects or might
reasonably be expected to adversely affect the investment quality or
marketability of the Special Warrants or the Underlying Shares or the ability
of Amalgamated IUC and its subsidiaries, after giving effect to the completion
of the Amalgamation and the Acquisition, to carry on their business as it is
currently and is proposed to be carried on;
(c) there should develop, occur or come into effect or existence any
event, action, state, condition or major financial occurrence of
national or international consequence or any law or regulation, which,
in the opinion of any of the Agents, acting reasonably, seriously
adversely affects or involves, or will seriously adversely affect or
involve, the financial markets or the business, operations, affairs,
prospects or viability of the Company and its Material Subsidiaries,
taken as a whole (taking into account the fact that the Company
intends to complete the Amalgamation and the Acquisition);
(d) a cease trading order is made by the Ontario Securities Commission or
any other competent authority by reason of the fault of the Company or
its directors, officers or agents and such cease trading order is not
rescinded within 48 hours of the Closing Date;
(e) the Special Warrants cannot, in the reasonable opinion of any of the
Agents, be marketed or placed in a satisfactory manner due to the
state of the financial markets; or
(f) any of the Agents are not reasonably satisfied with the results of any
due diligence investigations and examinations with respect to the
Company, Thornbury or Energy Fuels or their respective subsidiaries
conducted by or on behalf of the Agents.
7.2 The rights of termination contained in paragraph 7.1 hereof are in
addition to any other rights or remedies the Agents or the Purchasers may have
in respect of any default, act or failure to act or non-compliance by the
Company in respect of any of the matters contemplated by this Agreement.
7.3 If the obligations of the Agents and the Purchasers hereunder are
terminated pursuant to paragraph 7.1 hereof, the respective obligations of the
parties hereunder will terminate and none of the Agents, the Purchasers or
(subject to the rights or remedies referred to in paragraph 7.2 hereof) the
Company will have any liability to the other, except that the Company's
obligations under paragraphs 9.1 and 10.1 to 10.5 shall survive and continue.
- 17 -
18
8. ADDITIONAL COVENANTS
8.1 The Company covenants with the Agents as follows:
(a) prior to the completion of the Amalgamation and the Acquisition, the
Company will allow the Agents to conduct all due diligence
investigations and examinations which the Agents may require in order
to satisfy themselves with respect thereto; and
(b) from and after the date hereof until the later of completion of the
distribution of the Underlying Shares and the completion of the
Amalgamation and the Acquisition, the Company will promptly notify the
Agents (which notification will be confirmed in writing if reasonably
requested) of any material change or any change in a material fact, in
either case whether actual, anticipated, contemplated or threatened,
or any event or development involving a prospective material change,
in any or all of the business, affairs, ownership, management,
operations, assets (including information or data relating to the
estimated or book value of assets), liabilities (contingent or
otherwise), financial condition, capital, prospects or viability of
the Company and its Material Subsidiaries, taken as a whole (taking
into account the fact that the Company intends to complete the
Amalgamation and the Acquisition) or of any change which is of such a
nature as to result in, or which could result in, a misrepresentation
in the Offering Memorandum. The Company will promptly, and in any
event within any applicable time limitation, comply with all filing
and other requirements under the Securities Laws applicable to the
Company as a result of any such change, event or development, provided
that the Company shall not file or distribute any amendment to the
Offering Memorandum without first obtaining from the Agents their
approval as to the form and content thereof, such approval not to be
unreasonably withheld. In addition to the foregoing, the Company will
in good faith discuss with the Agents any event or change in
circumstances which is of such a nature that there is or ought to be
consideration given by the Company as to whether notice of such event
or change need be given to the Agents pursuant to this subparagraph.
8.2 The Company covenants with the Agents and the Purchasers as follows:
(a) the Company will apply for, and will use its reasonable best efforts
to obtain, conditional approval of the listing of the common shares of
Amalgamated IUC on The Toronto Stock Exchange;
(b) from and after the date hereof until the completion of the
distribution of the Underlying Shares, the Company will not, and will
not permit any of the Material Subsidiaries to, agree to any material
supplement or amendment to the Amalgamation Agreement or the
Acquisition Agreement that results in or could
- 18 -
19
result in a misrepresentation in the Offering Memorandum without in
good faith consulting with the Agents in respect of any such
supplement or amendment;
(c) to the extent that the funds deposited with and held in escrow by the
Warrant Agent pursuant to paragraph 6.2 hereof are not sufficient to
enable the Warrant Agent to make any required payment to the holders
of Special Warrants upon the automatic retraction of such Special
Warrants, the Company will, within one business day of receipt of
notice from the Warrant Agent specifying such deficiency, provide the
Warrant Agent with sufficient funds to enable the Warrant Agent to
make such payment in full;
(d) the Company will apply the proceeds from the sale of the Special
Warrants substantially in the manner set forth in the Offering
Memorandum in connection with the closing of the Acquisition, and as
to the balance of such proceeds, the Offering Memorandum provides an
accurate statement of management's current intention (it being
acknowledged that such intention may change depending on a number of
factors that may affect the Company's business including, without
limitation, the price of uranium); and
(e) from the date hereof until six months after the Closing Date, the
Company shall not, without the prior written consent of the Agents
(such consent not to be unreasonably withheld), directly or
indirectly, allot, issue, offer, sell or grant any option or other
right to purchase, or agree, become bound or announce any intention to
allot, issue, offer, sell or grant any option or other right to
purchase, any Common Shares (or any financial instruments or other
securities convertible into or exchangeable or exercisable for Common
Shares) other than as contemplated hereby or in connection with the
Company's director, officer, employee and consultant stock option
plans or in connection with existing agreements regarding interests in
mineral properties.
For greater certainty, each of the foregoing covenants shall apply to
Amalgamated IUC and with respect to the common shares of Amalgamated IUC after
the Amalgamation Date.
9. PAYMENT OF EXPENSES
9.1 Subject to paragraph 9.2, the Company shall pay or cause to be paid
all expenses of or incidental to the issuance and sale of the Special Warrants
and the distribution of the Underlying Shares and all other matters in
connection with the transactions contemplated hereby and the Amalgamation and
the Acquisition Transactions, including, without limitation, the reasonable
out-of-pocket expenses from time to time incurred by or on behalf of the Agents
(including the reasonable fees and disbursements (and taxes thereon) of the
Agents' Counsel and any local counsel
- 19 -
20
retained by the Agents' counsel to assist it in due diligence concerning Energy
Fuels up to a maximum of $100,000 plus applicable Goods and Services taxes).
9.2 In the event the Closing occurs but the Escrow Release Conditions are
not satisfied prior to the Automatic Retraction Time, the Agents shall be
responsible for payment of their out-of-pocket expenses (including fees and
disbursements of Agents' Counsel and any local counsel retained by it to assist
in due diligence concerning Energy Fuels).
10. INDEMNITY
10.1 The Company, which for the purposes of this section 10, shall be
deemed to include Amalgamated IUC, shall indemnify and save the Agents and each
of the Agents' shareholders, directors, officers, employees and agents
(collectively, in this section 10, the "Indemnified Persons"), harmless against
and from all liabilities, claims, demands, losses (other than losses of profit
in connection with the distribution of the Special Warrants), costs, damages
and expenses to which any of the Indemnified Persons may be subject or which
any of the Indemnified Persons may suffer or incur, whether under the
provisions of any statute or otherwise, in any way caused by, or arising
directly or indirectly from or in consequence of:
(a) any misrepresentation or alleged misrepresentation (except a
misrepresentation relating solely to the Agents) contained in the
Offering Memorandum or any document filed on or before the
Amalgamation Date with the Ontario Securities Commission or any other
competent authority or contained in this Agreement or any certificate
or other document delivered to the Agents or the Purchasers hereunder
(collectively, in this section 10, the "Documents");
(b) any prohibition or restriction of trading in the securities of the
Company or Amalgamated IUC or any prohibition or restriction affecting
the distribution of the Special Warrants or the Underlying Shares or
the common shares of Amalgamated IUC imposed by the Ontario Securities
Commission or any other competent authority if such prohibition or
restriction is based on any misrepresentation or alleged
misrepresentation (except a misrepresentation relating solely to the
Agents) in the Documents;
(c) any order made or any inquiry, investigation (whether formal or
informal) or other proceeding commenced or threatened by the Ontario
Securities Commission or any other competent authority relating to the
Company or any of the Material Subsidiaries or to Amalgamated IUC, or
any of their respective directors or officers or relating to or
affecting the distribution of the Special Warrants, the Underlying
Shares or the common shares of Amalgamated IUC other than any such
order, enquiry, investigation or other proceeding based solely upon
the activities or alleged activities of the Agents; or
- 20 -
21
(d) any breach of, default under or non-compliance by the Company or any
of the Material Subsidiaries or by Amalgamated IUC with any
representation, warranty, covenant, term or condition of the
Amalgamation Agreement or the Acquisition Agreement or the Principal
Documents or of any agreement or instrument relating to the
transactions contemplated thereby or with any requirement of
applicable securities legislation.
10.2 If any claim contemplated by paragraph 10.1 hereof shall be asserted
against any of the Indemnified Persons in respect of which indemnification is
or might reasonably be considered to be provided for in such paragraph, such
Indemnified Person shall notify the Company as soon as possible of the nature
of such claim (provided that any failure to so notify shall not affect the
Company's liability hereunder) and the Company 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 through legal counsel selected by
the Company and reasonably acceptable to the Indemnified Person and that no
settlement may be made by the Company or the Indemnified Person without the
prior written consent of the other, such consent not to be unreasonably
withheld. The Indemnified Person shall have the right to retain its own
counsel in any proceeding relating to a claim contemplated by paragraph 10.1
hereof if:
(a) the Indemnified Person has been advised by counsel that there may be
legal defences available to the Indemnified Person which are different
from or additional to defences available to the Company (in which case
the Company shall not have the right to assume the defence of such
proceedings on the Indemnified Person's behalf);
(b) the Company shall not have taken the defence of such proceedings and
employed counsel within ten days after notice of commencement of such
proceedings; or
(c) the employment of such counsel has been authorized by the Company in
connection with the defence of such proceedings;
and, in any such event, the reasonable fees and expenses of such Indemnified
Person's counsel shall be paid by the Company.
10.3 In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Agreement is
due in accordance with its terms but is, for any reason, held by a court to be
unavailable from the Company, each of the Company and the Indemnified Person
seeking indemnification shall contribute to the aggregate liabilities, claims,
demands, losses (other than losses of profit in connection with the
distribution of the Special Warrants), costs, damages and expenses (including
- 21 -
22
legal or other expenses reasonably incurred in connection with investigation or
defence of the same) to which they may be subject or which they may suffer or
incur:
(a) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand, and by the Indemnified Person
seeking indemnity on the other hand, from the sale of the Special
Warrants; or
(b) if the allocation provided by subparagraph (a) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in subparagraph (a) above but
also to reflect the relative fault of the Indemnified Person seeking
indemnity, on the one hand, and the Company and other applicable
parties, on the other hand, in connection with the statements or
omissions or other matters which resulted in such liabilities, claims,
demands, losses, costs, damages or expenses as well as any other
relevant equitable considerations.
The relevant benefits received by the Company, on the one hand, and the Agents,
on the other hand, shall be deemed to be in the same proportion that the total
proceeds of the sale of the Special Warrants received by the Company (net of
the Commission but before deducting expenses) bear to the Commission received
by the Agents. In the case of liability arising out of any of the Documents,
the relative fault of the Company, on the one hand, and of the Agents, on the
other hand, shall be determined by reference, among other things, to whether
the untrue or alleged untrue statement or omission or other matter relates to
information supplied or which ought to have been supplied by the Company and
other applicable parties or the Agents and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement, omission or other matter. The Company agrees that it would not be
just and equitable if contributions pursuant to this Agreement were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The rights to
contribution provided in this paragraph 10.3 shall be in addition to, and
without prejudice to, any other right to contribution which the Indemnified
Persons may have.
10.4 The Company will not make any claim for, and hereby irrevocably waives
any right by statute or common law to, contribution against the Agents or any
of the other Indemnified Persons with respect to any matter in respect of which
the Company has agreed to indemnify the Indemnified Persons hereunder.
10.5 The rights to indemnity and contribution herein provided shall be in
addition to and not in derogation of any other right to indemnity or
contribution which any Indemnified Person may have by statute or otherwise at
law. It is the intention of the Company to constitute the Agents trustee for
its shareholders, directors, officers, employees and agents of the covenants of
the Company under paragraphs 10.1 to 10.4 hereof with respect to such persons
and the Agents agree to accept such trust and to hold and enforce such
covenants on behalf of such persons.
- 22 -
23
11. MISCELLANEOUS
11.1 Any notice to be given hereunder shall be in writing and shall be
given by facsimile (if receipt of any such facsimile notice is confirmed) or by
personal delivery to an officer of the party to whom notice is given and shall,
in the case of notice to the Company and Amalgamated IUC, be addressed and sent
to:
International Uranium Corporation
1320 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx & Xxxxxxxxx
Suite 2100 - Scotia Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxx
Facsimile No.: (000) 000-0000
and in the case of notice to the Agents, be addressed and sent to:
Salman Partners Inc.
Suite 2230
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxxxx
Facsimile No.: (000) 000-0000
CIBC Wood Gundy Securities Inc.
BCE Place, X.X. Xxx 000
000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
- 00 -
00
Xxxxxxxxx XxXxxxxx & Partners
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxxxxxx
Facsimile No.: (000) 000-0000
Newcrest Capital Inc.
Xxxxx 0000
Xxxxxxxx Xxxxx Xxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
First Marathon Securities Limited
Commerce Place
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxx Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
XxXxxxxx Ttrault
Barristers and Solicitors
X.X. Xxx 00000, Xxxxxxx Xxxxxx
0000 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
and any such notice given in accordance with the foregoing will be deemed to
have been received on the date of facsimile transmission or the date of
delivery, as the case may be. The Company, Amalgamated IUC and the Agents may
change their respective addresses for notice by notice given in the manner
aforesaid.
11.2 The Company represents and warrants to the Agents that no fees or
commissions are or will be payable by the Company to any person (other than the
Agents and other than as described in the Offering Memorandum) in connection
with
- 24 -
25
the issue and sale of the Special Warrants or the transactions contemplated
hereby and the Company agrees to indemnify and hold harmless the Agents against
any claims, demands and losses in respect of any such fees or commissions.
11.3 All terms and conditions of this Agreement shall be construed as
conditions, and any material breach or failure to comply with any such terms or
conditions shall entitle the Agents, without limitation of any other remedies
of the Agents, to terminate the Agents' obligations hereunder and the
Purchasers' obligations to purchase the Special Warrants by giving written
notice to that effect to the Company prior to the Closing Time notwithstanding
any act taken by the Agents including, without limitation, any act of the
Agents related to the offering or continued offering of the Special Warrants
and the Agents shall only be considered to have waived or be estopped from
relying upon any of its rights hereunder if such waiver or estoppel is in
writing and specifically waives or estops such exercise of reliance.
11.4 The representations, warranties, covenants, obligations and agreements
of the Company contained herein or delivered pursuant hereto shall survive the
Closing and the completion of the Amalgamation and the purchase by the
Purchasers of the Special Warrants and, other than the indemnity contemplated
by Section 10 which shall continue indefinitely, shall continue in full force
and effect after the Amalgamation Date and notwithstanding any subsequent
exercise or disposition by the Purchasers of the Special Warrants or the
Underlying Shares for a period of one year after the Closing Date, and the
Agents and the Purchasers shall be entitled to rely on the representations and
warranties of the Company contained herein or delivered pursuant hereto
notwithstanding any investigation which the Agents or the Purchasers may
undertake or which may be undertaken on the their behalf.
11.5 Any reference herein to "this Agreement" and to the words "herein",
"hereof", "hereunder" and other words of similar import refer to this Agreement
as a whole.
11.6 This Agreement shall be governed by and interpreted in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
11.7 Time shall be of the essence hereof.
11.8 This Agreement shall be effective as of and from March 14, 1997
notwithstanding the actual date or dates this letter was signed and delivered
by the Agents and accepted by the Company.
11.9 This Agreement may be executed in any number of counterparts, each of
which when delivered, either in original or facsimile form, shall be deemed to
be an original and all of which together shall constitute one and the same
document.
- 25 -
26
If the foregoing is in accordance with your understanding and agreed
to by you, please signify your acceptance on the accompanying counterparts of
this letter and return the same to us whereupon this letter as so accepted will
constitute an agreement between the Company and the Agents in accordance with
the foregoing.
Yours very truly,
SALMAN PARTNERS INC.
By:
------------------------------
CIBC WOOD GUNDY SECURITIES INC.
By:
------------------------------
XXXXXXXXX XXXXXXXX & PARTNERS
By:
------------------------------
NEWCREST CAPITAL INC.
By:
------------------------------
FIRST MARATHON SECURITIES LIMITED
By:
------------------------------
The foregoing is accepted and agreed to as of March 14, 1997
INTERNATIONAL URANIUM CORPORATION
By:
------------------------------
- 00 -
00
XXXXXXXX X
XXXXXX XXXXXX OFFERS AND SALES
As used in this Schedule A, the following terms shall have the meanings
indicated:
(a) "Accredited Investor" means an institutional accredited investor as
that term is defined in Rule 501(a) (1), (2), (3) or (7) of Regulation
D;
(b) "Directed Selling Efforts" means directed selling efforts as that term
is defined in Regulation S. Without limiting the foregoing, but for
greater clarity in this Schedule, it means, subject to the exclusions
from the definition of directed selling efforts contained in Regulation
S, any activity undertaken for the purpose of, or that could reasonably
be expected to have the effect of, conditioning the market in the
United States for any of the Special Warrants or Underlying Shares, and
includes the placement of any advertisement in a publication with a
general circulation in the United States that refers to the offering of
the Special Warrants or any of the Underlying Shares;
(c) "Foreign Issuer" means a foreign issuer as that term is defined in
Regulation S;
(d) "Regulation D" means Regulation D adopted by the SEC under the U.S.
Securities Act;
(e) "Regulation S" means Regulation S adopted by the SEC under the U.S.
Securities Act;
(f) "SEC" means the United States Securities and Exchange Commission;
(g) "Substantial U.S. Market Interest" means substantial U.S. market
interest as that term is defined in Regulation S;
(h) "United States" means the United States of America, its territories and
possessions, any state of the United States, and the District of
Columbia;
(i) "U.S. Person" means a U.S. person as that term is defined in Regulation
S; and
(j) "U.S. Securities Act" means the United States Securities Act of 1933,
as amended.
All other capitalized terms used but not otherwise defined in this
Schedule A shall have the meanings assigned to them in the Agency Agreement to
which this Schedule A is attached.
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AGENTS
The Agents severally but not jointly acknowledge that the Special
Warrants and Underlying Shares have not been and will not be registered under
the U.S. Securities Act and may not be offered or sold to any person within the
United States except in accordance with Regulation S or pursuant to an exemption
from the registration requirements of the U.S. Securities Act. Accordingly, the
Agents severally but not jointly represent, warrant and covenant to the Company
that:
1. The Agent has offered and sold, and will offer and sell Special
Warrants only in accordance with Rule 903 of Regulation S or as
provided in paragraphs 2 through 6 below. Accordingly, neither the
Agent, its affiliates nor any persons acting on their behalf, has made
or will make (except as permitted in paragraphs 2 through 9 below) (i)
any offer to sell or any solicitation of an offer to buy, any Special
Warrants to any person in the United States, (ii) any sale of Special
Warrants to any purchaser unless, at the time the buy order was or will
have been originated, the purchaser was outside the United States, or
such Agent, affiliate or person acting on behalf of either reasonably
believed that such purchaser was outside the United States, or (iii)
any Directed Selling Efforts in the United States with respect to the
Special Warrants or Underlying Shares.
2. Each Agent, acting through its U.S. broker-dealer affiliate, may offer
the Special Warrants in the United States to Accredited Investors with
which such Agent has a preexisting relationship.
3. Sales to each purchaser of the Special Warrants in the United States
will have an aggregate purchase price of not less than US$250,000.
4. No form of general solicitation or general advertising (as those terms
are used in Regulation D) has been or will be used, including
advertisements, articles, notices or other communications published in
any newspaper, magazine, or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees had been invited
by general solicitation or general advertising, in connection with the
offer or sale of the Special Warrants in the United States.
5. Prior to completion of any sale of Special Warrants in the United
States, each U.S. purchaser thereof (a "U.S. Purchaser") will be
required to represent, warrant and covenant to the Company to the
effect that:
(a) Authorization and Effectiveness. The Purchaser is a valid and
subsisting corporation, has the necessary corporate capacity
and authority to execute and deliver this offer and to observe
and perform its covenants and obligations hereunder and has
taken all necessary corporate action in respect thereof, and,
upon acceptance by the Company, this offer will
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29
constitute a legal, valid and binding contract of the
Purchaser enforceable against the Purchaser in accordance with
its terms and neither the entering into of this Subscription
Agreement nor the completion of the transactions contemplated
hereby will result in a violation or breach of any law
applicable to the Purchaser or of any of the terms or
provisions of any constating documents of the Purchaser or of
any agreement to which the Purchaser is a party or by which it
is bound.
(b) Residence. The Purchaser is a resident of the jurisdiction
referred to under its address set forth on page 1 hereof,
which address is the residence or place of business of the
Purchaser and was not created nor is used solely for the
purpose of acquiring the Special Warrants.
(c) Purchasing as Principal. Except to the extent contemplated in
subparagraph (e), the Purchaser is purchasing the Purchaser's
Special Warrants (and the Underlying Shares in respect
thereof) as principal (as defined in applicable securities
legislation) for its own account, and not for the benefit of
any other person.
(d) Purchasing as Agents or Warrant Agent. In the case of the
purchase by the Purchaser of the Purchaser's Special Warrants
as agent or trustee for any principal whose identity is
disclosed or undisclosed or identified by account number only,
each beneficial purchaser of the Purchaser's Special Warrants
for whom the Purchaser is acting, is purchasing its
Purchaser's Special Warrants (and the Underlying Shares in
respect thereof) as principal for its own account, and not for
the benefit of any other person, for investment only and not
with a view to resale or distribution, and the Purchaser has
due and proper authority to act as agent or trustee for and on
behalf of such beneficial purchaser in connection with the
transactions contemplated hereby.
(e) Purchaser Has Benefit of Private Placement Exemption. The
Purchaser and, in the case of the purchase by the Purchaser of
the Purchaser's Special Warrants as agent or trustee for any
principal whose identity is disclosed or undisclosed or
identified by account number only, each beneficial purchaser
of the Purchaser's Special Warrants for whom the Purchaser is
acting or for which it exercises sole investment discretion is
purchasing a sufficient number of Special Warrants so that the
aggregate acquisition cost of the Purchaser or such beneficial
purchaser will not be less than US$250,000 and is not
purchasing the Special Warrants with a view to any resale,
distribution or other disposition of the Special Warrants in
violation of United States securities laws.
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30
(f) No Advertising. The offering and sale of the Purchaser's
Special Warrants to the Purchaser were not, so far as the
Purchaser is aware, made through an advertisement of the
Special Warrants in printed media of general and regular paid
circulation, radio or television or any other form of
advertisement or as part of a general solicitation and, except
for this Subscription Agreement, the only documents, if any,
delivered or otherwise furnished to the Purchaser in
connection with such offering and sale were the Offering
Memorandum, a term sheet relating to the Special Warrants,
annual or interim reports and other documents the contents of
which are prescribed by statute or regulation and generally
available research reports, memoranda and other materials
concerning the Company, Thornbury and Energy Fuels prepared by
others, which documents the Purchaser acknowledges do not,
individually or collectively, constitute an offering
memorandum or similar document (including an offering
memorandum as such term is defined in section 32(1) of the
Regulation to the Securities Act (Ontario)) and have not been
independently verified by the Agents. The Purchaser
acknowledges and agrees that the Company and the Agents take
no responsibility for the accuracy, adequacy or completeness
of the information contained in any such research reports,
memoranda or other materials concerning the Company, Thornbury
or Energy Fuels prepared by others.
(g) Offering Memorandum. The Purchaser has received and carefully
reviewed the Offering Memorandum and acknowledges that no
securities commission, agency, governmental authority,
regulatory body, stock exchange or other entity has reviewed
the Offering Memorandum or has made any finding or
determination as to the merits of an investment in, or made
any recommendation or endorsement with respect to, the Special
Warrants or the Underlying Shares.
(h) No Undisclosed Information. The Purchaser's Special Warrants
are not being purchased by the Purchaser as a result of any
material information concerning the Company that has not been
publicly disclosed and the Purchaser's decision to tender this
offer and acquire the Purchaser's Special Warrants has not
been made as a result of any oral or written representation as
to fact or otherwise made by or on behalf of the Company, the
Agents or any other person and is based entirely upon
currently available public information concerning the Company.
(i) Investment Intent. The Purchaser, or each beneficial purchaser
for whom it is purchasing, is acquiring Special Warrants to be
held for investment only and not with a view to resale,
distribution or other disposition of the Special Warrants or
the Underlying Shares in violation of the securities laws of
the United States.
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31
(j) Investment Suitability. The Purchaser, and any beneficial
purchaser referred to in subparagraph (e) above, acknowledges
that the Special Warrants and the Underlying Shares are
speculative investments which involve a substantial degree of
risk and the Purchaser and each such beneficial purchaser has
such knowledge and experience in financial and business
affairs as to be capable of evaluating the merits and risks of
the investment hereunder in the Purchaser's Special Warrants
(and the Underlying Shares in respect thereof) and is able to
bear the economic risk of loss of such investment. No oral or
written representation has been made to the Purchaser by or on
behalf of the Company, the Agents or any other person (i) that
any person will resell or repurchase, or (except as provided
herein) refund all or any of the purchase price of, any of the
Purchaser's Special Warrants (or any of the Underlying Shares
in respect thereof), (ii) as to the future value or price of
the Special Warrants or the Underlying Shares or (iii) that
the Special Warrants or the Underlying Shares will be listed
and posted for trading, or that application has been or will
be made to list and post the Special Warrants or the
Underlying Shares for trading, on any stock exchange.
(k) No Registration in U.S. The Purchaser is aware that the
Special Warrants and the Underlying Shares have not been and
will not be registered under the U.S. Securities Act and the
sale contemplated hereby is being made in reliance on an
exemption from registration thereunder only to Accredited
Investors.
(l) Accredited Investor. The Purchaser is an Accredited Investor
and is acquiring the Special Warrants for its own account or
for the account of an Accredited Investor with respect to
which it exercises sole investment discretion, and not with a
view to any resale, distribution or other disposition of the
Special Warrants or Underlying Shares in violation of United
States federal and state securities laws.
(m) Adequate Information. The Purchaser has had access to all
information concerning the Company as it has considered
necessary in connection with its investment decision to
acquire the Special Warrants.
(n) Initial Trade Report. The Purchaser will, with respect to a
sale by the Purchaser of either Special Warrants or Underlying
Shares in British Columbia, file with the British Columbia
Securities Commission a report in the form required under the
British Columbia Securities Commission's Blanket Order #95/17
(the "Initial Trade Report") or the report required under the
laws of the jurisdiction in which the Company carries on
business or in which the Company is organized provided that
the report
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32
requires substantially the same information as required in the
Initial Trade Report (the "Purchaser's Report") within ten
days of the initial trade of such Special Warrants or
Underlying Shares by the Purchaser, provided that where the
Purchaser has filed such report, the Purchaser is not required
to file a further report of additional trades of the Special
Warrants or Underlying Shares acquired on the same date and
under the same exemptions.
(o) Resales. The Purchaser understands that if it decides to
offer, sell or otherwise transfer such Special Warrants or the
Underlying Shares, or any of them, such securities may be
offered, sold or otherwise transferred only (A) to the
Company, (B) outside the United States in accordance with Rule
904 of Regulation S, (C) pursuant to an exemption from
registration under the U.S. Securities Act provided by Rule
144 thereunder, if applicable, and in compliance with any
applicable state securities laws or (D) with the prior written
consent of the Company, pursuant to another exemption from
registration under the U.S. Securities Act and any applicable
state securities laws.
(p) Legend on Certificates. The Purchaser understands that all
certificates representing the Special Warrants sold in the
United States, as well as all certificates issued in exchange
for or in substitution of the foregoing securities, will bear
a legend to the following effect:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "U.S. SECURITIES ACT") AND MAY
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION UNDER THE U.S.
SECURITIES ACT, OR (C) PURSUANT TO AN EXEMPTION FROM
REGISTRATION S UNDER. THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, AND
IN COMPLIANCE WITH ANY STATE SECURITIES LAWS OR (D)
WITH THE PRIOR WRlTTEN CONSENT OF THE COMPANY,
PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER
THE U. S. SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
and that all certificates representing the Underlying Shares,
as well as all certificates issued in exchange for or in
substitution of the foregoing securities, issued upon exercise
of any Special Warrants so legended
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33
shall bear the foregoing legend and shall bear the following
additional legend:
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA. A NEW CERTIFICATE BEARING NO
LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD
DELIVERY": MAY BE OBTAINED FROM THE COMPANY'S
REGISTRAR AND TRANSFER AGENT UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A
FORM SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT
AND THE COMPANY, TO THE EFFECT THAT THE SALE OF THE
SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF THE REGULATION S UNDER
THE U.S. SECURITIES ACT;
provided that, if any such securities are being sold outside
the United States in accordance with Rule 904 of Regulation S,
the legend may be removed by providing a declaration to the
Trustee, as registrar and transfer agent, to the effect set
forth in Exhibit 1 to this Subscription Agreement, or in such
other form as the Company may from time to time prescribe.
(q) Notation. The Purchaser understands and acknowledges that the
Company may instruct the Warrant Agent of the Special Warrants
not to record a transfer without first being notified by the
Company that it is satisfied that such transfer is exempt from
or not subject to registration under the U.S. Securities Act.
6. Any offer, sale or solicitation of an offer to buy Special Warrants
that has been made or will be made in the United States was or will be
made only to Accredited Investors that are exempt or in transactions
that are exempt from registration under applicable state securities
laws.
7. It will not solicit offers for, offer to sell, or sell, the Special
Warrants in any state or other jurisdiction where it is not registered
as a broker-dealer or otherwise exempt from such registration.
8. In the event any Special Warrants are sold to purchasers in the United
States, CIBC Wood Gundy Securities Inc. shall deliver to the Company at
the Closing Time a certificate substantially in the form attached
hereto as Appendix I to Schedule "A".
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34
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company represents, warrants, covenants and agrees that:
1. The Company is a Foreign Issuer with no Substantial U.S. Market
Interest in the Special Warrants or Underlying Shares.
2. Except with respect to offers and sales to Accredited Investors in
reliance upon an exemption from registration under Section 4(2) of the
U.S. Securities Act, neither the Company nor any of its affiliates, nor
any person acting on their behalf, has made or will make: (A) any offer
to sell, or any solicitation of an offer to buy, any Special Warrants
to a person in the United States; or (B) any sale of Special Warrants
or Underlying Shares unless, at the time the buy order was or will have
been originated, the purchaser is (i) outside the United States or (ii)
the Company, its affiliates, and any person acting on their behalf
reasonably believe that the purchaser is outside the United States.
3. During the period in which the Special Warrants are offered for sale,
neither it nor any of its affiliates, nor any person acting on their
behalf has made or will make any Directed Selling Efforts in the United
States, or has taken or will take any action that would cause the
exemption afforded by Section 4(2) of the U.S. Securities Act or
Regulation S to be unavailable for offers and sales of the Special
Warrants, pursuant to this Agreement.
4. None of the Company, its affiliates or any person acting on its or
their behalf have engaged or will engage in any form of general
solicitation or general advertising (as those terms are used in
Regulation D) with respect to offers or sales of the Special Warrants
in the United States, including advertisements, articles, notices or
other communications published in any newspaper, magazine or similar
media, or broadcast over radio, or television, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising.
5. Except with respect to the offer and sale of the Special Warrants or
Underlying Shares offered hereby, the Company has not, for a period of
six months prior to the date hereof sold, offered for sale or solicited
any offer to buy any of its securities in the United States or to any
U.S. Person.
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35
APPENDIX I
TO SCHEDULE A
U.S. PRIVATE PLACEMENT CERTIFICATE
In connection with the private placement in the United States of the special
warrants (the "Special Warrants") of International Uranium Corporation (the
"Company") pursuant to the Agency Agreement dated as of March 14, 1997 among the
Company and the Agents named therein (the "Agency Agreement"), the undersigned,
on behalf of the several Agents and their respective U.S. affiliates, does
hereby certify as follows:
(i) each U.S. affiliate of each U.S. Agent who offered or sold Special
Warrants in the United States is a duly registered broker or dealer
with the United States Securities and Exchange Commission (the "SEC")
and the National Association of Securities Dealers, Inc. ("NASD") and
is in good standing with the SEC and the NASD on the date hereof;
(ii) each purchaser was provided with a copy of the Offering Memorandum
dated March 19, 1997, for the offering of the Special Warrants in the
United States;
(iii) no form of general solicitation or general advertising (as those terms
are used in Regulation D under the 0000 Xxx) was used by us, including
advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees had been invited
by general solicitation or general advertising, in connection with the
offer or sale of the Special Warrants in the United States or to U.S.
persons (as defined under Regulation S under the 1933 Act);
(iv) the offering of the Special Warrants in the United States has been
conducted by us through our U.S. affiliates in accordance with the
Agency Agreement;
(v) immediately prior to transmitting the U.S. Subscription Agreement to
the purchasers, we had reasonable grounds to believe that each offeree
was an Accredited Investor under the U.S. Securities Act, and, on the
date hereof, we continue to believe that each U.S. private placee
purchasing Special Warrants pursuant to Section 4(2) of the U.S.
Securities Act is an Accredited Investor; and
(vi) prior to any sale of Securities in the United States pursuant to
Section 4(2), we caused each U.S. private placee to execute a U.S.
Subscription Agreement.
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36
Terms used in this certificate have the meanings given to them in the Agency
Agreement unless otherwise defined herein.
DATED this day of March, 1997.
CIBC WOOD GUNDY SECURITIES INC.
on behalf of the several Agents
and their respective U.S. affiliates.
By:
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