AMENDED AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT BETWEEN DENISON MINES CORP. AND KHNP CANADA ENERGY LTD. AMENDED AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT
AMENDED
AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT
BETWEEN
XXXXXXX
MINES CORP.
AND
KHNP
CANADA ENERGY LTD.
51043154.2
AMENDED AND RESTATED STRATEGIC RELATIONSHIP AGREEMENT
THIS AGREEMENT is made as of September
19, 2017.
BY
AND AMONG:
XXXXXXX MINES CORP., a corporation
organized under the laws of Ontario (the "Corporation");
and
KHNP Canada Energy Ltd., a British
Columbia company ("KHNP
Canada");
each a
"Party" and together the
"Parties".
RECITALS:
1.
The Corporation,
Korea Electric Power Corporation ("KEPCO") and KEPCO Canada Uranium
Investment Limited Partnership ("AcquisitionCo")
entered into a Strategic Relationship Agreement made as of June 15,
2009 (the "Strategic Relationship
Agreement");
2.
As part of a
reorganization of KEPCO's Canadian investments, AcquisitionCo has
been wound up and its assets have been transferred to KHNP Canada
and KEPCO's interests in the Strategic Relationship Agreement have
been transferred to KHNP Canada; and
3.
The Corporation and
KHNP Canada wish to amend and restate the Strategic Relationship
Agreement to reflect the correct parties following the
reorganization and to make certain other changes.
NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1.
DEFINITIONS
1.1
Definitions
Unless
context otherwise requires, capitalized terms used in this
Agreement will have the meanings specified below:
"Affiliate" means, in respect of a
person, any other person or group of persons acting in concert,
directly or indirectly, that controls, is controlled by or under
common control with the first mentioned person, and for the
purposes of this definition only, "control" means the possession, directly
or indirectly, by such person or group of persons acting in concert
of the power to direct or cause the direction of the management and
policies of the first mentioned person, whether through the
ownership of voting securities or otherwise;
"Applicable Law" means, in relation to
any person, transaction or event, all applicable provisions of
laws, statutes, rules, regulations, official directives, published
guidelines, standards, and codes of practice (regardless of whether
such guidelines, standards or codes of practice have been
promulgated by statute or regulation) and orders of and the terms
of all judgments, orders and decrees issued by any Authorized
Authority by which such person is bound or having application to
the transaction or event in question;
"Authorized Authority" means, in relation
to any person, transaction or event, any (i) federal, provincial,
state, municipal or local governmental body (whether
administrative, legislative, executive or otherwise), both domestic
and foreign, (ii) agency, authority, commission, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government,
(iii) court, arbitrator, commission or body exercising judicial,
quasi-judicial, administrative or similar functions, and (iv) other
body or entity created under the authority of or otherwise subject
to the jurisdiction of any of the foregoing, including any stock or
other securities exchange, in each case having jurisdiction over
such person, transaction or event;
"Board" means the board of directors of
the Corporation;
"Business Day" means a day on which banks
are generally open for the transaction of commercial business in
Toronto, Ontario and Seoul, Korea, but does not in any event
include a Saturday or a Sunday or a bank holiday under Applicable
Law;
"Change in Control Transaction" means any
transaction, event, circumstance, arrangement or similar matter
which, if completed, would mean that a person or persons (other
than KHNP Canada or its Affiliates) would, directly or indirectly,
acquire Control of the Corporation;
"Common Shares" means the shares in the
Corporation;
"Control" of a corporation means the
direct or indirect:
(a)
beneficial
ownership of more than fifty (50) percent of the issued capital
carrying the right to vote at a general meeting; or
(b)
power to directly
or indirectly:
(i)
control the
membership of the board of directors; or
(ii)
cast more than
fifty (50) percent of the maximum number of votes that might be
cast at a general meeting of the corporation,
whether
or not the beneficial ownership or power has statutory, legal or
equitable force or is based on statutory, legal or equitable
rights, and whether or not it arises by means of trusts,
agreements, arrangements, understandings, practices, the ownership
of any interest in shares or stock of that corporation or
otherwise;
"Equity Notice" has the meaning given to
such term in Section 3.3;
"Extraordinary Transaction" means an
amalgamation, merger, arrangement, business combination,
re-organization, restructuring, liquidation, or other extraordinary
transaction with respect to the Corporation or any of its
Affiliates;
"Financing" has the meaning given to such
term in Section 5.1(a);
"Investment Asset" means a mining asset
which is comprised of a mill facility, a producing or part
producing mine, or a mineral resource upon which a production
feasibility study has been carried out by or on behalf of the owner
of such asset;
"Investment Opportunity" has the meaning
given to such term in Section 4.2(a);
"KHNP Transfer Notice" has
the meaning given to such term in Section 3.2(b)(i);
"Korea Parties" means KHNP Canada and its
successors and permitted assigns and "Korea Party" means any one of
them;
"Notice" means any notice, demand or
other communication to be given by any Party under, or in
connection with, this Agreement;
"OBCA" means the Business Corporations Act
(Ontario);
"Offered Interest" has the meaning given
to such term in Section 4.1(a);
"Parties" means the parties to this
Agreement and "Party" means
any one of them;
"Private Placement" has the meaning given
to such term in Section
5.1(a);
"Purchase Notice" has the meaning given
to such term in Section 4.1(b);
"ROFO" has the meaning given to such term
in Section 4.1(b);
"ROFO Notice" has the meaning given to
such term in Section 4.1(a);
"Subject Asset" means the
Corporation’s right, title and interest in and to a mining
asset which is comprised of a mill facility, a producing mining
operation, a mining operation which is on standby or a mineral
resource upon which a production feasibility study has been carried
out by or on behalf of the Corporation or a previous owner of such
asset; and
"Transfer" has the meaning given to such
term in Section 16.2
1.2
Meaning of
references
Save
where specifically required or indicated otherwise:
(a)
words importing one
gender shall be treated as importing any gender, words importing
individuals shall be treated as importing corporations and vice
versa, words importing the singular shall be treated as importing
the plural and vice versa, and words importing the whole shall be
treated as including a reference to any part thereof;
(b)
references to a
person shall include any individual, firm, body corporate,
unincorporated association, government, state or agency of state,
association, joint venture or partnership, in each case whether or
not having a separate legal personality. References to a company
shall be construed so as to include any company, corporation or
other body corporate wherever and however incorporated or
established;
(c)
references to the
word "include" or
"including" (or any similar
term) are not to be construed as implying any limitation and
general words introduced by the word "other" (or any similar term) shall not
be given a restrictive meaning by reason of the fact that they are
preceded by words indicating a particular class of acts, matters or
things;
(d)
any reference to
"writing" or "written" includes any method of
reproducing words or text in a legible and non-transitory form and,
for the avoidance of doubt, shall include e- mail; and
(e)
references to a day
are to a period of twenty four (24) hours running from midnight to
midnight.
1.3
Headings
Section
and paragraph headings are inserted for ease of reference only and
shall not affect construction.
1.4
Negotiation of the
Agreement
The
Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event that an ambiguity or question or
intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favouring or disfavouring any Party by virtue
of the authorship of any provisions of this Agreement.
1.5
Derivatives
Where a
term is defined herein, a capitalized derivative of such term shall
have a corresponding meaning unless the context otherwise
requires.
1.6
Statutory
References
Any
reference to a statute shall include and shall be deemed to be a
reference to such statute and to the regulations made pursuant
thereto, and all amendments made thereto and in force from time to
time, and to any statute or regulation that may be passed which has
the effect of supplementing the statute so referred to or the
regulations made pursuant thereto.
1.7
Calculation of
Equity Interests
References to
shareholding percentages of KHNP Canada in the Corporation in this
Agreement shall, unless specifically indicated otherwise herein, be
calculated based upon the number shares held by KHNP Canada as a
percentage of the total number of issued and outstanding Common
Shares (on a non-diluted basis) of the Corporation at the relevant
time but before giving effect to any subsequent relevant
transaction unless otherwise indicated.
2.
BUSINESS
RELATIONSHIP
2.1
No
Partnership
Nothing
in this Agreement shall be deemed to constitute a partnership,
agency or similar relationship between KHNP Canada, on the one
hand, and the Corporation, on the other, or to authorize any Party
to bind any other Party.
2.2
Compliance with
Other Agreements and Laws; Other Business
Opportunities
(a)
Nothing contained
herein will oblige or require any Party to disclose or exchange any
information or take any action or do any other thing, in breach of
any agreement or arrangement with a third party or in breach of any
provision of any Applicable Law.
(b)
Except as the Parties
may hereafter expressly otherwise agree, each Party shall have the
right to engage in and receive the full benefits from any
independent business activities or operations, whether or not
competitive with the business activities and operations carried on
by any other Party, without consulting with, or incurring
obligation to, any other Party, and each Party will be free to
pursue and derive the benefits of all such future business
opportunities as such Party sees fit without reference to or
restriction by doctrines of "corporate opportunity" or "business
opportunity" or other similar doctrines, all of which the Parties
expressly agree shall not apply to the Parties in their dealings
with each other. For the avoidance of doubt, this Section 2.2(b) shall not relieve any directors designated
for nomination by KHNP Canada from any of their duties to the
Corporation under the OBCA or other Applicable Law.
3.
COVENANTS
(a)
Subject to
Section 3.1(b), at each annual general or special meeting of the
Corporation’s shareholders at which directors of the
Corporation are elected, the Corporation will nominate for election
to the Board one person designated by KHNP Canada, and shall use
its reasonable commercial efforts to obtain shareholder approval
for the election of the KHNP Canada nominee to the
Board.
(i)
at the time the
Corporation provides an Equity Notice to KHNP Canada it is
determined that KHNP Canada’s shareholdings in the
Corporation is less than five percent, and
(ii)
KHNP Canada does
not provide to the Corporation, within 60 days after receipt of
such Equity Notice, evidence reasonably satisfactory to the
Corporation that KHNP Canada has acquired additional Common Shares
to increase its shareholding interest in the Corporation to five
percent or more.
In the
event that KHNP Canada’s right to designate a director is
eliminated under this Section 3.1(b)
or otherwise, KHNP Canada will, on the request by the Corporation,
cause its director nominee to resign as a director of the
Corporation.
(c)
For the avoidance
of doubt, if KHNP Canada’s right to designate one director
for nomination is terminated pursuant to Section 3.1(b) or otherwise, such right will not be
re-established if KHNP Canada’s shareholdings in the
Corporation thereafter exceed the applicable shareholding
threshold.
(d)
The Corporation
shall provide reasonable notice to KHNP Canada of any upcoming
shareholders’ meetings and shall request that KHNP Canada
designate the person to be elected as a director at such meeting.
If KHNP Canada fails to provide notice to the Corporation of the
person to be nominated for election within ten Business Days
following the request for such designation by the Corporation, then
the incumbent director designated by KHNP Canada (if any) shall be
deemed to be the person designated by KHNP Canada for the purposes
of the applicable shareholders’ meeting. If there is no
incumbent director that was designated by KHNP Canada for
nomination and KHNP Canada fails to provide notice to the
Corporation of the person to be nominated for election within ten
Business Days following the request for such designation by the
Corporation, then KHNP Canada’s right to designate a director
for nomination shall be deemed to be waived until the next
following shareholders’ meeting.
(e)
Any person
designated or nominated under Sections 3.1(a), 3.1(g) or
3.1(h) must have the qualifications to
serve as a director of a Canadian reporting issuer and registrant
under the U.S. Securities Exchange Act of 1934 that is listed on
the stock exchanges on which the Corporation’s securities are
listed from time to time, and otherwise be acceptable to the Board,
acting reasonably. Such person shall not be required to be a
resident Canadian within the meaning of the OBCA.
(f)
The Corporation
shall use its reasonable commercial efforts to ensure that the
directors on the Board, other than the nominee of KHNP Canada,
exceed the required number of Canadian resident directors required
for effective quorum at Board meetings pursuant to relevant
provisions contained in the Corporation’s articles and
By-laws and under the OBCA.
(g)
KHNP Canada may
from time to time designate a successor for any person appointed or
elected as a director on the Board in accordance with this Section
3.1 from time to time, in the event such
appointee or elected director ceases to be a director between
shareholders’ meetings for any reason. In such event, the
Corporation will cause the appointment of such successor director
to fill the vacancy in the Board caused by such appointee or
elected director ceasing to be a director of the
Corporation.
(h)
If more than 11
directors are to be elected to the Corporation’s Board at any
shareholder meeting, or if the Board is increased in size between
shareholder meetings to consist of more than 11 directors, then
KHNP Canada’s rights under Section 3.1(a) to nominate one director to the Board
shall be increased from one director to such number of directors
that reflects KHNP Canada’s pro rata shareholding to the
number of Board seats (rounded down to the next lower number of
directors). If the size of the Corporation’s Board is
subsequently reduced to 11 directors or less, then the provisions
of Section 3.1(b) will apply. For the
avoidance of doubt, nothing contained in this Section 3.1 shall require the Corporation’s Board
to consist of more than the maximum number of directors permitted
under the Corporation’s articles, by-laws or under Applicable
Law.
3.2
Reporting
(a)
The Corporation
shall:
(i)
provide to KHNP
Canada, at such time and in such form as they are publicly filed
with securities regulatory authorities and/or delivered to the
Corporation’s shareholders, financial statements and
management’s discussion and analysis for each of its annual
and quarterly financial periods for which such statements are
required to be filed;
(iii)
at least once in
each of the Corporation’s fiscal quarters, cause its senior
management to be available to discuss the monthly operating reports
provided pursuant to Section 3.2(a)(ii)
with KHNP Canada as reasonably requested by KHNP Canada;
and
(iv)
upon request by KHNP
Canada, acting reasonably, co-operate with that KHNP Canada to
provide such information as is necessary for the purposes of
consolidating the Corporation’s financial information into
the financial statements of KHNP Canada as may be required pursuant
to Applicable Law. KHNP Canada will reimburse the Corporation for
any costs incurred by the Corporation in complying with this
Section 3.2(a)(iv).
(b)
KHNP Canada
shall:
(i)
concurrently with its
filing obligations under applicable Securities Law or otherwise
within ten days following the acquisition or sale of any securities
of the Corporation by KHNP Canada shall provide notice of such
purchase or sale to the Corporation, and shall include in such
notice the number of securities purchased or sold (a "KHNP Transfer Notice"); and
(ii)
at all times comply
with the xxxxxxx xxxxxxx and other public reporting obligations of
Applicable Law in connection with any acquisition or sale of
securities of the Corporation.
In the
event that the Corporation becomes aware that KHNP Canada’s
shareholding percentage in the Corporation has been reduced below
five percent at any time, then the Corporation shall provide to
KHNP Canada a written notice (an "Equity Notice") specifying the
Corporation’s calculation of KHNP Canada’s shareholding
percentage in the Corporation and identifying the provisions of the
Agreement that may be affected by such level of shareholding. In
preparing and providing the Equity Notice, the Corporation may
rely:
(a)
with respect to
number of outstanding Common Shares of the Corporation, upon
information provided by the Corporation’s registrar and
transfer agent, and
(b)
with respect to the
Common Shares held by KHNP Canada from time to time, on (i) the
most recent KHNP Canada Transfer Notice provided to the Corporation
by KHNP Canada, (ii) the most recent xxxxxxx xxxxxxx reports of
KHNP Canada filed with securities regulatory authorities, if or
(iii) such other information which indicates to the Corporation,
acting reasonably, the shareholding of KHNP Canada in the
Corporation from time to time.
3.4
Co-ordinating
Committee
The
Parties will establish, as soon as practicable following the date
of this Agreement, a
coordinating committee comprised of representatives from the senior
management of each of KHNP Canada and the Corporation, to meet at
least semi-annually and to serve as a forum for the regular
exchange of views and information between the Parties on matters of
mutual interest. The Corporation shall appoint not less than two
representatives to serve on such committee, one of whom shall be
the Chief Executive Officer of the Corporation (or such other
person who serves in the capacity of a chief executive officer of
the Corporation).
At the
request of KHNP Canada from time to time, the Corporation shall
provide for up to two persons at a time designated by KHNP Canada
with the opportunity to visit an office maintained by the
Corporation and/or a producing mining property operated by the
Corporation for a period of two weeks per occurrence. Such site
visits shall be held on such date or dates within 90 days following
the receipt of the request for such visit by the Corporation as are
determined by the Corporation, acting reasonably, and shall not be
conducted at such time or in such a manner that would result in a
disruption of or interference with the operations of the property
being visited. The Corporation shall not be required to provide
site visits contemplated by this Section 3.5 more than two times per calendar
year.
3.6
Consultation
Regarding Secondment Opportunities
KHNP
Canada and the Corporation shall from time to time discuss
potential opportunities for KHNP Canada to second to the
Corporation, at KHNP Canada’s own cost and expense, one (1)
employee who, in the opinion of KHNP Canada and the Corporation,
has the qualifications to contribute to the business and operations
of the Corporation. Any such secondment opportunity would be
subject to compliance with Applicable Law and would be subject to
both parties agreeing to the terms and conditions thereof under a
separate agreement between the Corporation and KHNP
Canada.
4.
INVESTMENT
OPPORTUNITIES
(a)
Subject to Applicable Law
and any contractual obligations in existence prior to the execution
of this Agreement, in the event that the Corporation wishes to sell
all or a portion of a Subject Asset (such Subject Asset or portion
thereof, an "Offered
Interest"), then the Corporation shall first offer to sell
the Offered Interest to KHNP Canada at a price and on such other
terms and conditions as are determined by the Corporation in its
sole discretion. The Corporation shall provide notice (a
"ROFO Notice") to KHNP
Canada of the proposed substantive terms of such sale together with
information regarding the Subject Asset and the Offered Interest as
determined by the Corporation in its sole discretion which is
reasonably sufficient to allow KHNP Canada to evaluate the Offered
Interest and the proposed transaction.
(b)
KHNP Canada shall,
for a period of thirty days following receipt of a ROFO Notice,
have the right (the "ROFO")
to elect to purchase all (and not less than all) of the Offered
Interest specified in the ROFO Notice upon the terms and conditions
specified in the ROFO Notice. KHNP Canada may exercise the ROFO by
providing a written notice to the Corporation (a "Purchase Notice") stating that it agrees
to purchase (or cause another Korea Party to purchase) the
applicable Offered Interest on the terms specified in the ROFO
Notice and identifying the Korea Party or Korea Parties that are to
be the purchasers of such Offered Interest. The Parties shall
thereafter negotiate in good faith to settle the terms of any
definitive agreements relating to the sale of the Offered Interest.
If the parties are not able to agree to definitive terms within
thirty days following the receipt by the Corporation of the
Purchase Notice, then KHNP Canada shall be deemed to have waived
the ROFO and the Corporation shall be entitled to sell the Offered
Interest in accordance with Section 4.1(c).
(c)
If KHNP Canada does
not provide a Purchase Notice to the Corporation within thirty days
after receiving the Corporation’s ROFO Notice, then KHNP
Canada shall be deemed to have waived the ROFO and the Corporation
shall be entitled to sell the applicable Offered Interest to any
other party or parties, provided that: (i) the sale price to be
paid by a third party or third parties shall not be on terms which
are materially different from those offered to KHNP Canada under
the ROFO Notice, and (ii) if the Corporation is not able to enter
into a definitive agreement with a third party or third parties
with respect to such sale within 120 days following the expiry or
waiver of the ROFO or if the sale of the Subject Asset does not
close within 180 days following the expiry or waiver of the ROFO or
such later date as may be necessary to obtain all required
regulatory approvals for the proposed transaction, then KHNP
Canada’s rights under Sections 4.1(a) and (b) shall
be restored and the Corporation will be required to provide a new
ROFO Notice in respect of such proposed sale and provide KHNP
Canada with the ROFO before proceeding with a sale to a third
party.
(d)
If KHNP Canada
exercises its rights under the ROFO and becomes the owner of the
Offered Interest, then KHNP Canada shall provide the Corporation
with notice of any subsequent proposed sale of all or a portion of
KHNP Canada’s interest in the Offered Interest and provide
the Corporation with a right of first offer in respect of such
Subject Asset substantially consistent with the ROFO.
4.2
Opportunity to
Participate in Investment Transactions
(a)
If the Corporation
proposes to pursue the acquisition of an Investment Asset with one
or more co-investors in which the Corporation would acquire an
interest (an "Investment
Opportunity"), then the Corporation shall provide notice to
KHNP Canada of the principal terms of the proposed relationship
among investors, including information regarding the Investment
Asset and the proposed terms of the acquisition thereof. The
Corporation will provide the KHNP Canada with a reasonable
opportunity to express its interest in participating as a
co-investor in the Investment Opportunity. KHNP Canada shall
provide notice to the Corporation of the binding commitment to
participate in the Investment Opportunity within 30 days after
receiving notice from the Corporation, or such shorter time as may
be reasonably necessary in the circumstances, having regard to the
nature of the proposed co-investment relationship and to the nature
of the process for bidding for and acquiring the Investment Assets.
If KHNP Canada determines that it shall participate as a
co-investor in the Investment Opportunity, it will be entitled to
participate in such Investment Opportunity on terms no less
favourable as the terms provided to any other of the
Corporation’s co-investors. Notwithstanding the foregoing, if
the Corporation determines in its sole discretion, acting
reasonably, that:
(i)
the involvement of
KHNP Canada would adversely affect the Corporation’s ability
to successfully bid for the applicable Investment Asset or to
complete the Investment Opportunity, or
(ii)
KHNP Canada and the
Corporation are unable to agree on the terms under which KHNP
Canada would invest in the Investment Opportunity within a
reasonable period of time, having regard to the nature of the
proposed co-investment relationship and the nature of the process
for bidding for and acquiring the Investment
Opportunity,
then
the Corporation may proceed with the Investment Opportunity without
the involvement of KHNP Canada.
5.
PURCHASES
OF THE CORPORATION’S SHARES
(a)
In the event that
the Corporation carries out a public financing of Common Shares or
securities convertible into Common Shares (the “Financing
Securities”) to raise proceeds of not less than
CDN$10,000,000 (a "Financing"), then the Corporation shall provide
KHNP Canada with the opportunity, subject to Applicable Law, the
approval of any applicable stock exchange or other Authorized
Authority and the limitation set forth in Section 5.1(d), to
subscribe, on a private placement basis (a "Private Placement"),
for up to the number of Common Shares or Financing Securities which
would result in KHNP Canada owning the same percentage of the
Corporation’s Common Shares following the Private Placement
as it did prior to giving effect to the Financing (assuming the
exercise or conversion of all convertible securities acquired by
KHNP Canada in the Private Placement). Notwithstanding the above,
if the Corporation arranges for KHNP Canada to participate directly
in the Financing for all or a portion of the Common Shares or
Financing Securities, as the case may be, which KHNP Canada is able
to acquire under this Section 5.1(a),
after consultation with the dealers or managers in respect of the
Financing and having regard to the context of and process for the
Financing and Applicable Law, and KHNP Canada is willing and able
to so participate and does participate in the Financing, then the
obligation of the Corporation to issue Common Shares or Financing
Securities, as the case may be, to KHNP Canada in a Private
Placement under this Section 5.1 will be
reduced or eliminated to the extent that KHNP Canada acquires
Common Shares or Financing Securities, as the case may be, in the
Financing in lieu of purchasing such Common Shares or Financing
Securities under a related Private Placement.
(b)
The Corporation
will use its reasonable commercial efforts to obtain approval of
all applicable Authorized Authorities and stock exchanges for each
Private Placement on the basis that the subscription price for the
Private Placement will be the same as the offering price as for the
Financing. In the event that the Corporation is not able, due to
any Applicable Law or the rules of any applicable stock exchange,
to issue Common Shares or Financing Securities, as the case may be,
in the Private Placement at a subscription price equal to the
offering price in the Financing, then KHNP Canada will be entitled
to subscribe for Common Shares or Financing Securities, as the case
may be, at a subscription price representing the maximum discount
to market price (if any) for the Common Shares or Financing
Securities, as the case may be, permitted under Applicable Law and
the rules of all applicable stock exchanges, provided that the
issue price for the securities to be issued in the Private
Placement shall not be less than the issue price for the applicable
securities issued in the Financing. Nothing in this Section 5 shall
obligate the Corporation to seek the approval of its shareholders
to a Private Placement, provided that, if the Corporation is
required under its constating documents or Applicable Law to seek
shareholder approval for a Financing and if shareholder approval is
also required in respect of the Private Placement, at the request
of KHNP Canada, the Corporation shall also seek shareholder
approval of the Private Placement at the shareholders' meeting held
to approve the Financing.
(c)
The Corporation
will provide to KHNP Canada notice of a Financing no later than the
time of the announcement to the public of such Financing. Such
notice shall provide the proposed offering price and expected
number of securities to be offered, as well as the manner of
offering the securities, to the extent such information is known at
the time. If any definitive terms of the Financing are determined
or amended after the date of the first public announcement of the
Financing, the Corporation shall give to KHNP Canada notice of such
definitive terms as soon as practicable, and in no event later than
when such definitive terms are disclosed to the public. The first
notice in which the definitive price and expected size of the
Financing are specified is referred to herein as the "Initial Notice". The Corporation will
use its best efforts, having regard to the nature and type of
transaction constituting the Financing, to deliver the Initial
Notice to KHNP Canada at least 30 days prior to the anticipated
date of closing of any Financing. KHNP Canada shall give binding
notice of the number of Common Shares or Financing Securities, as
the case may be, it intends to purchase under the Private Placement
at any time within the period commencing on the date of the Initial
Notice and ending on the first to occur of 40 days following
receipt of the Initial Notice and five Business Days following the
closing of the Financing. The Private Placement shall be completed,
or a mutually binding agreement in respect of such transaction
shall have been entered into between the Corporation and KHNP
Canada with closing to occur upon satisfaction of any required
approvals of Authorized Authorities applicable to KHNP Canada,
within 45 days of the date of the Initial Notice of a Financing or
within five Business Days following completion of the Financing,
whichever is later, failing which KHNP Canada shall no longer have
the right to enter into the Private Placement corresponding to such
Financing.
(d)
In the event that
KHNP Canada does not participate in a Private Placement in relation
to a Financing and its ownership percentage in the Common Shares of
the Corporation is less than 5 percent following the closing of
such Financing, then KHNP Canada’s right to acquire Common
Shares under Section 5.1(a) shall
cease.
6.
ASSIGNMENT
AND SUCCESSORS
(a)
KHNP Canada may
assign the whole or a part of its rights under this Agreement to an
Affiliate on written notice to, but without the consent of, the
Corporation, provided that any Affiliate assignee is required to
transfer its interest back to KHNP Canada or an Affiliate thereof
before it ceases to be an Affiliate.
(b)
This Agreement may
not be assigned by KHNP Canada to any third party, nor may KHNP
Canada create any interest, including a trust, in this Agreement or
in rights hereunder in favour of any third party, without the prior
written consent of the Corporation.
(c)
Any assignment,
whether to a Korea Party, an Affiliate or a third party, or the
creation of such interest or trust as described in subsection (b),
shall be subject to the assignee or beneficiary thereof having
first executed a deed of assignment with the Corporation, agreeing
to be bound by the terms and conditions of this Agreement and to
assume the related obligations of the assignee
hereunder.
(d)
KHNP Canada will
cease to be a Party to this Agreement upon assignment of its entire
interest under this Agreement and assumption of its obligations
under this Agreement by the transferee.
6.2
Assignment by the
Corporation
The
Corporation may not assign this Agreement without the prior written
consent of KHNP Canada.
6.3
Successors
This
Agreement will be binding on and enure to the benefit of each on
the Parties and their respective successors.
7.
TERMINATION
(a)
The Corporation may
terminate this Agreement by written notice given to KHNP Canada,
if:
(i)
the equity interest
of KHNP Canada in the Corporation is reduced to less than five per
cent, based on an Equity Notice delivered to KHNP Canada by the
Corporation, and KHNP Canada does not provide to the Corporation,
within 60 days after receipt of such Equity Notice, evidence
reasonably satisfactory to the Corporation that it has acquired
additional Common Shares to increase its shareholding interest in
the Corporation to five percent or more, or
(ii)
the Corporation
completes an Extraordinary Transaction resulting in the prior
shareholders of the Corporation holding less than 50% of the voting
securities of the Corporation.
(b)
This Agreement may
be terminated by KHNP Canada on written notice given to the
Corporation, at any time if the equity interest of KHNP Canada in
the Corporation falls below five percent.
(c)
The Corporation, on
the one hand, or KHNP Canada, on the other hand, may terminate this
Agreement if the other has committed a material breach of this
Agreement and failed to remedy such default for a period of thirty
(30) days or more.
(d)
Upon the
termination of this Agreement, KHNP Canada shall immediately cause
the person designated by it to serve on the Board to resign as a
director of the Corporation.
7.2
Prior
Obligations
For the
avoidance of any doubt, termination of this Agreement shall not
affect the rights and obligations of the Parties under any other
agreements between any of the Parties, and the same shall remain
valid and enforceable in accordance with their respective
terms.
7.3
Survival of
Termination
Notwithstanding
Section 7.1, the provisions of Sections
14, 15 and
16.1 and the provisions of Sections
16.3 and 17 applicable thereto shall survive the
termination of this Agreement for the periods specified
therein.
8.
ENTIRE
AGREEMENT
This
Agreement constitutes the whole agreement and understanding between
the Parties with respect to the subject matter hereof and
supersedes any previous agreements, arrangements or understandings
between them, whether oral or in writing, relating
thereto.
Notices
authorized or required by this Agreement shall be given by hand,
facsimile or electronic mail transmission with receipt
electronically confirmed:
If to
the Corporation, addressed to:
Xxxxxxx
Mines Corp.
1100
– 00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx,
X0X 0X0
Attention: Xxxxx X.
Xxxxx, President and Chief Executive Officer
Facsimile number:
x0-000-000-0000
E-mail
address: xxxxxx@xxxxxxxxxxxx.xxx
With a
copy (which shall not constitute notice) to:
Blake,
Xxxxxxx & Xxxxxxx LLP
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
Attention: Xxxxx X.
X’Xxxxxxxxx
Facsimile number:
x0-000-000-0000
If to
KHNP Canada:
KHNP
Canada Energy Ltd.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX X0X
0X0 Xxxxxx
Attn:
Director
Facsimile number:
x0-000-000-0000
With a
copy to:
Korea
Hydro & Nuclear PowerCo., Ltd.
0000
Xxxxxx-xx, Xxxxxxx-xxxxx
Xxxxxxxx-xx,
Xxxxxxxxxxxxx-xx,
Xxxxx,
00000
Attn:
General Manager
Facsimile number:
x00-00-000-0000
Each
notice sent in accordance with this Section shall be deemed to have
been received (a) if delivered in person, on the day of delivery,
or (b) if sent by fax or by electronic mail transmission with
receipt electronically confirmed, on the same day it was sent or on
the first Business Day thereafter if it was not sent on a Business
Day during business hours of the recipient. Notice of change of
address shall also be governed by this Section.
10.
VARIATION,
WAIVER AND CONSENT
10.1
Variation in
writing
No
variation or waiver of any provision or condition of this Agreement
shall be effective unless it is in writing and signed by or on
behalf of each of the Parties (or, in the case of a waiver, by or
on behalf of the Party waiving compliance).
10.2
Variation
limited
Unless
expressly agreed, no variation or waiver of any provision or
condition of this Agreement shall constitute a general variation or
waiver of any provision or condition of this Agreement, nor shall
it affect any rights, obligations or liabilities under or pursuant
to this Agreement which have already accrued up to the date of
variation or waiver, and the rights and obligations of the Parties
under or pursuant to this Agreement shall remain in full force and
effect, except and only to the extent that they are so varied or
waived.
10.3
Consent needs to be
in writing
Any
consent granted under this Agreement shall be effective only if
given in writing and signed by the consenting Party and then only
in the instance and for the purpose for which it was
given.
11.
SEVERABILITY
Except
as may otherwise be stated herein, if any part of this Agreement is
held by a competent authority to be unlawful, null and void, and/or
unenforceable, that part shall be deemed to be deleted from this
Agreement and the remaining parts of this Agreement shall continue
in full force and effect. The Parties shall in such event seek to
agree upon a valid and enforceable replacement for the part of this
Agreement found to be unlawful, null and void and/or
unenforceable.
12.
COUNTERPARTS
This
Agreement may be executed and delivered in any number of
counterparts by the Parties, including by facsimile or by e-mail in
PDF format, and in separate counterparts and each such counterpart
shall constitute an original of this Agreement and all of which
shall together constitute one and the same instrument. This
Agreement shall not be effective until each Party has executed at
least one counterpart.
13.
REPRESENTATIONS
Each
Party represents and warrants to each other Party that it has the
authority to enter into this Agreement and the execution and
delivery of, and the performance of, and compliance with, the terms
of this Agreement does not and will not result in any breach of, or
constitute a default under, and do not and will not create a state
of facts which, after notice or lapse of time or both, would result
in a breach of or constitute a default under any term or provision
of the articles, or resolutions of that Party, any applicable laws,
mortgage, note, contract, agreement (written or oral), instrument,
lease or other document to which that Party is bound, or any
judgment, decree, order, statute, rule or regulation applicable to
that Party.
Any
information provided by one Party to the other pursuant to this
Agreement shall be treated by each Party as strictly confidential
and may not be disclosed by any Party while this Agreement is in
effect and for a period of 24 months after the termination of this
Agreement except:
(a)
to the extent
required to comply with any applicable law, regulation, rule,
requirement or order of a competent authority, including in the
case of the Corporation any securities regulatory authority or
stock exchange on which any securities of the Corporation may be
listed, in which case the disclosing Party shall notify the other
Parties in advance of any such disclosure and shall use reasonable
efforts to limit such disclosure;
(b)
to such
Party’s or its Affiliates agents, employees or professional
advisors, to the extent necessary to enable such Party to comply
with its obligations under this Agreement and provided such persons
agree to maintain the confidentiality of the Confidential
Information;
(c)
to a court of
competent jurisdiction, an arbitrator or an expert, to the extent
required for, and solely for the purpose of, determination of a
dispute or matter under or pursuant to the terms of this Agreement;
or
(d)
with the written
consent of each other Party.
15.
NON-SOLICITATION
For so
long as this Agreement is in effect and for a period of twelve
months after the termination of this Agreement, KHNP Canada shall
not directly or indirectly, including through any Affiliate
thereof, solicit for employment any executive officer or other
employee of the Corporation or any of the Corporation’s
Affiliates, provided, however, that the foregoing shall not apply
to the solicitation of employment of any person where: (a) contact
with KHNP Canada is initiated by such person, or (b) such person is
responding to a general solicitation of employment published by
KHNP Canada in a newspaper, magazine, trade publication or other
publication or by electronic means, such as posting on the
Internet, and which is available to the general
public.
16.
TRADING
IN THE CORPORATION’S SHARES
For so
long as this Agreement is in effect and for a period of twelve
months after the termination of this Agreement in accordance with
its terms, KHNP Canada shall not, and shall cause its Affiliates
not to:
(a)
acquire or agree to
acquire or make any proposal to acquire by means of purchase,
merger, amalgamation, arrangement, consolidation, take-over bid,
business combination or in any other manner, any securities or
assets of the Corporation or its Affiliates, other than the
acquisition of assets from the Corporation or its Subsidiaries
pursuant to this Agreement or in the ordinary course of business of
the Corporation or such Subsidiaries;
(b)
solicit proxies of
shareholders of the Corporation, or seek to advise or influence any
other person with respect to the voting of any securities of the
Corporation, or form, join or in any way participate in a proxy
group, in each case for any purpose;
(c)
have any
discussions or enter into any arrangements, understandings or
agreements, whether written or oral, with, or advise, finance, aid,
assist, encourage or act in concert with, any other persons in
connection with any of the foregoing; or
(d)
make any public
announcement with respect to the foregoing,
in each
case without the prior written consent of the Board or as otherwise
specifically authorized pursuant to this Agreement.
For so
long as this Agreement is in effect, KHNP Canada shall not sell,
transfer, pledge or otherwise dispose of (a "Transfer") any of its Common Shares, or
enter into an agreement with respect thereto:
(a)
at any time if such
sale is contrary to Applicable Law or the rules of any stock
exchange on which the Corporation’s securities are listed
from time to time, or is reasonably likely to have an immediate
significantly adverse effect on the market price of the Common
Shares; or
(b)
through a privately
arranged transaction, a block trade or an open market trade where
the identity of the purchaser is known to it or any other similar
transaction where the identity of the purchaser is known to it, if
the purchaser is a person engaged in the business of uranium or
vanadium exploration or production, unless the Corporation has
provided its prior written consent to such transfer, such consent
not to be unreasonably withheld or delayed.
(a)
KHNP Canada may at
any time (subject to any restrictions under Applicable Law) make or
cause to be made market purchases of Common Shares for the purpose
of maintaining its equity ownership interest in the
Corporation;
(b)
KHNP Canada may
exercise the ROFO as set forth in Section
4.1 hereof;
(c)
KHNP Canada may
exercise its rights to participate in future Financings set forth
Section 5.1 hereof;
(d)
KHNP Canada may
exercise its assignment rights set forth in Section 6.1 hereof;
(e)
the Korea Parties
may receive the Corporation’s Common Shares from KHNP Canada
by dividend or distribution in kind; or
(i)
an intervening
court order or other compulsion to Transfer the securities of the
Corporation held by KHNP Canada is made by an Authorized
Authority;
(ii)
an opportunity to
tender to or participate in, directly or indirectly, individually
or as part of a group, as seller or acquiror, as the case may be,
in a take-over bid or a plan of arrangement or other similar
acquisition/disposition transaction which has been approved by the
Board;
(iii)
an offer by the
Corporation to purchase its Common Shares which is made on
identical terms to all of the holders of the Corporation’s
Common Shares;
(iv)
a compromise
agreement or other arrangement between the Corporation and its
creditors or any class of them or between the Corporation and its
shareholders or any class of them which is agreed to by the
Corporation and the creditors or shareholders, as applicable, of
the Corporation;
(v)
a corporate merger,
amalgamation or arrangement involving KHNP Canada by which as a
matter of legal process and without further action by or on behalf
of KHNP Canada the person resulting therefrom owns, directly or
indirectly, all or substantially all of the assets of KHNP Canada
and assumes, directly or indirectly, all of the liabilities of KHNP
Canada including, without limitation, KHNP Canada obligations in
this Agreement;
(vi)
the creation of an
encumbrance by KHNP Canada in favour of a third party in respect of
all or substantially all of KHNP Canada’s
assets;
(vii)
a material breach
of this Agreement by the Corporation;
(viii)
requisitions at a
meeting of the shareholders of the Corporation to consider a Change
in Control Transaction; or
(ix)
a public
announcement by the Corporation or its Board in respect of, or
notice of a meeting of the Corporation’s shareholders to
consider, a Change in Control Transaction; or
(x)
if KHNP Canada
obtains the prior written consent of the Corporation to a Transfer
of the Common Shares in the Corporation.
16.4
Compliance with
Disclosure Policy
KHNP
Canada hereby confirms and acknowledges receipt of the
Corporation’s Disclosure Policy and agrees that (a) it will
cause the individual designated by KHNP Canada to serve on the
Board to comply with such policy and (b) so long as it is an
"insider" of the Corporation or is considered to be "a person or
company in a special relationship" with the Corporation (as such
terms are defined in the Securities Act (Ontario)), it will
comply with such policy. KHNP Canada agrees, to indemnify and save
harmless the Corporation from and against any and all damages,
liabilities, costs, charges or expenses suffered or incurred by the
Corporation as a direct result or by reason of KHNP Canada or its
director nominee having acted contrary to Applicable Laws or the
Corporation’s Disclosure Policy, provided that such damages,
liabilities, costs, charges or expenses were not suffered or
incurred as a direct result of the fraud, dishonesty or wilful
default of the Corporation or any other directors of the
Corporation.
17.1
Governing
Law
This
Agreement shall be governed and interpreted in accordance with the
laws of the Province of Ontario and the federal laws of Canada
applicable therein.
17.2
Non-exclusive
Jurisdiction
The
Parties irrevocably agree that the courts of Ontario shall have
non-exclusive jurisdiction over any claim or matter arising under
or in connection with this Agreement and that accordingly any
proceedings in respect of any such claim or matter may be brought
in such court. Each of the Parties will submit to the jurisdiction
of the Ontario courts. Each Party irrevocably agrees that service
of process upon it by registered mail to the address set forth in
Article 9 shall constitute valid
service for the purposes of any legal proceedings between the
Parties.
18.
GENERAL
18.1
Time
Time
shall be of the essence in this Agreement.
[SIGNATURE
PAGE FOLLOWS]
EXECUTED as an agreement as of the date
first written above.
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XXXXXXX
MINES CORP.
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By: “Xxxxx
Xxxxx”
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Name:
|
Xxxxx
X. Xxxxx
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Title:
|
President and Chief
Executive Officer
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KHNP
CANADA ENERGY LTD.
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|
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By: “Xxxxx-Xxx
Xxxxx”
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|
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Name:
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Xxxxx-Xxx
Xxxxx
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Title:
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Director
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